Andrew C. Eller, Jr. v. Office of Personnel Management

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
2014 MSPB 72
Docket No. CH-0841-13-0334-R-1
Andrew C. Eller, Jr.,
Appellant,
v.
Office of Personnel Management,
Agency.
September 5, 2014
Paula N. Dinerstein, Washington, D.C., for the appellant.
Earl A. Sanders, Esquire, and Karla W. Yeakle, Washington, D.C., for the
agency.
BEFORE
Susan Tsui Grundmann, Chairman
Anne M. Wagner, Vice Chairman
Mark A. Robbins, Member
OPINION AND ORDER
¶1 Pursuant to 5 U.S.C. § 7703(d), the Director of the Office of Personnel
Management (OPM) has filed a petition for reconsideration of our prior decision
finding that the appellant is entitled to receive a discontinued service retirement
(DSR) annuity under 5 U.S.C. § 8414(b)(1)(A). See Eller v. Office of Personnel
Management, 121 M.S.P.R. 17, ¶ 10 (2014); Reconsideration File (RF), Tab 1.
For the reasons that follow, OPM’s petition for reconsideration is DENIED and
our prior Opinion and Order is AFFIRMED as MODIFIED.
2
BACKGROUND
¶2 The Board’s prior decision contains a comprehensive recitation of the facts
informing the instant dispute. See Eller, 121 M.S.P.R. 17, ¶¶ 2-5. OPM does not
dispute the underlying facts as found by the Board in its prior decision. See RF,
Tab 4 at 11. For clarity, we provide the following brief synopsis. The appellant
held a position with the Department of the Interior until his employing agency
removed him for unacceptable performance. Eller, 121 M.S.P.R. 17, ¶ 2.
Following an appeal to the Board, the Department of the Interior and the
appellant entered into a settlement agreement providing, inter alia, that the
appellant would be converted to a 4-year term appointment as a Biologist with the
Department of the Interior. Id. The parties’ agreement made clear that “[t]he
intent of this provision is to provide the Appellant adequate time under current
[OPM] regulations . . . to achieve a sufficient age and sufficient years of federal
service to permit him to receive a discontinued service annuity should his federal
service discontinue at the end of the term specified herein.” Id.
¶3 As envisioned by the settlement agreement, the appellant served as a
Biologist with the agency for 4 years, at the end of which the agency extended his
appointment for 1 additional year. Id., ¶ 3. The Department of the Interior
subsequently separated the appellant at the end of this additional year, citing the
expiration of his term appointment, and he applied for an immediate DSR annuity
with OPM. Id. At the time of his final separation from employment, the
appellant had over 23 years of federal service and was 51 years of age. Id.
¶4 OPM, however, denied the appellant’s application for an immediate DSR
annuity on the grounds that the settlement agreement returning him to work with
the Department of the Interior was an artifice designed to evade the statutory
requirements for receiving a DSR annuity. Id., ¶¶ 4-5. The administrative judge
reversed OPM’s final decision denying the appellant’s annuity application, id.,
¶ 5, and we affirmed the administrative judge’s initial decision, holding that,
because the appellant was returned to actual federal service and objectively met
3
the statutory eligibility requirements for a DSR annuity, OPM was without the
authority to deny his application, id., ¶¶ 8-9. In so holding, we found the Board’s
prior decision in Parker v. Office of Personnel Management, 93 M.S.P.R. 529,
¶¶ 18, 20 (2003), aff’d, 91 F. App’x 660 (Fed. Cir. 2004), distinguishable because
the parties in that case entered into a settlement agreement which only created the
impression that the appellant was qualified for a DSR annuity on paper. See
Eller, 121 M.S.P.R. 17, ¶¶ 8-9. Differing from Parker, we concluded that, when
an employee is assigned to a position of employment in the federal service and
actually serves in that position, OPM has no discretion to deviate from the
computation formulas, and it cannot deny the employee an annuity based on its
subjective determination that the employee’s federal service fails to qualify him
for an annuity when he otherwise objectively satisfies the statutory annuity
formula. Id., ¶ 9.
¶5 The appellant had over 20 years of service and was more than 50 years of
age at the time of the expiration of his term appointment with the Department of
the Interior. The Board further concluded that his separation was involuntary,
and, accordingly, we found that the appellant was entitled to receive an
immediate DSR annuity under 5 U.S.C. § 8414(b)(1)(A). Eller, 121 M.S.P.R. 17,
¶¶ 3, 9-13.
¶6 The Director of OPM has filed a petition for reconsideration arguing that,
contrary to the import of our prior decision, OPM has a statutory obligation to
determine whether a separation from service is involuntary for the purposes
of 5 U.S.C. § 8414(b)(1)(A) and that the appellant’s entire period of additional
federal service with the Department of the Interior—5 years in total—should not
be counted toward his DSR annuity eligibility because a term position may last
no more than 4 years. RF, Tab 4 at 14-17, 20-21. In her petition for
reconsideration, the Director also asserts that the Board misinterpreted its
decision in Parker, “making it narrower than it actually was” and further
maintains that the Federal Circuit’s decision in Eldredge v. Department of the
4
Interior, 451 F.3d 1337 (Fed. Cir. 2006), precludes neither OPM, nor the Board,
from finding the appellant ineligible to receive a DSR annuity. RF, Tab 4
at 21-22, 25. Lastly, the Director argues that, if the Board’s prior decision
remains unchanged, agencies and employees will have an incentive to enter into
similar settlement arrangements in the future, thus impermissibly shifting
employment and litigation costs to the retirement fund and inequitably rewarding
employees whose performance is alleged to be unacceptable. Id. at 30. The
appellant has filed a response to the petition for reconsideration. RF, Tab 5.
ANALYSIS
¶7 The Director of OPM may file a petition for reconsideration of a final
Board decision if the Director determines that: (1) the Board erred in interpreting
a civil service law, rule, or regulation affecting personnel management; and
(2) the Board’s decision will have a substantial impact on a civil service law,
rule, or regulation, or policy directive. 5 U.S.C. § 7703(d); Whittacre v. Office of
Personnel Management, 120 M.S.P.R. 114, ¶ 7 (2013); 5 C.F.R. § 1201.119(a).
The Board will consider de novo the arguments raised by OPM on petition for
reconsideration, even in cases where OPM was a party to the proceedings before
the Board. Scott v. Office of Personnel Management, 117 M.S.P.R. 467, ¶ 9
(2012).
The Board’s prior decision does not improperly restrict OPM’s authority to
administer federal employee retirement benefits.
¶8 First, we have considered OPM’s arguments suggesting that the Board’s
prior decision improperly confines OPM’s role in administering federal employee
retirement benefits and asserting that it has an independent statutory obligation to
determine whether an employee’s separation is involuntary for the purposes of a
DSR annuity under 5 U.S.C. § 8414(b)(1)(A). See RF, Tab 4 at 14-16. OPM’s
authority to administer federal employee retirement benefits is not in dispute.
See, e.g., Jordan v. Office of Personnel Management, 77 M.S.P.R. 610, 614
(1998) (Congress authorized OPM to administer the federal retirement system and
5
gave it the power to perform acts and prescribe regulations it deems necessary to
carry out that authority), recons. denied, 86 M.S.P.R. 144 (2000), overruled in
part on other grounds by Parker, 93 M.S.P.R. 529, ¶ 18; Hymon v. Department of
the Navy, 39 M.S.P.R. 106, 108 (1988) (OPM is the agency responsible for
administering federal employee retirement programs and the retirement fund).
The Board, however, has jurisdiction over an “administrative action or order
affecting the rights or interests of an individual or of the United States under the
[Federal Employees’ Retirement System (FERS)] administered by
[OPM].” 5 U.S.C. § 8461(e)(1); see also 5 U.S.C. § 8347(d)(1) (establishing the
Board’s jurisdiction over similar actions involving the Civil Service Retirement
System (CSRS)). Thus, while OPM must make certain determinations about an
applicant’s eligibility for benefits in the course of administering the several
federal employee retirement programs, those determinations which affect the
rights or interests of an individual or the United States are appealable to the
Board. 5 U.S.C. § 8461(e)(1); 5 U.S.C. § 8347(d)(1). We find no support for
OPM’s argument that our prior decision unnecessarily limits its authority to
administer federal retirement benefits.
The length of the appellant’s term position does not negate his eligibility for a
DSR annuity.
¶9 OPM argues for the first time on reconsideration that the appellant’s
federal service following his return to work pursuant to the settlement agreement
with the Department of the Interior should not be counted toward his eligibility
for a DSR annuity because it lasted for 5 years and, that without approval from
OPM, a term position may last no longer than 4 years. RF, Tab 4 at 20-21.
Although the appellant argues in response that this is a new argument raised for
the first time in OPM’s petition for reconsideration, which the Board should not
consider, RF, Tab 5 at 9, the Board will review all of OPM’s arguments raised in
a petition for reconsideration de novo, even if not asserted below, see
Scott, 117 M.S.P.R. 467, ¶ 9. We agree with the appellant’s alternative argument,
6
however, that OPM’s reliance on the length of his service following his return to
work does not preclude him from qualifying for a DSR annuity. RF, Tab 5
at 9-10.
¶10 Pursuant to 5 C.F.R. § 316.301(a), “[a]n agency may make a term
appointment for a period of more than 1 year but not more than 4 years to
positions where the need for an employee’s services is not permanent.”
Agencies, moreover, “may extend appointments made for more than 1 year but
less than 4 years up to the 4-year limit in increments determined by the agency.”
Id. OPM “may authorize exceptions beyond the 4-year limit when the extension
is clearly justified and is consistent with applicable statutory
provisions.” 5 C.F.R. § 316.301(b). Here, however, OPM contends that the
Department of the Interior never requested permission to extend the appellant’s
term position beyond the 4-year regulatory limit, and it asserts that his service in
a 5-year term position is ultra vires and thus voids his entire period of service for
the purposes of determining his eligibility for a DSR annuity. RF, Tab 4 at 20-
21.
¶11 We agree with the appellant, however, that OPM has cited to no authority
for this proposition, see RF, Tab 5 at 10, and we decline to adopt such a rule
under the facts of this case. The Board looks to the totality of the circumstances
to determine the nature of an employee’s appointment. Edwards v. Department of
the Air Force, 120 M.S.P.R. 307, ¶ 7 (2013). The Federal Circuit, moreover,
recently opined that the “regulatory and statutory scheme requires that the nature
[of an employee’s] appointment be judged at the outset, without regard to service
ultimately completed.” Mitchell v. Merit Systems Protection Board, 741 F.3d 81,
87 (Fed. Cir. 2014) (emphasis added).
¶12 Based upon the settlement agreement returning the appellant to federal
service, we find that the appellant was appointed to a term position. The parties’
settlement agreement expressly stated that the appellant would be
“convert[ed] . . . to a four (4) year term appointment (GS 11/8) as a Biologist.”
7
Initial Appeal File (IAF), Tab 6 at 24. Although the record developed below does
not contain a copy of the Standard Form (SF) 50 effecting the appellant’s
appointment to this position, the SF-50 effecting his subsequent removal reflects
that he was removed based upon the expiration of a term appointment. See id.
at 44. Despite the fact that this document was issued by the agency at the time of
the appellant’s removal, and not at the outset of his appointment, we find that the
information contained therein is relevant insofar as it reflects the nature of the
appellant’s appointment at the time of its making, and it supports the conclusion
that he was placed into a term position upon his return to federal service. See,
e.g., Hamilton v. Department of Defense, 80 M.S.P.R. 636, ¶ 8 (1999) (an SF-50
may be considered as relevant evidence, but is not dispositive).
¶13 We note, moreover, that even if we were to accept OPM’s argument that
the appellant’s service in a term position for more than 4 years without OPM’s
approval is ultra vires, we could not countenance the position advanced by OPM
that his entire period of service is therefore void ab initio. 1 RF, Tab 4 at 21.
Under OPM’s regulations, “[t]he employment of a term employee ends
automatically on the expiration of his term appointment unless he has been
separated earlier . . . .” 5 C.F.R. § 316.303(b). Under the terms of the settlement
agreement, the appellant began serving in his term position effective January 12,
2005, and he would have served in that position through and including
January 11, 2009. At that time, the appellant would have had over 22 years of
federal service and would have been 50 years old. IAF, Tab 6 at 44. To be
1
In making this argument, OPM does not address what type of appointment the
appellant held but only asserts that it should not be classified as a term appointment.
RF, Tab 4 at 20-21. If accepted, we believe OPM’s argument would raise the
possibility that the appellant’s removal is an adverse action subject to the provisions of
chapter 75. We decline, however, to engage in such speculation, and we find no basis
to accept OPM’s argument that the appellant’s service in a term position for more than
4 years transformed his appointment into something other than a term appointment. Cf.
Mitchell, 741 F.3d at 87.
8
entitled to a DSR annuity, he needed to have completed 20 years of service and
have been 50 years old. 5 U.S.C. § 8414(b)(1)(A); cf. Resnick v. Office of
Personnel Management, 120 M.S.P.R. 356, ¶ 7 (2013) (finding that an applicant
for an annuity under CSRS pursuant to 5 U.S.C. § 8336(e) must meet both the
length of service and age requirements at the time of his separation). Thus, even
if we were to discount the final year of the appellant’s service with the
Department of the Interior, which we do not, we would still conclude that he was
appointed to a term position, by the expiration of which he had qualified for a
DSR annuity.
The Board’s decision in Parker does not provide OPM with a basis to deny the
appellant’s application for an immediate DSR annuity.
¶14 In its petition for reconsideration, OPM also argues that the Board
misinterpreted its prior decision in Parker by narrowing the scope of authority it
previously extended to OPM to determine whether any separation date established
by a settlement agreement to which OPM is not a party is an artifice designed to
evade the statutory requirements for entitlement to an annuity. See
Parker, 93 M.S.P.R. 529, ¶ 18; RF, Tab 4 at 25-26. As explained below, we
reaffirm our prior decision distinguishing Parker, and, rather than narrowing
Parker’s holding, we find that accepting OPM’s application of Parker to the facts
of this case would constitute a considerable expansion of that precedent, which
we cannot endorse. See Eller, 121 M.S.P.R. 17, ¶¶ 8-9.
¶15 Prior to the Board’s decision in Parker, the Board had held that, when an
employee resigns pursuant to a settlement agreement, the date of resignation
under the agreement is controlling for determining retirement entitlements. See,
e.g., Jordan, 77 M.S.P.R. at 614. In reaching this conclusion, the Board cited not
only the policy considerations favoring the resolution of disputes through
settlement but also the fact that a settlement entered into the record before the
Board was equivalent to a final order and thus was entitled to the same effect as
any other final Board order. Id. at 615, 617. In Parker, however, the Board
9
overruled Jordan insofar as it held that OPM is conclusively bound by the terms
of a settlement agreement to which it was not a party. 93 M.S.P.R. 529, ¶ 18.
Noting that factual admissions in a settlement agreement have been held not to be
binding on a person who was not a party to the agreement and who did not have
an opportunity to contest the alleged facts before the agreement was approved,
id., ¶ 17 (citing In re Warmus, 276 B.R. 688, 691, 694-95 (S.D. Fla. 2002)), the
Board held that OPM has the authority to determine whether any separation date
established by the agreement is an artifice designed to evade the statutory
requirements for entitlement to an annuity, id., ¶ 18. The Board further explained
that OPM’s authority to question a personnel action taken as a result of a
settlement applies whether the statutory provisions at issue implicate filing
deadlines or substantive criteria for entitlement to a retirement benefit. Id.
¶16 As we explained in our prior order, however, the factual circumstances
leading to the Board’s decision in Parker differ significantly from the facts of
this case. See Eller, 121 M.S.P.R. 17, ¶¶ 8-9; Parker, 93 M.S.P.R. 529, ¶¶ 18,
20-21. In Parker, the appellant and the agency entered into a settlement
agreement designed “for no other purpose than to give the appearance that the
appellant had the service necessary for him to receive a CSRS
annuity,” 93 M.S.P.R. 529, ¶ 20 (emphasis added), and it is undisputed that the
appellant in that case never served any portion of the time that the parties’
settlement agreement stipulated he had served, id., ¶¶ 19-21. The Board found
that OPM could look behind the stipulations within a settlement agreement in an
effort to determine whether the agreement contained an artifice designed to evade
the statutory requirements for an employee’s entitlement to an annuity. Id., ¶¶
17-18.
¶17 Nowhere in the Board’s decision in Parker, however, was there a
suggestion that this authority extends beyond reviewing factual admissions or
stipulations contained in settlement agreements. See id., ¶ 17 (discussing
admissions and stipulations of fact in settlement agreements). It is undisputed,
10
moreover, that the instant settlement agreement did not stipulate that the
appellant served in a term position in which he did not serve but rather provided
the appellant with the right to serve in a term position, in which he actually
served. 2 See IAF, Tab 6 at 24-25. Accordingly, the motivating concern in
Parker—that records could be revised or manipulated to reflect that something
had occurred, which in reality had not—is not present in this case. Rather, the
agreement at issue provided the appellant with the right to have something
happen—his assignment to a term position for a period of years—which actually
took place, and we again find no authority for OPM’s position that it has the
authority to look behind a federal employee’s actual federal service to determine
whether he has earned the right to receive a retirement annuity. See
Eller, 121 M.S.P.R. 17, ¶ 9 & n.5.
¶18 Additionally, as suggested above, adopting OPM’s proposed application of
Parker would involve a substantial expansion of that decision. Parker was
focused on a stipulation of fact in a settlement and OPM’s ability to ensure that
such a stipulation was not intended to create title to a right which would not
otherwise exist. See 93 M.S.P.R. 529, ¶¶ 17-18. OPM’s proposed subjective
review of an applicant’s actual federal service, and the motivation for such
service, not only exceeds the scope of Parker but also runs counter to
long-established Board precedent holding that OPM is constrained by law to
follow the annuity computation formulas passed by Congress. See Thompson v.
Office of Personnel Management, 81 M.S.P.R. 677, ¶ 6 (1999), aff’d in part,
vacated in part, and remanded, 230 F.3d 1381 (Fed. Cir. 2000) (Table). We
decline to read Parker beyond the facts presented in that case, and we reaffirm
our prior finding that OPM may not reject an application for a DSR annuity either
because it believes that the employee’s federal service should not be counted
2
See infra ¶¶ 25-27.
11
toward his DSR annuity eligibility or because it disagrees with the motivation for
returning the employee to actual federal service. See Eller, 121 M.S.P.R. 17, ¶ 9
& n.5 (finding that the parties’ intent for returning an employee to actual federal
service does not vitiate the employee’s objective satisfaction of the federal
service longevity requirement for a DSR annuity).
OPM’s Handbook does not compel a different result in this case.
¶19 Lastly, OPM contends that the Board overlooked the general principle
contained within its Handbook that “[a] separation is not qualifying for a [DSR
annuity] if the employee voluntarily leaves regular long-term (career)
employment to accept a short-term appointment with full knowledge of its early
termination,” see Civil Service Retirement System and Federal Employees’
Retirement System Handbook for Personnel and Payroll Offices (Handbook),
§ 44A2.1-8A, and that the Board also failed to consider an “exception to the
exception” provision which provides that, if “short-term employment was
arranged solely to create title to an annuity, the separation is not considered
qualifying for [a DSR annuity],” id., § 44A2.1-8B. See RF, Tab 4 at 21-25. OPM
further challenges the Board’s assertion that the appellant was immediately
placed in a term position following his removal under chapter 43 and that he
actually served 5 full years in the term position. RF, Tab 4 at 19. As explained
below, we MODIFY our prior Opinion and Order on this latter factual issue. Our
modification, however, does not change our analysis.
¶20 At the outset, as we explained in our previous decision, we cannot agree
with OPM that the appellant’s original separation from employment with the
Department of the Interior triggered the application of OPM’s “general rule” that
a separation from employment does not qualify an applicant for a DSR annuity
when he voluntarily leaves regular long-term employment to accept a short-term
appointment. See Eller, 121 M.S.P.R. 17, ¶ 11. The hallmark of a voluntary
separation from employment is the employee’s initiation of the action. Id. (citing
Miller v. Department of Homeland Security, 111 M.S.P.R. 325, ¶ 10 (2009), aff’d,
12
361 F. App’x 134 (Fed. Cir. 2010)). The appellant’s original separation from
employment from the Department of the Interior, however, was taken pursuant to
chapter 43 of Title 5, a performance-based action which OPM itself considers to
be involuntary for the purposes of a DSR annuity. See Eller, 121 M.S.P.R. 17,
¶ 13; Handbook, § 44A1.1-2A. Thus, this case is dissimilar from those
envisioned by the rule established in OPM’s Handbook where an employee
voluntarily leaves long-term employment and accepts a short-term position. For
these same reasons, OPM’s argument that the appellant was voluntarily converted
from a career position to a term position pursuant to the settlement agreement is
also unpersuasive. See PFR File, Tab 3 at 18-19. Although the appellant’s
conversion to a term appointment was the result of the settlement agreement, the
impetus for that agreement was the agency’s performance-based action under
chapter 43. Here, where the appellant did not initiate his conversion to a term
position, we find OPM’s general rule inapplicable. See Eller, 121 M.S.P.R. 17,
¶ 13.
¶21 We also find OPM’s argument that the appellant had a break in service
between his career and term appointments unavailing. See PFR File, Tab 3 at 19.
Pursuant to OPM’s Handbook, a separation is qualifying for DSR purposes if,
among other requirements, the employee moved to a time-limited appointment
without a break in service exceeding 3 days. Handbook, § 44A2.1-8B. In her
request for reconsideration, the Director argues that more than 3 days elapsed
between the appellant’s original removal from service with the Department of the
Interior and the effective date of the settlement agreement rescinding his removal
and converting him to a term appointment. Id. (citing Handbook, § 44A2.1-8B).
Under the terms of the settlement agreement, however, the appellant was restored
to employment without a break in service. IAF, Tab 6 at 24. In the absence of an
actual break in service, we find that the manner in which the appellant was
returned to duty does not invalidate his actual federal service, the vast majority of
which he actually served. See Eller, 121 M.S.P.R. 17, ¶ 9 & n.5. Moreover,
13
because we find that OPM’s Handbook is entitled to little deference in this case,
see infra ¶ 23, we also are unpersuaded that OPM’s 3-day break in service rule
should preclude the entirety of the appellant’s service in his term position from
being counted toward his DSR annuity eligibility.
¶22 We further find this case dissimilar from those in which the Board has held
that an employee’s resignation or retirement is deemed voluntary when effected
pursuant to the terms of a settlement agreement and precludes the appellant from
relitigating whether his separation was voluntary for the purposes of an appeal
under chapter 75 or a retirement annuity. See, e.g., Jordan v. Office of Personnel
Management, 108 M.S.P.R. 119, ¶¶ 11-12 (2008). Here, the Department of the
Interior agreed to cancel the appellant’s original involuntary removal under
chapter 43 and to assign him to a term appointment. IAF, Tab 6 at 24. We thus
find no support for OPM’s argument that the appellant voluntarily initiated his
departure from a career position with the Department of the Interior in order to
accept a term position by voluntarily entering into a settlement with the
Department of the Interior. See Eller, 121 M.S.P.R. 17, ¶¶ 11-12.
¶23 As the appellant argues in response to OPM’s petition, moreover, the OPM
Handbook’s “general rule” that a separation is not qualifying for a DSR annuity if
the employee voluntarily leaves long-term employment to accept a short-term
appointment with full knowledge of its early termination has been strongly
criticized by the Federal Circuit, and we accord little deference to its application
to the facts of this case. See Eldredge, 451 F.3d at 1341-43 (“[n]either [OPM’s]
advisory opinion nor the Handbook cites any authority for the proposed
awareness interpretation of ‘involuntary separation’” under 5 U.S.C.
§ 8414(b)(1)(A), which is contained in Handbook § 44A2.1-8A); see also Warren
v. Department of Transportation, 116 M.S.P.R. 554, ¶ 7 n.2 (2011) (OPM’s
Handbook is only entitled to deference in proportion to its “power to persuade”),
aff’d, 493 F. App’x 105 (Fed. Cir. 2013). Upon reading OPM’s general rule, and
its exceptions, we believe OPM’s rule is designed to discourage an employee
14
who, because of some desire to secure a term position, chooses to leave career
employment in order to be eligible for a term appointment and then applies for a
DSR annuity upon the expiration of that appointment. Under these
circumstances, OPM’s rule would appear to prohibit the employee from being
eligible for a DSR annuity. 3 See Handbook, § 44A2.1-8A. Those facts, however,
are not the facts of this case.
¶24 Next, we find OPM’s argument that the Board overlooked the “exception to
the exception” clause, unavailing. See RF, Tab 4 at 12, 18-19; Handbook,
§ 44A.2.1-8B (“[I]f the short-term employment was arranged solely to create title
to an annuity, the separation is not considered qualifying for discontinued service
retirement.”). Although not specifically addressed in our prior decision, we find
that this provision of OPM’s Handbook essentially incorporates the rule which
OPM petitions us to endorse in our decision in this matter. For the reasons
discussed here, and in our prior decision, we decline to recognize that either
OPM, or the Board, should undertake a merits-based review of why an agency
may have appointed an employee to a term position after the employee serves in
that position and objectively qualifies for a DSR annuity under 5 U.S.C.
§ 8414(b)(1)(A). See Eller, 121 M.S.P.R. 17, ¶ 9 & n.5.
¶25 Upon consideration of OPM’s petition for reconsideration, however, we
acknowledge that, although we stated in our prior decision that the appellant’s
service in his term position immediately followed his separation from
employment under chapter 43, see Eller, 121 M.S.P.R. 17, ¶¶ 2, 13, OPM is
correct that the settlement agreement, which was signed in June 2005,
retroactively placed the appellant in his term position effective January 11, 2005,
3
We express no further opinion whether this interpretation of OPM’s general rule, if
correct, would be entitled to any degree of deference or whether such an applicant
would be entitled to a DSR annuity under such facts.
15
see RF, Tab 4 at 18-19; IAF, Tab 6 at 24-25, 32-36. As explained below, we find
that this clarification does not change the outcome of this matter.
¶26 First, under the facts of this case, where the appellant actually served
almost the entire duration of his term position, we cannot conclude that the
appellant’s entitlement to a DSR annuity is called into question. The difference
between the facts of this case and Parker reinforces our finding. Here, the
appellant and the Department of the Interior entered into a settlement which
returned the appellant to actual employment with the agency for over 4 and a half
years, at the end of which the appellant objectively satisfied the statutory criteria
for a DSR annuity. Eller, 121 M.S.P.R. 17, ¶ 3. In doing so, we recognize that
5 months of the appellant’s term position were not actually served, and that this
quantum of federal service only exists on paper. By contrast, however, the
parties in Parker entered into a settlement agreement stipulating that the
appellant was appointed to a civilian position for no other purpose than to give
the appearance that he had the civilian service necessary for him to receive a
CSRS annuity. 93 M.S.P.R. 529, ¶ 20. Thus, we believe that the totality of the
settlement in this case was not an artifice designed to evade the statutory
requirements of a DSR annuity akin to the agreement in Parker.
¶27 Second, in making this finding, we do not endeavor to decide how much
time an employee must actually serve in a term position in order to qualify for a
DSR annuity under similar facts. See Eller, 121 M.S.P.R. 17, ¶¶ 8-9;
Parker, 93 M.S.P.R. 529, ¶¶ 18, 20-21. We only decide that, under these facts,
where the appellant actually served over 4 and a half years in the term position,
he is entitled to receive the DSR annuity which he was originally denied. Even if
the brief period of time the appellant did not actually serve in the term
appointment was deducted from his overall length of service, cf. Parker, 93
M.S.P.R. 529, ¶¶ 20-21, he would still objectively qualify for a DSR annuity
under 5 U.S.C. § 8414(b)(1)(A) based on his length of service and age at the time
of the expiration of his appointment in February 2010, see IAF, Tab 6 at 44. We
16
find, however, that our factual clarification does not compel a different result in
this case, and we accordingly MODIFY our prior decision to reflect that the
appellant actually served in the term position for almost the entire period of time
he was placed therein. 4 See Eller, 121 M.S.P.R. 17, ¶¶ 3, 13.
¶28 Finally, we have considered OPM’s policy arguments that the Board’s
decision, if allowed to stand, would not only incentivize agencies to use similar
settlement agreements in the future, but also would give “a pass [to employees
whose performance is judged unacceptable] on having to meet the criteria for
entitlement to an annuity under CSRS or FERS.” RF, Tab 4 at 30. We
respectfully disagree with the pernicious effects OPM believes our prior decision
will bear. At bottom, we believe OPM’s focus on the reasoning behind an
agency’s decision to reemploy an employee or to enter into a settlement
agreement providing for a specific type of employment arrangement is misplaced
in the retirement annuity arena. As the Board originally recognized in Jordan,
the settlement of disputes brought before the Board promotes both public and
explicit congressional policy, and we believe that OPM’s position in this matter,
if adopted, could cause agencies and employees to avoid settlements which return
employees to duty for fear that years later OPM might deny an employee’s
application for retirement benefits because OPM believes that the employee
should not have been returned to federal service. 5 See Jordan, 77 M.S.P.R.
4
This issue was not raised until the Director filed her petition for reconsideration, see
RF, Tab 4 at 19, and we had no occasion to specifically examine the period of time
between the appellant’s removal and the effective date of the settlement agreement
returning him to duty in our prior decision, see generally, Petition for Review File,
Tab 1.
5
Such a scenario, moreover, could lead an employee to file a petition for enforcement
with the Board on the theory that he has not received the full benefit of the agreement
into which he entered, thus leading to the possibility of additional Board proceedings.
See, e.g., Vance v. Department of the Interior, 114 M.S.P.R. 679, ¶ 16 (2010) (outlining
the possibilities if there is a material breach of a settlement agreement, including
reinstating the appeal).
17
at 615-16. OPM, moreover, provides no guidance as to how it would proceed to
implement its suggested authority to retroactively evaluate the substance of an
employee’s federal service for the purpose of determining an applicant’s
eligibility to receive a DSR annuity, and we believe OPM’s current processes and
protocols are ill-designed to handle such adjudication. See Eller, 121 M.S.P.R.
17, ¶ 9 & n.4 (citing and discussing Nebblett v. Office of Personnel
Management, 237 F.3d 1353, 1358 (Fed. Cir. 2001), in which the Federal Circuit
agreed with OPM that OPM does not have the protocols in place to determine
whether an employee’s retirement was coerced by unlawful agency action and
thus was involuntary for the purposes of a DSR annuity under the CSRS).
¶29 We similarly believe that our prior decision does not reward employees
whose performance has been found unacceptable under chapter 43. As we have
explained, under the facts of this case, where the appellant actually served in a
position of employment with the agency and otherwise objectively satisfies the
statutory criteria for receiving a DSR annuity, the employee, by statute, has
earned an entitlement to a DSR annuity. Eller, 121 M.S.P.R. 17, ¶ 9 n.5;
see 5 U.S.C. § 8414(b)(1)(A). Although OPM may disagree with an agency’s
decision to reemploy a specific employee, the agency as an employer is vested
with the authority to make that decision, and OPM should not collaterally
undermine that decision through its administration of the federal employee
retirement system.
ORDER
¶30 The Board’s prior decision finding the appellant is entitled to receive a
DSR annuity under 5 U.S.C. § 8414(b)(1)(A) is accordingly AFFIRMED AS
MODIFIED. This, combined with our prior decision, Eller v. Office of Personnel
Management, 121 M.S.P.R. 17 (2014), constitutes the final decision of the Merit
Systems Protection Board in this appeal. Title 5 of the Code of Federal
Regulations, section 1201.113(c) (5 C.F.R. § 1201.113(c)).
18
NOTICE TO THE APPELLANT
REGARDING YOUR RIGHT TO REQUEST
ATTORNEY FEES AND COSTS
You may be entitled to be paid by the agency for your reasonable attorney
fees and costs. To be paid, you must meet the requirements set out at Title 5 of
the United States Code (U.S.C.), sections 7701(g), 1221(g), 1214(g) or 3330c(b);
or 38 U.S.C. § 4324(c)(4). The regulations may be found at 5 C.F.R.
§§ 1201.201, 1201.202, and 1201.203. If you believe you meet these
requirements, you must file a motion for attorney fees WITHIN 60 CALENDAR
DAYS OF THE DATE OF THIS DECISION. You must file your attorney fees
motion with the office that issued the initial decision on your appeal.
NOTICE TO THE APPELLANT REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request review of this final decision by the United
States 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
19
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 your court
appeal, you may visit our website at http://www.mspb.gov/probono for a list of
attorneys who have expressed interest in providing pro bono representation for
Merit Systems Protection Board appellants before the court. 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:
______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.