Federal Education Association, Inc. v. United States

In the United States Court of Federal Claims
No. 14-331C
(Filed: April 28, 2015)
)
FEDERAL EDUCATION )
ASSOCIATION, INC., et al., )
)
Plaintiffs, ) Pay Freeze Act; Overseas Teachers
) Pay and Personnel Practices Act;
v. ) Application of Pay Freeze Act after
) expiration; Skidmore deference
THE UNITED STATES, )
)
Defendant. )
)
Richard J. Hirn, Washington, DC, for plaintiffs.
Phyllis Jo Baunach, Civil Division, United States Department of Justice,
Washington, DC, with whom were Joyce R. Branda, Acting Assistant Attorney General,
Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, and Reginald T.
Blades, Jr., Assistant Director. Kristine T. Bourgos, Associate General Counsel, Labor
and Employee Relations Attorney Advisor, Alexandria, VA, of counsel.
OPINION
FIRESTONE, Judge.
This case arises from the pay freeze for teachers in overseas Department of
Defense Educational Activity (“DoDEA”) schools, imposed by Congress as part of an
overall freeze of salaries for Federal employees from 2011 to 2013. Pending before the
court are the Federal Education Association, Inc.’s (“FEA”) motion for summary
judgment and defendant the United States’s (“the government”) motion for summary
1
judgment.1 Plaintiffs allege that the United States Office of Personnel Management
(“OPM”) erred by determining that the Pay Freeze Act (“PFA”), passed by Congress as
part of the Continuing Appropriations and Surface Transportation Extensions Act of
2011, applied to overseas teachers whose pay is set pursuant to the Overseas Teachers
Pay and Personnel Practices Act (“OTPPPA”), 20 U.S.C. §§ 901-907. Plaintiffs argue
that the OTPPPA is not among the statutes covered by the PFA and that, even if they
were covered, the government erred by extending a freeze of their pay beyond the
deadline set by the statute. The government argues that Congress sought to apply the
PFA broadly and that the President, through OPM, properly included overseas teachers in
the pay freeze. The government further argues that DoDEA’s application of the pay
freeze for overseas teachers beyond the pay freeze deadline was lawful in that the
teachers were only subject to a pay freeze for 3 years, the same length of freeze as all
other affected employees. The extension of a pay freeze beyond the statutory deadline,
the government argues, was necessary given the timing of the school year relative to the
pay freeze period. For the reasons that follow, the court agrees with the government that
overseas teachers were subject to the pay freeze, but finds that the government erred in
applying the pay freeze beyond the statutory period.
I. BACKGROUND
1
Because the parties have submitted, and the court has considered, evidence outside of the
pleadings, the court shall not address the government’s motion to dismiss and deals solely with
the parties’ motions for summary judgment. See Rule 12(d) of the Rules of the United States
Court of Federal Claims.
2
A. Pay Rates for Overseas DoDEA Teachers
Salaries for overseas teachers employed by DoDEA are set by 20 U.S.C. § 903,
which states:
The Secretary of Defense shall fix the basic compensation for teachers and
teaching positions in the Department of Defense at rates equal to the
average of the range of rates of basic compensation for similar positions of
a comparable level of duties and responsibilities in urban school
jurisdictions in the United States of 100,000 or more population.
20 U.S.C. § 903.
The Secretary of Defense is given the authority to determine how to maintain the
pay parity required by the OTPPPA. 20 U.S.C. § 902(a)(2).2 Initially, the Secretary
collected data from representative districts for a school year, and then used that data to set
a rate of pay for the following school year. This procedure was challenged following a
1966 amendment on the grounds that this practice allowed salaries to lag behind those
districts. March v. United States, 506 F.2d 1306, 1315 (D.C. Cir. 1974). The court
2
The statute states:
(a) Not later than the ninetieth day following July 17, 1959, the Secretary of Defense shall
prescribe and issue regulations to carry out the purposes of this chapter. Such regulations
shall govern—
....
(2) the fixing of basic compensation for teachers and teaching positions at rates equal to
the average of the range of rates of basic compensation for similar positions of a
comparable level of duties and responsibilities in urban school jurisdictions in the
United States of 100,000 or more population.
20 U.S.C. § 902(a).
3
agreed and the pay adjustments are now made retroactive to the beginning of the school
year.3
During the time period at issue in this case, the DOD set teacher salaries by
surveying urban school districts populations of 100,000 or more. Hritz Decl. ¶ 3; Terhaar
Decl. ¶ 8. Until 2013, this included 231 school districts. Id. This number was
recalculated following the 2010 census and expanded to 267 school districts. Id. The
survey process occurs between November and January, after which DOD sets a pay rate
for each category of DoDEA employee: teachers, guidance counselors, speech
pathologists, and school psychologists. Hritz Decl. ¶ 4; Terhaar Decl. ¶ 9. These rates
are then shared with the FEA, corrected if necessary, and published. Hritz Decl. ¶¶ 5-8;
Terhaar Decl. ¶ 9. The effective date of the pay adjustment is August 1 of the previous
year. Terhaar Decl. ¶ 9.
B. The Pay Freeze
In December 2010, as part of the Continuing Appropriations and Surface
Transportation Extension Act, Pub. L. No. 111-322, Congress passed the PFA, which
prevented increases in salary for certain federal employees. The Act provided, in
relevant part:
(a)(1) the term ‘employee’--
(A) means an employee as defined in section 2105 of title 5, United
States Code; and
3
According to the plaintiffs, this retroactive adjustment is carried out through a lump sum
payment.
4
(B) includes an individual to whom subsection (b), (c), or (f) of such
section 2105 pertains (whether or not such individual satisfies
subparagraph (A));
....
(b)(1) Notwithstanding any other provision of law, except as provided in
subsection (e), no statutory pay adjustment which (but for this subsection)
would otherwise take effect during the period beginning on January 1,
2011, and ending on December 31, 2012, shall be made.
(2) For purposes of this subsection, the term ‘statutory pay adjustment’
means--
(A) an adjustment required under section 5303, 5304, 5304a, 5318,
or 5343(a) of title 5, United States Code; and
(B) any similar adjustment, required by statute, with respect to
employees in an Executive agency.
(c) Notwithstanding any other provision of law, except as provided in
subsection (e), during the period beginning on January 1, 2011, and ending
on December 31, 2012, no senior executive or senior-level employee may
receive an increase in his or her rate of basic pay absent a change of
position that results in a substantial increase in responsibility, or a
promotion.
(d) The President may issue guidance that Executive agencies shall apply in
the implementation of this section.
(e) The Non-Foreign Area Retirement Equity Assurance Act of 2009 (5
U.S.C. 5304 note) shall be applied using the appropriate locality-based
comparability payments established by the President as the applicable
comparability payments in section 1914(2) and (3) of such Act.
Pub. L. No. 111-322 § 147, 124 Stat. 3518. Thus, the Act explicitly froze increases
pursuant to 5 U.S.C. §§ 5303, 5304, 5304a, 5318, and 5343(a), which together govern
wage increases pursuant to the General Schedule. In addition, it froze “any similar
adjustment, required by statute, with respect to employees in an Executive agency.”
5
The PFA also provided that the President may issue guidance that Executive
Agencies shall apply in the implementation of the act. The President delegated that
responsibility to OPM in a memorandum issued on December 22, 2010, in which the
President stated:
While this legislation will prevent adjustments in executive branch pay
schedules that are made by statute, some laws allow such adjustments to be
made by agency heads as an exercise of administrative discretion. In order
to ensure consistent treatment of executive branch employees and to
promote the fiscal purposes of my original proposal, agency heads who
have such discretion should not provide any upward adjustments in Federal
employees’ pay schedules or rates during the two-year period covered by
the statutory pay freeze.
The Director of [OPM] shall issue guidance on implementing this
memorandum, and is hereby authorized and directed to publish this
memorandum in the Federal Register.
Accordingly, you should suspend any increases to any pay systems or pay
schedules covering executive branch employees that could otherwise take
effect as a result of an exercise of administrative discretion during the
period beginning on January 1, 2011, and ending on December 31, 2012.
You also should forgo any general increases (including general increases
for a geographic area, such as locality pay) in covered employees’ rates of
pay that could otherwise take effect as a result of the exercise of
administrative discretion during the same period. To the extent that an
agency pay system provides performance-based increases in lieu of general
increases, funds allocated for those performance-based increases should be
correspondingly reduced to reflect the freezing of the employees’ base pay
schedule.
Memorandum for the Heads of Executive Departments and Agencies, 75 Fed. Reg.
81829 (Dec. 22, 2010). On December 30, 2010, the Director of OPM issued the guidance
requested by the President. In a memorandum, OPM stated:
Covered Employees
6
The pay freeze is expected to apply to approximately 2 million Federal
civilian employees in the Executive branch. Employees of the United
States Postal Service and the Postal Regulatory Commission are not
covered, nor are members of the uniformed services (as defined in 37
U.S.C. 101(3), i.e., Army, Navy, Air Force, Marine Corps, Coast Guard,
National Oceanic and Atmospheric Administration, and Public Health
Service). Covered employees include employees under the General
Schedule, Executive Schedule, Senior Executive Service (SES), Senior
Foreign Service (SFS), senior-level and scientific and professional (SL/ST),
prevailing rate, and other Executive branch pay systems and schedules.
Additional information on employees covered by the pay freeze is provided
in Attachment 3.
Covered Pay Adjustments
The pay freeze statute prohibits “statutory pay adjustments” for Federal
civilian employees that would otherwise take effect in 2011 and 2012.
These statutory pay adjustments include across-the-board adjustments
under 5 U.S.C. 5303, locality pay adjustments under 5 U.S.C. 5304 or
5304a, Executive Schedule adjustments under 5 U.S.C. 5318, prevailing
rate adjustments under 5 U.S.C. 5343(a), and any similar pay adjustments
required by statute with respect to covered employees in an Executive
agency. In addition, the statute prohibits certain additional pay adjustments
for SES, SFS, SL/ST, and other senior executive and senior-level
employees. The Presidential memorandum further states that agencies
should forgo similar pay system and pay schedule adjustments and general
increases that could otherwise be granted by an agency to employees
through administrative discretion. Additional information on pay
adjustments covered by the pay freeze is provided in Attachment 3.
Pay Freeze Exclusions
Given the breadth of the statute and the Presidential memorandum, virtually
all pay system and pay schedule adjustments and general increases for
covered civilian employees in Executive branch agencies should be covered
by the pay freeze. Pay adjustments not covered by the freeze include
promotion increases, within-grade step increases, and other similar
individually-based pay increases. (See Attachment 3 for additional
guidance on exclusions.)
....
Effective Date
7
The statute and Presidential memorandum cover pay adjustments that
would otherwise take effect during the period beginning on January 1,
2011, and ending on December 31, 2012.
Memorandum for Heads of Executive Departments and Agencies, available at
http://www.chcoc.gov/transmittals/TransmittalDetails.aspx?TransmittalID=3384 (last
visited April 28, 2015). OPM further elaborated on which adjustments fall within the PFA
in an attachment to the memo, stating:
An adjustment is considered to be “required by statute” if a law mandates
that a given type of adjustment be made (including a determination to
provide a zero adjustment) based on the existence of specific conditions.
This does not mean that a law must specify the exact amount of the
adjustment. Both General Schedule across-the-board increases and locality
pay increases are required by statute based on specific conditions, but the
governing laws leave room for determining the amount of the adjustment
and allow for the determination of a zero increase. Other pay systems may
be governed by similar laws.
Memorandum for Heads of Executive Departments and Agencies, Attachment 3, available
at http://archive.opm.gov/oca/compmemo/2010/2011freeze_attach3.pdf (last visited April
28, 2015). Similarly, the Secretary of Defense issued a memorandum stating that no pay
adjustment would be made. Memorandum for Secretaries of The Military Departments,
Def.’s App’x 44.
In January 2011, DoDEA contacted OPM by email for guidance regarding the
application of the PFA to overseas teachers. OPM replied with a determination that the
pay adjustment for the 2010-2011 school year, which would be finalized in 2011 but had
an effective date of August 1, 2010, would not be affected by the PFA. Def.’s App’x 22.
However, OPM determined that the following years’ pay adjustments would be frozen by
8
the PFA, lasting until August 2013. Id.4 Despite the freeze, OPM instructed DoDEA to
continue to perform wage surveys. Id. at 42-43.
In 2013, Congress extended the pay freeze for another year as part of the
Consolidated and Further Continuing Appropriations Act, Pub. L. 113-6. Id. at 46-47. On
April 5, 2013, as before, the President issued a memorandum directing OPM to issue
guidance. Id. at 47-48. The Director of OPM issued the requested guidance on that same
day. Id. This guidance reaffirmed OPM’s initial guidance.
Plaintiffs filed this case on April 22, 2014, and moved for summary judgment on
June 13, 2014. The government filed its motion on October 27, 2014. Briefing is complete
and oral argument was held on April 23, 2015.
II. STANDARD OF REVIEW
Both parties have moved for summary judgment under Rule 56 of the Rules of the
United States Court of Federal Claims (“RCFC”). Under RCFC 56, summary judgment is
appropriate “if the movant shows that there is no genuine dispute as to any material fact
4
In the email providing guidance, OPM stated:
We have determined that the pay freeze does not apply to pay increases for these
teachers that take effect in August 2010, since those increases are required to take
effect prior to the pay freeze period.
However, those teachers may not receive schedule increases during the 2011-
2012 pay freeze period. Thus, the August 2011 and August 2012 increases would
be blocked. We believe it would be appropriate as a matter of policy for pay
increases to be blocked until August 2013 so that these teachers are subject to a
full 2-year freeze.
Def.’s App’x 22, Email from Jerry Mikowicz, Deputy Associate Director, Pay and Leave, OPM,
to Darryl E. Roberts (Feb. 14, 2011, 11:09 EST).
9
and the movant is entitled to judgment as a matter of law.” RCFC 56(a). The court’s task
is to determine whether there exists a genuine issue of material fact for trial, and not “to
weigh the evidence and determine the truth of the matter . . . .” Anderson v. Liberty Lobby,
477 U.S. 242, 249 (1986). As it does for all Rule 56 motions, the court views the evidence
in a light most favorable to the nonmoving party, drawing reasonable inferences in its
favor. See Schooner Harbor Ventures, Inc. v. United States, 569 F.3d 1359, 1362 (Fed.
Cir. 2009); Galvin v. Eli Lilly & Co., 488 F.3d 1026, 1031 (D.C. Cir. 2007). If the court
finds that a rational trier of fact could not find for the nonmoving party, then there is no
genuine issue for trial and the movant is entitled to summary judgment. Ricci v. DeStefano,
557 U.S. 557, 586 (2009) (quoting Matsushita Elec. Industr. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986)).
III. DISCUSSION
A. OPM Properly Determined That Agencies Should Apply the PFA
Broadly To Include Salaries Set Under the OTPPPA
According to plaintiffs, the PFA was not sufficiently broad to override the
OTPPPA. Plaintiffs argue that the PFA specifically lists several statutes, not including
the OTPPPA, and that the OTPPPA is not sufficiently “similar” to those statutes to have
been included within the ambit of the PFA. Plaintiffs contend that the statutes identified
in the PFA all include some element of administrative discretion in granting a pay
increase, while the OTPPPA’s use of the word “shall” creates a mandatory duty that
places it outside the PFA. In support of this contention, plaintiffs argue that there is a
presumption that appropriations acts do not change substantive law, citing Building and
10
Construction Trades Dep’t, AFL-CIO v. Martin, 961 F.2d 269, 273 (D.C. Cir. 1992), and
that clause 3(f)(i) of the Rules of the House of Representatives for the 111th Congress
require that any new legislation must specifically identify the existing statutes that it
changes. Plaintiffs argue that Congress’s actions are still meaningful with the reading
they propose and have identified several pay statutes that plaintiffs believe would still fall
within the PFA’s ambit under this interpretation, including 5 U.S.C. § 5348, which covers
Federal mariners, and 5 U.S.C. § 5349, which covers employees of the Government
Printing Office and the Bureau of Engraving and Printing.
In addition to their statutory argument, plaintiffs also argue in their brief that
OPM’s decision to include teachers covered by the OTPPPA within the pay freeze should
not be given any deference because it was not done through a formal rulemaking, citing
Chevron, U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 843-44 (1984).
To the extent that deference is also available to OPM under Skidmore v. Swift & Co.,
323 U.S. 134 (1944), plaintiffs argue that any ambiguity must be resolved in favor of
plaintiffs. Plaintiffs further note that the domestic teachers in DoDEA schools5 received
pay increases, and argue that it would be paradoxical for overseas teachers to be treated
differently from their domestic counterparts. While plaintiffs recognize that pay increases
for domestic teachers are covered by a collective-bargaining agreement (“CBA”),
plaintiffs argue that nothing in the PFA exempts CBAs from the pay freeze. In this
5
Domestic teachers in DoDEA schools are not the domestic teachers referred to in the OTPPPA,
but rather DoDEA teachers at schools in the United States. As discussed below, infra note 9,
their pay statutes operate independently.
11
connection, plaintiffs argue that OTPPPA was passed to ensure that overseas teachers
received pay parity with their domestic counterparts, and that nothing in the PFA
indicates an intention to undermine Congress’s prior specifically-stated intentions.
In response, the government argues that Congress clearly stated an intention for
the PFA to apply as broadly as possible. According to the government, because Congress
has the authority to pass pay freezes, the question in this case is one of whether they
intended to include teachers covered by the OTPPPA rather than whether Congress had
the authority to freeze their wages. The government argues that the plain language of the
PFA supports a finding that the pay freeze was to be applied to all executive branch
employees unless expressly exempted, and overseas teachers—covered by the OTPPPA
as executive branch employees—were subject to statutory pay adjustments and therefore
covered by the PFA. Specifically, the government contends that the language in §
147(b)(2) specifying that the PFA shall apply “notwithstanding” other provisions of law
makes the broad scope of the PFA clear, as it expressly disallows statutory pay increases
during the specified period. The government further contends that the language in the
PFA regarding any statute that provides for a “similar” adjustment further demonstrates
the broad scope of the PFA.
To the extent that the PFA was ambiguous with regard to scope, the government
argues that Congress explicitly delegated interpretative authority to the President to find
“similar” statutes and to apply the pay freeze to those executive branch employees. In
this connection, the government also argues that OPM’s interpretation of the PFA on
behalf of the President is entitled to deference as an agency interpretation under
12
Skidmore, stating that it is appropriate in light of OPM’s expertise, authorized by the
statute, and a reasonable interpretation. The government further argues that plaintiffs’
arguments regarding pay parity with domestic DoDEA teachers must be rejected because
domestic teachers are covered by a CBA and are therefore treated differently under the
PFA.
The court agrees with the government that the plaintiffs were covered by the PFA
and thus subject to the pay freeze. As an initial matter, the court agrees with the
government that it must give deference to OPM’s guidance under Skidmore. In
Skidmore, the Supreme Court created a standard deferring to the experience and
judgment of administrators, stating:
We consider that the rulings, interpretations and opinions of the
Administrator under this Act, while not controlling upon the courts by
reason of their authority, do constitute a body of experience and informed
judgment to which courts and litigants may properly resort for guidance.
The weight of such a judgment in a particular case will depend upon the
thoroughness evident in its consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all those factors
which give it power to persuade, if lacking power to control.
Skidmore, 323 U.S. at 140. The Supreme Court has reaffirmed that Skidmore deference
is still available post-Chevron. United States v. Mead Corp., 533 U.S. 218, 234 (2001)
(“Chevron did nothing to eliminate Skidmore’s holding that an agency’s interpretation
may merit some deference whatever its form . . . .” (citations omitted)). The court finds
that the term “similar” is not self-defining, leaving the specific classification of pay
13
adjustment statutes as falling within the PFA to OPM.6 Without a definition by
Congress, the similarity of two pay statutes is necessarily subjective, making such a
determination an appropriate task for an agency that is entitled to deference.7 The court
further agrees with the government that Congress’s explicit delegation of decision-
making authority to OPM entitles the agency’s guidance proferred pursuant to that
authority to receive deference.
In accordance with the deference afforded to OPM, the court finds OPM’s
interpretation of the PFA is persuasive. Under the PFA, a statutory pay adjustment is
defined as either “an adjustment required under section 5303, 5304, 5304a, 5318, or
5343(a) of title 5, United States Code” or “any similar adjustment, required by statute,
with respect to employees in an Executive agency.” Pub. L. No. 111-322 § 147(b), 124
Stat. 3518. The five enumerated statutes all deal with adjustments to employees covered
by the pay comparability system (including the General Schedule) and the prevailing rate
system. See 5 U.S.C. §§ 5303, 5304, 5304a, 5318, 5343(a). As long as the OTPPPA
6
Plaintiffs argue that any ambiguity in the statute requires a finding in favor of plaintiffs, as
appropriations statutes are required by Congressional rules to state the statutes to be affected
with specificity. However, the court finds this argument unpersuasive. See infra, note 10.
7
Plaintiffs argue that the guidance offered by OPM lacks the indicia of careful consideration
required to receive deference, citing Cathedral Candle Co. v. U.S. Int’l Trade Comm’n, 400 F.3d
1352 (Fed. Cir. 2005). The government relies on the same case to argue that OPM is the agency
with the expertise most germane to the issue of pay freezes on pay adjustments and thus must be
given deference. In that case, the Federal Circuit described Skidmore not as a threshold test but
as a standard that “requires courts to give some deference to informal agency interpretations of
ambiguous statutory dictates, with the degree of deference depending on the circumstances.”
Cathedral Candle, 400 F.3d at 1365. Under this approach, the court finds that OPM’s guidance
is entitled to deference because OPM is the agency with relevant expertise.
14
reasonably fits the description in § 147(b)(2) of a statute providing a “similar
adjustment,” teachers paid in accordance with the OTPPPA were covered by the pay
freeze. Regarding such adjustments, OPM stated:
An adjustment is considered to be “required by statute” if a law mandates
that a given type of adjustment be made (including a determination to
provide a zero adjustment) based on the existence of specific conditions.
This does not mean that a law must specify the exact amount of the
adjustment. Both General Schedule across-the-board increases and locality
pay increases are required by statute based on specific conditions, but the
governing laws leave room for determining the amount of the adjustment
and allow for the determination of a zero increase. Other pay systems may
be governed by similar laws.
Memorandum for Heads of Executive Departments and Agencies, Attachment 3,
available at http://archive.opm.gov/oca/compmemo/2010/2011freeze_attach3.pdf (last
visited April 28, 2015). Regarding the DoDEA overseas teachers specifically, OPM
stated, in response to an inquiry from DoDEA:
We have reviewed the issues and consulted with OMB. We have
determined that the pay freeze does not apply to pay increases for these
teachers that take effect in August 2010, since those increases are required
to take effect prior to the pay freeze period.
However, these teachers may not receive pay schedule increases during the
2011-2012 pay freeze period. Thus, the August 2011 and August 2012
increases would be blocked. We believe it would be appropriate as a matter
of policy for pay increases to be blocked until August 2013 so that these
teachers are subject to a full 2-year freeze.
Def.’s App’x 22, Email from Jerry Mikowicz, Deputy Associate Director, Pay and Leave,
OPM, to Darryl E. Roberts (Feb. 14, 2011, 11:09 EST) (“Mikowicz Email”).
Plaintiffs argue that the OTPPPA is not “similar” because it does not provide for a
statutory pay adjustment, but rather requires that teacher pay be set to maintain parity
15
with domestic school districts of more than 100,000 population. Plaintiffs further argue
that, whereas the five identified statutes all contain some discretionary element that
permits the President to forgo a pay adjustment, the OTPPPA establishes a mandatory
pay increase if the DoDEA evaluation establishes that one is required. In support of their
position, plaintiffs point to the statutes used to set wages for Federal mariners, 5 U.S.C. §
5348, and for employees of the Government Printing Office and Bureau of Engraving and
Printing, id. at § 5349, as examples of statutes that would be considered “similar” to the
five identified in the PFA. Plaintiffs state that these pay statutes are more similar,
procedurally, to those in the PFA than the OTPPPA is, showing that a narrower
interpretation of the statute is possible.
The government argues that plaintiffs’ interpretation of § 147(b)(2) is overly
narrow. The government contends that a “similar” provision need not be one that
functions in the same precise procedural manner as the five identified statutes, but can
instead refer to statutes that control pay adjustments in general, which do not mandate a
pre-determined pay increase but rather contemplate that pay may be increased if an
evaluation determined that one is required. The government, relying on Cisneros v.
Alpine Ridge Group, 508 U.S. 10 (1993), argues that Congress’s use of the phrase
“notwithstanding any other provision of law” evinces an intent by Congress to include all
but the expressly exempted Federal employees from coverage under the provision.
According to the government, the OTPPPA falls within the ambit of the PFA as a
“similar” statute because the OTPPPA is a pay setting statute.
16
Based on the plain text of the PFA, the court finds that OPM’s conclusion that the
OTPPPA falls within the ambit of the PFA is both supported and persuasive. First, there
is nothing in the PFA that limits “similar” pay adjustment statutes to those that implement
pay adjustments by the same procedures as the identified statutes, and nothing that limits
“similar” statutes to those that provide discretion to the President.8 Instead, the PFA
refers to “any similar adjustment, required by statute, with respect to employees in an
Executive agency.” Thus, Congress specified two criteria for determining similarity: (1)
the adjustment applies to employees of the executive branch, and (2) the adjustment is
made following a statutory process that may or may not result in a pay increase. The first
element is undisputed in this case, and the “required by statute” element does not appear
to be disputed, either. In such circumstances, the court finds that OPM’s guidance is
consistent with the PFA and is entitled to deference.9 While the plaintiffs may have
8
Plaintiffs argue that the statutes set forth in the PFA all contain a discretionary element, while
the OTPPPA requires that an adjustment be made. However, nothing in the OTPPPA requires an
annual adjustment to have a non-zero value, and no increase is guaranteed. If the wage survey
were to find that pay had held constant in the representative districts or had declined, the
language of OTPPPA requires a zero or negative adjustment, respectively. As a result, the court
finds that the mandatory aspect of OTPPPA does not distinguish it, in the context of the PFA,
from statutes in which the President may choose to impose a zero increase. See Memorandum
for Heads of Executive Departments and Agencies, Attachment 3, available at
http://archive.opm.gov/oca/compmemo/2010/2011freeze_attach3.pdf (last visited April 28,
2015) (“An adjustment is considered to be ‘required by statute’ if a law mandates that a given
type of adjustment be made (including a determination to provide a zero adjustment) based on
the existence of specific conditions. This does not mean that a law must specify the exact
amount of the adjustment.”).
9
Plaintiffs argue that it would be unfair for domestic DoDEA teachers to receive pay
adjustments while overseas teachers are subject to a pay freeze. However, the salaries of
domestic teachers are set pursuant to a separate statute, 10 U.S.C. § 2164, which does not
reference overseas teachers. Further, OPM properly determined that the pay freeze did not apply
to domestic teachers because it could not alter the CBA that covers those teachers. Accordingly,
17
preferred a different reading of the PFA, OPM’s reading is consistent with the PFA and
Congressional intent and will be upheld.10
Accordingly, the court finds that the government is entitled to summary judgment
on plaintiff’s claims regarding the application of the PFA to overseas teachers.
B. DoDEA Erred in Applying the Pay Freeze After December 31, 2013
Regardless of whether teachers paid under the OTPPPA are subject to a pay freeze
under the PFA, plaintiffs argue that the decision to apply the PFA past December 31,
2013 was contrary to law. Specifically, plaintiffs argue that, because the PFA stated that
“no statutory pay adjustment which would otherwise take effect during the period
beginning on January 1, 2011 and ending on December 31, [2013], shall be made,”
DoDEA’s adjustment of pay rates for the 2013-2014 school year, which was determined
in April 2014 and called for an increase under the process described above, should have
the pay of domestic teachers and the application of the PFA to that pay is entirely distinguishable
from that of the overseas teachers at issue here.
10
Plaintiffs’ arguments regarding Congress’ failure to abide by House of Representative rules
and the general presumption that appropriations acts do not alter substantive legislation is
without merit. While “repeals by implication are not favored, . . . with especial force when the
provision advanced as the repealing measure was enacted in an appropriations bill,” Congress is
authorized to do so when it clearly expresses its intention. United States v. Will, 449 U.S. 200,
221-22 (1980) (citations omitted). Indeed, the Supreme Court found in Will—in circumstances
similarly involving pay increases—that “Congress intended to repeal or postpone previously
authorized [salary] increases” where it stated that the increase “‘shall not take effect.’” Id. at 222
(citing Pub. L. 95-66, 91 Stat. 270). Such language appears in the PFA. Additionally, because
Congress expressly included “similar” statutes, the fact that it did not specifically refer to the
OTPPPA is irrelevant. Further, because the PFA applied “notwithstanding” the OTPPPA,
plaintiffs’ arguments regarding legislative history of the OTPPPA are also irrelevant. E.g.
Conyers v. Merit Systems Protection Board, 388 F.3d 1380, 1382-83 (2004), reh’g and reh’g en
banc denied (2004) (“The language ‘[n]otwithstanding any other provision of law’ signals that
this . . . provision is to override more general conflicting statutory provisions to the extent that
they would apply . . . .” (quoting Cisneros, 508 U.S. at 18)).
18
been paid following the expiration of the PFA pay freeze on December 31, 2013. In
response, the government argues that, because OPM determined that the pay rates for the
2010-2011 would not be covered by the PFA because the beginning of the pay freeze fell
in the middle of the school year, it was necessary for DoDEA to stagger the end of the
pay freeze to achieve the requirements of the PFA which was intended to cover three full
years.
The court finds that the decision to apply the pay freeze for overseas teachers after
the period set by law was improper. As OPM stated in its initial guidance,
The pay freeze for all covered employees and pay adjustments described
below is in effect for the period beginning on January 1, 2011, and ending
on December 31, [2013]. The freeze applies to covered adjustments that
would otherwise take effect during this period.
Memorandum for Heads of Executive Departments and Agencies, Attachment 3,
available at http://archive.opm.gov/oca/compmemo/2010/2011freeze_attach3.pdf (last
visited April 28, 2015). Thus, OPM’s guidance indicates that the freeze was effective
only during the calendar years of 2011, 2012, and—following the extension—2013.
Nothing in the statute requires a pay freeze to last a full 3 years; instead, the PFA sets a
time period during which the freeze is effective. As there is no statutory requirement
under the OTPPPA that DoDEA salary adjustments may only “take effect” in August, the
pay freeze only prevented an adjustment from taking effect until the freeze expired on
December 31, 2013. Congress explicitly limited the period of the freeze, and continuing
the freeze beyond the dates provided by law is inconsistent with the plain language of the
PFA. While OPM stated in its later guidance to DoDEA that “[w]e believe it would be
19
appropriate as a matter of policy for pay increase to be blocked until August 2013 so that
these teachers are subject to a full 2-year freeze,” Mikowicz Email, a policy suggestion is
not an interpretation of the PFA and is therefore not entitled to deference. Moreover, as
such a policy would extend the freeze beyond the statutorily-imposed deadline, the court
finds that it is contrary to the plain meaning of the PFA. In such circumstances, OPM’s
interpretation is not entitled to deference. Chevron, 467 U.S. 837 (“If the intent of
Congress is clear, that is the end of the matter; for the court, as well as the agency, must
give effect to the unambiguously expressed intent of Congress.”). Accordingly, DoDEA
erred in applying the pay freeze beyond the December 31, 2013 statutory deadline set by
the PFA.11
IV. CONCLUSION
For the reasons set forth above, the government’s motion for summary judgment is
GRANTED IN PART AND DENIED IN PART and plaintiffs’ motion for summary
judgment is GRANTED IN PART AND DENIED IN PART. The parties shall file a
status report by May 8, 2015 setting forth a schedule for resolving damages in this case.
11
At oral argument, the government discussed two cases which it argued permit DoDEA to
continue the pay freeze following its statutory expiration. In the first, the Supreme Court held
that the Commissioner of Social Security could assign retiree benefits to operators in the coal
industry even after the deadline specified by the animating statute. Barnhart v. Peabody Coal
Co., 537 U.S. 149, 153 (2003). In the second, the Supreme Court held that the Secretary of
Labor could recover misused funds even once 120 days had passed since a complaint alleging
such misuse had been filed. Brock v. Pierce County, 476 U.S. 253, 266 (1986). These cases are
distinguishable from the present case, as both deal with circumstances in which Congress
obligated the agency to act. In this case, however, Congress did not require action but rather
prohibited action. As a result, the incentive that the Supreme Court recognized to spur action, id.
at 265 (“The 120-day provision was clearly intended to spur the Secretary to action, not to limit
the scope of his authority.”), is not present in this case.
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IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge
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