January 25, 2017

In the Matter of the Debt Collection Act Petition

MICHELLE BROWN v. UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 16-224

APPEARANCE FOR PETITIONER
Albert Lum
Scialla Associates, Inc.

APPEARANCE FOR RESPONDENT
James Tee
Labor Relations Specialist

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, Michelle Brown, filed a Debt Collection Act Petition challenging an $18,263 debt assessed by Respondent, United States Postal Service, which sought collection of money stolen from a post office she managed.  I conducted a hearing on November 16, 2016 in Newark, New Jersey.  I grant the Petition, ruling in Ms. Brown’s favor.

FINDINGS OF FACT

1. At all relevant times, Ms. Brown served as the acting manager of the Vailsburg, New Jersey Post Office.  On Saturday, July 2, 2016, she was not scheduled to work.  (Tr. 165, 167, 183).
2. Ordinarily at the end of the day in the Vailsburg Post Office, the lead clerk, known as the T-7 clerk, counted the day’s received money, placed it in a sealed deposit bag, and secured it in a safe.  However, on July 2, 2016, the T-7 clerk called in sick.  (Tr. 12, 19, 112-13, 150-51).
3. In addition to letter carriers, only one supervisor and one window clerk (known as a sales associate) worked at the Vailsburg Post Office on July 2, 2016.  The supervisor had been serving a detail there for approximately one month and had not closed that post office before.  He called Ms. Brown that morning to inform her that the T-7 clerk had called in sick.  Ms. Brown arranged for a supervisor from another office who previously had worked in Vailsburg, to close out the post office at the end of the day.  However that other supervisor forgot to go to Vailsburg.  (Tr. 9-12, 37-38, 43, 47-51, 167-68, 186, 197-98).
4. Despite being sick, the T-7 clerk nevertheless arrived very early at the Vailsburg Post Office that morning to open the postal store for the sales associate.  The T-7 clerk opened the safe and told the sales associate that at the end of the day he should place the money he received into the safe, and lock it by pulling the handle and spinning the combination.  The T-7 clerk explained that she then would open the safe on Tuesday morning (the next business day) to perform any needed processing.  (Tr. 114-18, 137-38, 153-54). 
5. On July 2, 2016, the sales associate collected $18,263, including $16,770 in cash from customer transactions (collectively, “the money”)¹ (Tr. 11, 40-41, 66-68, 94, 156; Answer Addendum at 13; Resp. Exh. 8; Pet. Exh. 1).
6. At the end of the day, the sales associate, who had worked eleven hours, was anxious to go home.  He gave the money to the supervisor without telling him about the T-7 clerk’s instructions from that morning.  (Tr. 13, 39-40, 154-62).
7. The Vailsburg supervisor did not know that he could secure the money in the safe without a combination, and he did not know the combination.  The supervisor called the sick T-7 clerk to help close the post office but he did not say specifically that he needed her assistance to secure the money in the safe.  Although the T-7 clerk initially agreed, ultimately she felt too sick to assist.  She assumed that the sales associate had secured the money in the safe based on their discussion that morning, and did not tell the supervisor that the safe was open and available to secure the money.  (Tr. 13-19, 131-33, 138-40).
8. Without anyone arriving to assist him, at the end of the day, the supervisor simply left the money in Ms. Brown’s unlocked office in an unlocked desk drawer.  After locking the exterior of the post office, he went home.  (Tr. 13-14, 16-18, 20-23, 43).  The money was not in a sealed deposit bag, but rather was left loosely in the drawer without paperwork (Tr. 21-22, 31-32, 41-42, 172, 201).  The supervisor did not tell Ms. Brown, or anyone else, that he had left money in a desk drawer in her office, and nobody saw him place the money in the drawer (Tr. 23-24, 28).
9. During the next business day morning, July 5, 2016, a letter carrier entered Ms. Brown’s office to discuss a scheduling issue.  During the discussion, Ms. Brown opened the desk drawer to check a schedule which she kept there.  She saw cash and quickly closed the drawer without touching the money.  She did not know that it was from the July 2 customer transactions, or where the money had come from.  This was the first time Ms. Brown had discovered money in her desk.  (Tr. 170-73, 177, 202-03).
10. Rather than use the schedule in her desk drawer containing the money, Ms. Brown and the letter carrier walked together to a schedule board located outside her office, and continued their conversation there.  Ms. Brown did not lock the door when they left her office.  (Tr. 170-71, 192-93).
11. Just as Ms. Brown finished her conversation with the letter carrier, postal truck drivers arrived, and Ms. Brown was required to print their schedules from a computer which was not in her office.  Ms. Brown then immediately returned to her office after having been gone for between five and fifteen minutes.  She opened the drawer where she had seen the money, but it was gone.  (Tr. 171-72, 193-94, 201, 204-05; Resp. Exh. 1).
12. Ms. Brown then called the supervisor at home, and asked him if he had placed money in her drawer.  After he responded that he had, Ms. Brown called the Office of Inspector General and her manager to report that the money was missing, and request an investigation.  (Tr. 24-26, 70, 171-72, 199, 214).
13. Ms. Brown required all employees to remain at the post office for the investigation.  However, one letter carrier already had left, and subsequently was recalled to the post office.  Special agents from the Office of Inspector General conducted an investigation that morning.  They interviewed employees at the post office, reviewed security footage, and searched the premises and employee vehicles.  However, the investigators did not reach any conclusion about who had taken the money, and it was never found.  (Tr. 53-57, 65, 199, 201, 215; Resp. Exh. 2). 
14. On July 21, 2016, the Postal Service issued Ms. Brown a Letter of Debt Determination seeking collection of the missing $18,263 (Pet. Exh. 2).  Although Ms. Brown filed a Debt Collection Act Petition before the Postal Service had issued a Notice of Involuntary Administrative Salary Offsets, the parties waived further procedures, and agreed that the case could proceed to a hearing (Order and Memorandum of Telephone Conference, October 5, 2016).

DECISION

The Postal Service relies on two theories for recovery.  First, it argues that Ms. Brown was the last person in possession of the money and failed to take appropriate security precautions thereby allowing the money to be stolen.  Second, the Postal Service argues that as the manager of the post office, Ms. Brown is accountable for the improper procedures used to collect and secure money from customer transactions, and therefore is liable for all losses resulting from those improper procedures. 

Among other arguments, Ms. Brown emphasizes that postal regulations do not impose personal liability in a situation like this, and that she should not be liable for someone else’s criminal acts. 

The imposition of personal financial liability on a postal employee must be based on specific legal authority.  See Hoffman v. United States Postal Service, DCA 16-189 (November 29, 2016) (employee who agreed to a grievance settlement without authority is not financially liable because there is no legal authority for imposition of liability); McGee v. United States Postal Service, DCA 16-184 (November 14, 2016) (employee who accepted insufficient funds from a customer purchasing money orders is not financially liable because there is no legal authority for imposition of liability); Gary A. Michalak, DCA 02-108 (June 24, 2002) (employee who lost a key is not financially liable for the cost of changing a lock because there is no legal authority for imposition of liability).

The Postal Service relies on Handbook F-1, Accounting and Reporting Policy (January 2015), § 4-11.3.1, for the legal authority imposing financial liability on Ms. Brown for the stolen money.  Handbook F-1, § 4-11.3.1 provides in relevant part:
Postal employees can be held financially liable for losses of stamp accountability unless a claim for loss has been justified.  Any financial loss of postal assets or stamp inventory must be supported by a claim for loss documentation unless repayment by the responsible employee has been made, or a voluntary or involuntary salary deduction has been processed.  Employees may be relieved from personal responsibility to repay a loss if evidence exists that established policies and procedures were followed at the time of the loss.  When this occurs, the manager or supervisor will follow the claim for loss process in providing relief to the employee.

The first sentence provides authority to impose liability in appropriate situations for a “stamp accountability,” such as that of a unit reserve custodian.  Myriad Debt Collection Act decisions support such accountability.  However, no loss of stamps or a specifically-assigned stamp accountability is involved in this case.  The subsequent sentences of the regulation mention “[a]ny financial loss of postal assets,” but they neither assign personal financial liability nor identify a standard for imposing such liability.  This regulation, standing alone, therefore is an insufficient legal basis on which to impose personal liability on Ms. Brown.² 

However, our Debt Collection Act precedent makes clear that liability may be imposed where an employee personally benefits from a loss.  See Pearson v. United States Postal Service, DCA 15-337 (June 24, 2016);McGee, DCA 16-184.  In part based on her demeanor at the hearing, I do not believe that Ms. Brown stole the missing money or otherwise was complicit with or personally benefitted from the theft.  Her behavior after discovering the money was missing suggests to the contrary, and the Office of Inspector General did not conclude that Ms. Brown was involved in the theft (Finding 13).  The personal-benefit basis for liability therefore does not apply. 

Our precedent also allows for personal liability if a specific act of malfeasance or negligence directly caused a loss.  See Joseph Messett, AO 09-15 (I.D. October 9, 2009); Albertha Johnson, DCA 04-71 (August 23, 2004).  I therefore examine whether Ms. Brown’s behavior on July 5, 2016 directly caused the money to be stolen.

Ms. Brown did not place the money in an unsecured location, and was not informed about its placement (Finding 8).  By happenstance, Ms. Brown glimpsed, for mere seconds, a loose pile of cash in her desk drawer (Finding 9).  True, she thereafter left her office, which was in a non-public area, for five to fifteen minutes without locking the door, to attend to postal business (Findings 10-11).  While Ms. Brown’s failure to lock the door, or to delay other pressing business until after she had secured the money could be considered negligent, it does not rise to the level of having directly caused the loss within the meaning of our Debt Collection Act precedent.  At least two other people more directly caused the loss:  the supervisor who left the money in an unsecured location without informing Ms. Brown, and of course, the unidentified thief.³ 

The Postal Service’s second theory provides that Ms. Brown should be liable for any losses at her post office as its manager, relying on Maureen Brooks, DCA 02-489 (February 7, 2003).  We have rejected this position on numerous occasions.  See, e.g., Ross v. United States Postal Service, DCA 14-308 (January 9, 2015); Zerex Veal, DCA 12-4 (August 17, 2012).  Maureen Brooks involved the theft of Registered Mail, and the judge found the station manager liable for the loss because she allowed a series of security breaches at the post office that were the “proximate cause” for the loss.  Maureen Brooks imposed liability based on then-existing but no longer extant regulations, which provided that a postmaster or manager was responsible for the full amount of a loss where an accountable loss occurred.  The decision found that other regulations imposed such accountability on postmasters for losses of Registered Mail.  These regulatory authorities either no longer exist or do not apply here, and Maureen Brooks is readily distinguishable.

CONCLUSION AND ORDER

The Petition is granted.  The Postal Service is prohibited from offsetting the $18,263 assessed debt from Ms. Brown by involuntary administrative salary offset.

Gary E. Shapiro
Administrative Judge