Kluge v. Dhs

Case: 21-1787 Document: 50 Page: 1 Filed: 02/22/2023
United States Court of Appeals
for the Federal Circuit
______________________
JOHN C. KLUGE,
Petitioner
v.
DEPARTMENT OF HOMELAND SECURITY,
Respondent
______________________
2021-1787
______________________
Petition for review of the Merit Systems Protection
Board in No. DC-4324-20-0246-I-1.
______________________
Decided: February 22, 2023
______________________
JAMES RENNE, Arlington, VA, argued for petitioner.
GEOFFREY MARTIN LONG, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for respondent. Also repre-
sented by BRIAN M. BOYNTON, CLAUDIA BURKE, MARTIN F.
HOCKEY, JR.
______________________
Before DYK, TARANTO, and CUNNINGHAM, Circuit Judges.
CUNNINGHAM, Circuit Judge.
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2 KLUGE v. DHS
John Kluge appeals from decisions of the Merit Sys-
tems Protection Board denying class certification, dismiss-
ing the Office of Personnel Management as a respondent,
and finding that his former employer, the Department of
Homeland Security, owed him differential pay in the
amount of $274.37 plus interest under 5 U.S.C. § 5538. We
affirm.
I. BACKGROUND
Mr. Kluge, a commissioned officer in the United States
Army Reserve and a civilian employee of the Department
of Homeland Security (“DHS”), was ordered to report to ac-
tive duty in January 2011 in support of a contingency op-
eration, Operation Enduring Freedom. J.A. 223; Pet’r’s Br.
8–10. He was ordered to active duty under 10 U.S.C.
§ 12301(d), which provides for voluntary active duty of re-
servists. J.A. 223. Because of his service, he was absent
from his DHS job from January 15 to July 30, 2011. J.A.
225; Pet’r’s Br. 9.
For the first few weeks of this period, Mr. Kluge was on
paid military leave from his job at DHS. Pet’r’s Br. 10.
From February 27 until July 30, 2011, Mr. Kluge was on
unpaid leave. Id.; J.A. 465. DHS did not pay him for any
of those days except for the July 4 holiday. Pet’r’s Br. 10
n.8; J.A. 465.
In 2019, Mr. Kluge filed an appeal before the Board,
seeking to recover differential pay under 5 U.S.C. § 5538for himself and similarly situated service members em-
ployed by the federal government. J.A. 43–60. He named
the Office of Personnel Management (“OPM”) as the re-
spondent in that appeal. J.A. 43.
The administrative judge assigned to Mr. Kluge’s ap-
peal denied class certification and substituted DHS for
OPM as the respondent. J.A. 6. DHS and Mr. Kluge then
stipulated that he was eligible for differential pay. J.A.
464. The administrative judge determined that DHS owed
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KLUGE v. DHS 3
Mr. Kluge $274.37 plus interest. J.A. 15–20. The admin-
istrative judge’s decision became the Board’s final decision
under 5 C.F.R. § 1201.113.
Mr. Kluge appeals from that final decision. We have
jurisdiction to consider his appeal under 28 U.S.C.
§ 1295(a)(9).
II. DISCUSSION
Mr. Kluge raises three issues on appeal. First, he as-
serts that the administrative judge abused her discretion
in denying class certification. Pet’r’s Br. 16–17. Second, he
argues that the administrative judge erred in dismissing
OPM as a party. Pet’r’s Br. 16. Finally, he contends that
the administrative judge miscalculated the amount of dif-
ferential pay he is owed. Pet’r’s Br. 17. We address each
of these issues in turn.
A. Denial of Class Certification
Before the Board, Mr. Kluge alleged that federal agen-
cies improperly denied differential pay to him and a class
of potentially over 3,000 reservists employed by the federal
government across all agencies who may have been on vol-
untary active duty in support of a contingency operation
under 10 U.S.C. § 12301(d). J.A. 57–59, 206–17. He al-
leged that all federal civilian employers improperly denied
reservists differential pay by following OPM guidance, first
promulgated in December 2009, that states that “voluntary
active duty under 10 U.S.C. [§] 12301(d)” does not qualify
for differential pay. J.A. 55–56; J.A. 478, 495.
The administrative judge denied class certification.
J.A. 6. She first found that certification of the class would
implicate the privacy rights of potential class members “as
certification of the class would reveal to all class members
individual employees pay information and potentially
other Privacy Act protected information.” J.A. 5. She also
found that the putative class lacked commonality because
the class would come from various government agencies,
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4 KLUGE v. DHS
but Mr. Kluge had not alleged that all agencies had acted
in the same manner or for the same reasons. Id. She fur-
ther found that identification of class members would re-
quire detailed analysis of each potential member’s
employment and deployment records—records spanning
over a decade. Id. Finally, she addressed Mr. Kluge’s con-
cern about judicial efficiency, noting that the Board has
heard individual claims similar to the claim posed by Mr.
Kluge since 2015 and has not suffered a deluge of cases.
J.A. 5–6.
On appeal, Mr. Kluge argues that the administrative
judge abused her discretion in denying class certification
because certification of a class is the only fair and efficient
way to address OPM’s allegedly incorrect guidance. Pet’r’s
Br. 25–37. He argues that the administrative judge’s fac-
tual findings regarding privacy concerns, the lack of com-
monality, the inefficiency of identifying class membership,
and the unlikely possibility of opening the floodgates of lit-
igation before the Board are incorrect. Id. Finally, he ar-
gues that the administrative judge erred by not addressing
all the factors for class certification named in Federal Rule
of Civil Procedure 23 and by considering privacy, which is
not identified as a factor in Rule 23 or in other pertinent
statutes or regulations. Id. at 25.
We set aside Board decisions only if they are “(1) arbi-
trary, capricious, an abuse of discretion, or otherwise not
in accordance with law; (2) obtained without procedures re-
quired by law, rule, or regulation having been followed; or
(3) unsupported by substantial evidence.” 5 U.S.C.
§ 7703(c); see also 38 U.S.C. § 4324(d)(1) (establishing our
ability to review the Board’s Uniformed Services Employ-
ment and Reemployment Rights Act decisions in accord-
ance with 5 U.S.C. § 7703). We review the Board’s denial
of class certification for abuse of discretion. Certain For-
mer CSA Emps. v. Dep’t of Health & Hum. Servs., 762 F.2d
978, 986 (Fed. Cir. 1985). The Board “abuses its discretion
when the decision is based on an erroneous interpretation
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KLUGE v. DHS 5
of the law, [based] on factual findings that are not sup-
ported by substantial evidence, or represents an unreason-
able judgment in weighing relevant factors.” O’Farrell v.
Dep’t of Def., 882 F.3d 1080, 1083 (Fed. Cir. 2018) (quoting
Tartaglia v. Dep’t of Veterans Affs., 858 F.3d 1405, 1407–
08 (Fed. Cir. 2017) (internal quotation marks omitted)).
We conclude that the administrative judge did not
abuse her discretion in denying class certification. The ad-
ministrative judge did not err by not considering all criteria
in Rule 23 or by considering criteria not specifically listed
in Rule 23. Mr. Kluge has not shown that the administra-
tive judge erred in finding that putative class members
lack commonality or that identifying class members and
adjudicating their claims as a class would not be a fairer or
more efficient way to proceed. Although we disagree with
the administrative judge’s finding that certification of the
class would require revealing all class member’s private
pay information to all other class members, that error does
not compel us to reverse the denial of class certification.
We further explain each of these conclusions below.
i. Federal Rule of Civil Procedure 23
As an initial matter, the Board, unlike district courts,
is not bound by Federal Rule of Civil Procedure 23 in de-
termining whether to grant or deny class certification.
Compare 5 C.F.R. § 1201.27(c), with Goldman Sachs Grp.,
Inc. v. Ark. Tchr. Ret. Sys., 141 S. Ct. 1951, 1960–61 (2021)
(“As we have repeatedly explained, a court has an obliga-
tion before certifying a class to ‘determin[e] that Rule 23 is
satisfied, even when that requires inquiry into the merits.’”
(alteration in original) (quoting Comcast Corp. v. Behrend,
569 U.S. 27, 35 (2013)). Rather, 5 C.F.R. § 1201.27(c) in-
structs that the applicable provisions of the Federal Rules
of Civil Procedure may “guide[] but not control[]” the ad-
ministrative judge’s decision. And under 5 C.F.R.
§ 1201.27(a), an administrative judge should “hear the case
as a class appeal if . . . she finds that a class appeal is the
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6 KLUGE v. DHS
fairest and most efficient way to adjudicate the appeal,”
among other requirements. Thus, we reject Mr. Kluge’s ar-
gument that the administrative judge was required to ad-
dress any factors identified in Rule 23 or was constrained
to only considering those factors.
ii. Commonality
The administrative judge did not err in finding a lack
of commonality. Mr. Kluge identifies the allegedly incor-
rect OPM guidance statement that “qualifying active duty
does not include voluntary active duty under 10 U.S.C.
[§] 12031(d)” as the unifying legal issue. Pet’r’s Br. 29. He
asserts that all federal employers uniformly adhered to the
OPM guidance. Id.
The evidence Mr. Kluge presents on appeal of this al-
leged universal denial of differential pay to reservists who
participated in voluntary active duty under 10 U.S.C.
§ 12301(d) are statements that the government made in a
parallel case before the United States District Court for the
District of Columbia. 1 Pet’r’s Reply Br. 6–7. These state-
ments are:
OPM’s policy guidance, which is directed to and re-
lied upon by the Federal agencies that must make
the payments to qualifying employees, has been
updated four times . . . but none of the revisions
have altered the 2009 definition of “qualifying ac-
tive duty.”
J.A. 571; see also J.A. 572, 575, and
1 This parallel litigation has since been transferred
to the United States Court of Federal Claims. Order
Granting Plaintiff’s Motion to Transfer, Kluge v. United
States, No. 1:19-cv-02618 (D.D.C. Aug. 24, 2021), ECF No.
51.
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KLUGE v. DHS 7
[L]egal consequences clearly flowed from the deci-
sion, which was included in OPM’s Policy Guidance
Regarding Reservist Differential Under 5 U.S.C.
[§] 5538, and that instructed federal agencies on
how to apply the differential pay statute, and thus
affected the circumstances under which federal em-
ployees could qualify for payments under the stat-
ute.
J.A. 573, 574, 576; Pet’r’s Reply Br. 6–7. Mr. Kluge asks us
to take judicial notice of these statements, which he char-
acterizes as government admissions. Pet’r’s Reply Br. 6–7.
We have already partially decided the issue of whether
to take judicial notice of these statements. Order, Kluge v.
Dep’t of Homeland Sec., No. 21-1787 (Fed. Cir. Oct. 21,
2021), ECF No. 30. After Mr. Kluge filed a motion to take
judicial notice of the filings containing these statements,
we explained that we “may take judicial notice of the fact
that these pleadings were filed at the district court by the
government.” Id. But “[t]he relevance of such material . . .
will be left to the merits panel.” Id.
We determine that the scant evidence provided by
these statements does not show any error in the adminis-
trative judge’s finding that the proposed class lacks com-
monality. Mr. Kluge’s allegation that all federal agencies
followed OPM guidance is undercut by DHS’s decision not
to follow the OPM guidance in Mr. Kluge’s case. After the
administrative judge denied class certification, DHS
agreed that Mr. Kluge was eligible for differential pay. J.A.
464. And, as the administrative judge noted, “OPM’s guid-
ance is just that, guidance.” J.A. 15. It is not binding on
DHS or any of the other agencies that might have employed
a putative class member. Out of every member of the pu-
tative class, we only have information as to Mr. Kluge, and
his case lacks the very feature—his employing agency ad-
hering to OPM guidance—he asserts is common to the
class. The government’s statements in parallel litigation
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8 KLUGE v. DHS
that federal agencies relied on the OPM guidance and that
the guidance affected the circumstances under which fed-
eral employees could qualify for payments cannot sur-
mount the contradictory evidence that DHS did not follow
OPM’s guidance in Mr. Kluge’s case.
We conclude that Mr. Kluge has not identified any er-
ror in the administrative judge’s determination that the
putative class lacks commonality.
iii. Efficiency
Next, we reject Mr. Kluge’s argument that the admin-
istrative judge erred in finding that it would not be efficient
to determine class membership. The administrative judge
explained that identifying all federally employed reservists
and reviewing their employment and deployment records
to determine if they qualified for a differential payment
that they were not paid would not be fairer or more efficient
than individual adjudication. J.A. 5. Mr. Kluge asserts
that the “inefficient and unproductive” method of identify-
ing class members addressed by the administrative judge
is not a necessary or reasonable approach. Pet’r’s Br. 31.
He asserts that the Department of Defense keeps all rele-
vant deployment information in its Defense Finance and
Accounting Service databases and that databases of civil-
ian payroll records are kept by either OPM, the Depart-
ment of Defense, or the National Finance Center. Id. at
31–32. He asserts that it would be “relatively simple for
the Government” to determine class membership by com-
paring these databases. Id. at 32.
We do not find this argument persuasive. Mr. Kluge
merely speculates that all required information is stored in
easily accessible central databases and that it would be rel-
atively simple to use those databases to determine class
membership. Indeed, OPM told the administrative judge
that it did not have any civilian pay records for Mr. Kluge—
those records were ultimately obtained from his employer,
DHS. J.A. 116, 464. Contrary to Mr. Kluge’s assertion, it
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KLUGE v. DHS 9
appears that individual pay records would have to be col-
lected from each putative class member’s federal employer.
Mr. Kluge provided no evidence that those records would
be in a format that is easily compared to military records.
Thus, we conclude that the administrative judge did not err
in finding that a class action would not be fairer or more
efficient.
iv. Privacy
Next, we consider the administrative judge’s finding
that certification of the class would require revealing the
private pay information of all class members to all other
class members. J.A. 5. We conclude this finding is unsup-
ported. We recognize that class members’ private infor-
mation may need to be shared with class counsel. 2 But we
are aware of no reason why class members’ private infor-
mation would need to be shared with other class members.
However, that erroneous finding, alone, does not con-
vince us that the administrative judge abused her discre-
tion in denying class certification. Even if there were no
privacy concerns implicating class formation, a conclusion
that we do not need to reach, the administrative judge was
justified in denying class certification based solely on her
findings that the putative class would lack commonality
and that identification of class membership would not be
2 In finding that the administrative judge’s privacy
concerns are unsupported, we do not go so far as to agree
with Mr. Kluge that potential class members’ information
could be kept entirely in the control of the government. See
Pet’r’s Br. 26–27. We do not see how a class could be ade-
quately represented by an attorney with no access to class
members’ information. Potential class members’ military
records and civilian pay records would have to be produced
at least to class counsel if a class were certified.
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10 KLUGE v. DHS
the fairest and most efficient way to proceed. See 5 C.F.R.
§ 1201.27(a).
We do not go so far as to hold that class adjudication of
claims for differential pay under 5 U.S.C. § 5538 will never
be the fairest and most efficient way to proceed. We con-
clude only that the administrative judge did not abuse her
discretion in finding that the broad class proposed by Mr.
Kluge may not be the fairest and most efficient way to pro-
ceed as required by 5 C.F.R. § 1201.27(a).
B. Dismissal of OPM
The administrative judge found that DHS, rather than
OPM, was the proper party to respond to Mr. Kluge’s dif-
ferential pay claim because DHS was Mr. Kluge’s employ-
ing agency and had access to his employment records. J.A.
6. Mr. Kluge asserts that the administrative judge erred
in substituting DHS for OPM because he has a private
right of action against OPM under 38 U.S.C. § 4324. Pet’r’s
Br. 19–25. We review the statutory interpretation issues
raised by Mr. Kluge de novo. See Butterbaugh v. Dep’t of
Just., 336 F.3d 1332, 1336 (Fed. Cir. 2003). He argues that
by dismissing OPM, the administrative judge denied him
the opportunity to seek remediation of OPM’s allegedly in-
correct guidance. Pet’r’s Br. 22, 24. We disagree.
Section 4324 does not provide Mr. Kluge with a right of
action against OPM in this case. Section 4324(b) provides,
in relevant part, that a “person may submit a complaint
against a Federal executive agency or the Office of Person-
nel Management under this subchapter directly to the
Merit Systems Protection Board.” The Board “shall adju-
dicate any complaint brought before the Board pursuant to
subsection . . . (b).” 38 U.S.C. § 4324(c)(1). And “[i]f the
Board determines that a Federal executive agency or the
Office of Personnel Management has not complied with the
provisions of this chapter relating to the employment or
reemployment of a person by the agency, the Board shall
enter an order requiring the agency or Office to comply
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KLUGE v. DHS 11
with such provisions and to compensate such person for
any loss of wages or benefits suffered by such person by
reason of such lack of compliance.” 38 U.S.C. § 4324(c)(2).
But § 4324 does not, as Mr. Kluge implies, support an in-
terpretation that a claimant may sustain a claim against
OPM for differential pay that should be properly paid by a
different agency. Congress separately identified OPM to
indicate that a claimant can proceed against OPM “as an
employer like any Federal agency” or “to assure the execu-
tion of other OPM duties, for example, its duties on behalf
of employees of the Federal Bureau of Investigation, the
Central Intelligence Agency, and other agencies under sec-
tion 4315(e).” S. Rep. No. 104-371, at 30–31 (1996). Mr.
Kluge does not allege that he was employed by OPM and
does not seek to assure the execution of any other OPM du-
ties. J.A. 43–60. Rather, he seeks to recover differential
pay that 5 U.S.C. § 5538(c)(1) indicates shall be paid by his
“employing agency,” DHS. Section 4324 does not permit
him to recover differential pay owed by DHS from OPM.
Mr. Kluge argues that he must be permitted to main-
tain an action against OPM to overturn OPM’s guidance,
which states that “qualifying active duty does not include
voluntary active duty under 10 U.S.C. [§] 12301(d).” Pet’r’s
Br. 21–22; J.A. 495. He argues that DHS failed to pay his
differential pay because it was following the OPM guidance
and that he must be allowed to maintain a suit against
OPM because its guidance was followed. Pet’r’s Br. 22. Mr.
Kluge’s argument is misplaced, as the contested sentence
of the guidance was not used to deny Mr. Kluge differential
pay. See J.A. 464. Rather, DHS agreed with Mr. Kluge
that he was owed differential pay. Id. Mr. Kluge asserts
that he was constructively denied differential pay as it was
not automatically provided to him but, rather, was only
given to him after he asked for it in litigation approxi-
mately ten years after his active duty. Pet’r’s Reply Br.
13–18. But we cannot say here that DHS ever denied Mr.
Kluge differential pay, constructively or otherwise. Mr.
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12 KLUGE v. DHS
Kluge asserts, without any evidence, that DHS would have
denied any request made prior to filing a lawsuit. Id. at 17.
But he does not assert that he ever raised the issue with
DHS before appealing to the Board. 3 Even more tenuous
than Mr. Kluge’s assertion that DHS would have denied
any request made outside of litigation is his assertion that
the reason for that hypothetical denial would have been the
OPM guidance. There are simply no plausible allegations
that Mr. Kluge, or anyone else, was ever denied differential
pay due to the OPM guidance.
We conclude that Mr. Kluge has not shown any legal
error or other abuse of discretion in the administrative
judge’s substitution of DHS for OPM and dismissal of
OPM.
C. Differential Pay Calculation
Finally, Mr. Kluge argues that the administrative
judge erred in calculating the differential pay he is owed as
$274.37 plus interest. Pet’r’s Br. 37–40; Pet’r’s Reply Br.
26–30; see J.A. 20. He maintains that he is entitled to
$17,166.30 plus interest. Pet’r’s Reply Br. 29; see J.A. 408
(showing Mr. Kluge’s calculation). We disagree.
3 We do not hold that it is proper for an agency to
wait until it receives a request before paying differential
pay. Indeed, 5 U.S.C. § 5538(c)(1)–(3) states that the em-
ploying agency should pay differential pay “to the extent
practicable, at the same time and in the same manner as
would basic pay if such employee’s civilian employment
had not been interrupted.” But, here, there is no indication
that DHS’s failure to pay Mr. Kluge’s differential pay “at
the same time and in the same manner as [it] would [pay]
basic pay if such employee’s civilian employment had not
been interrupted,” id. § 5538(c)(3), was due to the chal-
lenged OPM guidance.
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KLUGE v. DHS 13
Mr. Kluge and DHS agree to certain basic facts under-
lying the differential-pay calculation, although they disa-
gree as to the computation method. Both parties agreed
that Mr. Kluge is entitled to a reservist differential under
5 U.S.C. § 5538 for the period of February 27 to July 30,
2011. J.A. 12; J.A. 464. They agree that Mr. Kluge re-
ceived his civilian pay for the Fourth of July holiday but
was otherwise on leave-without-pay status for this period.
J.A. 12; J.A. 465; Pet’r’s Br. 10 n.8. They agree that, had
he not been deployed, Mr. Kluge would have earned
$4,704.80 per biweekly pay period, or $470.48 per eight-
hour workday, in his civilian DHS job. J.A. 12; J.A. 464.
Unlike his civilian pay, Mr. Kluge’s military pay was paid
monthly. In February, the military paid him $11,630.74.
J.A. 11. In each of March, April, May, and June, the mili-
tary paid him $10,169.94. Id. In July, the military paid
him $9,994.94. Id.OPM’s guidance provides a method for calculating dif-
ferential pay, J.A. 483–88, but the administrative judge re-
jected that method as unnecessarily complicated and
unfair to military service members because it excludes hol-
idays for which civilian employees are paid even though
they do not have to work. J.A. 16. She developed her own
calculation method for comparing bi-weekly civilian pay to
monthly military pay on a pay-period basis. First, she con-
verted monthly military pay to a bi-weekly equivalent by
multiplying each month’s military pay by 12 to convert it
to an annual amount, and then dividing by 26, the number
of pay periods in pay year 2011. J.A. 17. She then con-
verted the calculated bi-weekly military pay to a daily mil-
itary pay amount by dividing by 10, the number of
workdays in the civilian bi-weekly pay period. 4 Id. The
4 Alternatively, the same calculation can be reached
“by dividing the bi-weekly comparative pay by 80, the
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14 KLUGE v. DHS
results of these conversions are summarized in the table
below:
Month Monthly Calculated Calculated
Military Pay Bi-Weekly Daily
Military Pay Military Pay
February $11,630.74 $5,368.03 $536.80
March $10,169.94 $4,693.81 $469.38
April $10,169.94 $4,693.81 $469.38
May $10,169.94 $4,693.81 $469.38
June $10,169.94 $4,693.81 $469.38
July $9,994.94 $4,613.05 $461.30
J.A. 16–20.
The administrative judge used these calculated daily
military pay rates to determine the pay Mr. Kluge received
from the military during each bi-weekly civilian pay period,
some of which extend across two months. For example, the
first pay period at issue began on February 27, 2011, and
ended on March 12, 2011. It included one civilian workday
in February (February 28) and nine civilian workdays in
March. J.A. 17–18. For that pay period, the administra-
tive judge determined that Mr. Kluge’s military pay was a
single day at the calculated daily military pay rate for Feb-
ruary and nine days at the calculated daily military pay
rate for March: ($536.80×1)+($469.38×9), yielding a total
number of hours in a bi-weekly period, [and] the daily rate
was calculated multiplying by 8, the number of hours in a
workday.” J.A. 17.
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KLUGE v. DHS 15
calculated military pay for that pay period of $4,761.23.
J.A. 18. The results of the administrative judge’s calcula-
tions are summarized below:
Pay Dates Calculated Civilian Calculated
Period Military Pay Pay
Pay Differential
5 2/27–3/12 $4,761.23 $4,704.80 None
6 3/13–3/26 $4,693.81 $4,704.80 $10.99
7 3/27–4/9 $4,693.81 $4,704.80 $10.99
8 4/10–4/23 $4,693.81 $4,704.80 $10.99
9 4/24–5/7 $4,693.81 $4,704.80 $10.99
10 5/8–5/21 $4,693.81 $4,704.80 $10.99
11 5/22–6/4 $4,693.81 $4,704.80 $10.99
12 6/5–6/18 $4,693.81 $4,704.80 $10.99
13 6/19–7/2 $4,684.73 $4,704.80 $20.07
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16 KLUGE v. DHS
Pay Dates Calculated Civilian Calculated
Period Military Pay Pay
Pay Differential
14 7/3–7/16 $4,151.70 $4,237.02 $85.62 6
5
15 7/17–7/30 $4,613.05 $4,704.80 $91.75
J.A. 16–20. The administrative judge concluded that Mr.
Kluge was owed differential pay totaling $274.37 plus in-
terest. J.A. 20.
5 Mr. Kluge’s civilian pay is lower for pay period 14
because DHS paid him $470.48 for the Fourth of July fed-
eral holiday. J.A. 20. We note that there appears to be an
error of approximately three dollars in the administrative
judge’s calculation of the civilian pay Mr. Kluge would have
earned during this pay period but for his military service.
We calculate that Mr. Kluge would have received $4,234.32
in civilian pay for that pay period, calculated by subtract-
ing his $470.48 holiday pay from his $4,704.80 civilian bi-
weekly pay. The administrative judge calculated that he
would have received $4,237.02. As this error is in Mr.
Kluge’s favor and the government does not appeal the ad-
ministrative judge’s calculation, we will not find that Mr.
Kluge’s differential pay award should be decreased.
6 There also appears to be an error of 30 cents in the
administrative judge’s calculation of differential pay for
pay period 14. While the administrative judge calculated
that Mr. Kluge was entitled to $85.62 in differential pay, if
we assume that his civilian biweekly pay would have been
$4,237.02, then he was entitled to $85.32 in differential
pay. As this error is also in Mr. Kluge’s favor, we will not
find that the amount of differential pay awarded to him
should be decreased.
Case: 21-1787 Document: 50 Page: 17 Filed: 02/22/2023
KLUGE v. DHS 17
Mr. Kluge disagrees. He asserts that he is owed
$17,166.30 plus interest or, in the alternative, three times
that amount. Pet’r’s Br. 37–39; Pet’r’s Reply Br. 29. He
argues that the administrative judge failed to consider the
different number of workdays that he was expected to work
while on active duty in the military versus at a civilian job
and that a military job requires 24-hour accountability.
Pet’r’s Br. 37–39. To account for the fact that a reservist
on active duty is expected to work seven days a week (four-
teen days over a two-week period), while they would only
work five days at their civilian job (ten days over a two-
week period), Mr. Kluge would calculate his daily military
pay rate by dividing his monthly military pay by the num-
ber of days in that month. J.A. 407. Thus, for March, Mr.
Kluge would find that he was paid $328.06 7 per day
($10,169.94 divided by 31, the number of days in March),
rather than $469.38 as the administrative judge found.
Compare J.A. 18, with J.A. 407–08. By calculating daily
military pay in this manner, Mr. Kluge divides his monthly
military pay over all days, including weekends and holi-
days, equally. He then calculates differential pay by com-
paring the military pay accrued only for the days he would
have been working in his civilian employment to the total
civilian pay he would have received had he not been on ac-
tive duty. J.A. 408. For the first time on appeal, he goes
even further, arguing that differential pay should be calcu-
lated on an hourly basis rather than a daily basis to
7 We note that Mr. Kluge’s calculations, provided on
J.A. 408, include some mathematical errors. For example,
Mr. Kluge’s calculation appears to use the incorrect num-
ber of days for the month of February and includes differ-
ential pay for the period from July 31 to August 12, even
though his active-duty service ended on July 30. See J.A.
408; J.A. 225. Throughout this opinion, when we describe
the calculation Mr. Kluge proposes, we attempt to follow
the method he describes without reproducing the errors.
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18 KLUGE v. DHS
account for the fact that while on active duty he was ac-
countable to his commander at all hours—effectively a 24-
hour workday. Pet’r’s Br. 39. He therefore asks, in the
alternative, for his differential pay calculation ($17,166.30
plus interest) to be multiplied by three to account for the
disparity between the 24-hour military workday and the 8-
hour civilian workday. Id.We may set aside the administrative judge’s differen-
tial pay calculation only if it is “(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). The issue here
is whether the administrative judge’s calculation method
complies with the statute governing differential pay, 5
U.S.C. § 5538.
We find Mr. Kluge’s arguments regarding the calcula-
tion of differential pay unpersuasive because his proposed
method is contrary to 5 U.S.C. § 5538. Section 5538 pro-
vides that:
(a) An employee who is absent from a position of
employment with the Federal Government in order
to perform active duty in the uniformed services
pursuant to a call or order to active duty under sec-
tion 12304b of title 10 or a provision of law referred
to in section 101(a)(13)(B) of title 10 shall be enti-
tled, while serving on active duty, to receive, for
each pay period described in subsection (b), an
amount equal to the amount by which--
(1) the amount of basic pay which would
otherwise have been payable to such em-
ployee for such pay period if such em-
ployee’s civilian employment with the
Government had not been interrupted by
that service, exceeds (if at all)
Case: 21-1787 Document: 50 Page: 19 Filed: 02/22/2023
KLUGE v. DHS 19
(2) the amount of pay and allowances
which (as determined under subsection
(d))--
(A) is payable to such employee for
that service; and
(B) is allocable to such pay period.
5 U.S.C. § 5538 (emphases added). The statute specifies
that differential pay should be calculated by determining
the difference between civilian pay for a pay period and the
military pay allocable to that pay period. Mr. Kluge asks
for differential pay to be calculated on a per day (or per
hour) basis rather than on the per pay period basis re-
quired by the statute.
We also reject Mr. Kluge’s argument that the adminis-
trative judge’s differential pay calculation is contrary to
our decision in Butterbaugh. Pet’r’s Br. 37–40. In Butter-
baugh, we addressed a different statute, 5 U.S.C.
§ 6323(a)(1), under which federal employees are granted up
to “15 days” of paid leave to attend reserve or National
Guard training. 336 F.3d at 1333. We held that federal
agencies’ practice of counting every day of training, includ-
ing weekends and holidays, against their employees’ allot-
ted military leave violated the statute. We held that “the
‘days’ that section 6323(a)(1) refers to are leave days, not
‘training days’ or ‘reserve duty days.’” Id. at 1337. We ex-
plained that, generally, “employees are not accountable to
their employers for time they are not required to work,”
and federal employees did not need to expend their military
leave for days on which they were not scheduled to work
for their federal agency employer. Id. Butterbaugh does
not help Mr. Kluge because § 5538, unlike § 6323(a)(1),
specifies that differential pay should be calculated and paid
on a per pay period basis, not on a per day basis. Butter-
baugh’s analysis of the word “day” in § 6323(a)(1) is simply
irrelevant to the differential pay calculation under § 5538.
Case: 21-1787 Document: 50 Page: 20 Filed: 02/22/2023
20 KLUGE v. DHS
We do not hold that the administrative judge’s calcula-
tion method is the best or only way to calculate differential
pay under § 5538. We only hold that Mr. Kluge has failed
to show that the administrative judge violated § 5538 or
otherwise abused her discretion in calculating the differen-
tial pay owed in this case.
III. CONCLUSION
We have considered Mr. Kluge’s other arguments and
find them unavailing. For the foregoing reasons, we affirm
the Board’s final decision.
AFFIRMED
COSTS
No costs.