In the Matter of the Petition by:

JAMES ADAMCZYK,
106 Prospect Street,
Nutley, NJ 07110-3143;

LORI STEWART-BRANCH,
P. O. Box 22406,
Newark, NJ 07101-2406;

ROBERT MILLER,
45 International Avenue,
Piscataway, NJ 08854-5330;

JAMES VALENTINO,
P. O. Box 20248,
Newark, NJ;

ANDY KICA,
1669 Springfield Avenue,
Maplewood, NJ 07040-2924

P.S. Docket Nos. DCA-114-118

03/19/92

Grant, Quentin E. Chief Administrative Law Judge

APPEARANCE FOR PETITIONERS: Michael Melchionda, Jr., Advocate Branch #53,
National Association of Postal, Supervisors, P. O. Box 20332,
Newark, NJ 07101-6332

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

By consolidated petition filed January 30, 1992, the petitioners, all Postal Service employees, requested an oral hearing on notices of involuntary administrative offsets under the Debt Collection Act (notice), dated January 24, 1992, received by each of them. Each notice stated the intention of the Postal Service to collect from the employee by deduction from disposable pay, an amount of indebtedness resulting from alleged overpayment of night differential premium pay.

The petitioners and the Postal Service filed numerous documentary exhibits prior to hearing with the consolidated petition and the Postal Service answer thereto.

A consolidated hearing was held in Newark, NJ, on March 10, 1992. Witnesses called by the Postal Service were (1) Alex Bertrand, Acting Manager of Quality Control at the Newark Main Post Office from July to October 1991; (2) Gerald Silberlight, Manager of Accounting Services, Newark Field Division; (3) Brenda Dennis, General Supervisor in PSDS, Newark Field Division. Witnesses for the petitioners were (1) Wallace Cunningham, former Manager of Quality Control, Newark Main Post Office; (2) James Valentino, one of the petitioners and Acting Manager of Quality Control from July 1991 to January 1992; (3) John Carlucci, President of Branch 53, NAPS; (4) Melvin Weibush, Manager, Labor Relations, Newark Field Division

At the conclusion of the hearing, closing oral arguments, in lieu of written briefs, were made by Mr. Melchionda and Mr. Cotreau.

The following findings of fact are based on the testimony of the witnesses, the exhibits, and my observation of the demeanor of the witnesses.

FINDINGS OF FACT

1. The petitioners James Adamczyk, Lori Stewart-Branch, Robert Miller, James Valentino, and Andy Kica are, and were during the period covered by the alleged indebtedness of each of them, Quality Control (QC) Supervisors and FLSA-exempt EAS employees of the Postal Service at the Newark, NJ Main Post Office (Stip.).

2. Each petitioner was, on original assignment as a QC supervisor, assigned normal working hours falling in the night tour (sometimes referred to in testimony as Tour III), 6:00 P.M. to 6:00 A.M., and was coded for, and received, night differential premium pay for all hours worked.

3. At various times between 1986 and 1990 the petitioners were assigned by their manager, Wallace Cunningham, to flexible hours with the result that a substantial portion thereof fell in Tour II (6:00 A.M. to 6:00 P.M.) Until November 1990 they remained coded for and continued to receive night differential pay for all their work hours, whether they fell in Tour II or Tour III.

4. At least one of the petitioners raised with the then QC Manager, Wallace Cunningham (now retired), the propriety of receiving night differential pay for work performed during Tour II. Mr. Cunningham presented the question to Evelyn Kavinski, the then Division Manager of PSDS (now retired), and was advised that night differential was properly payable (Tr. 146-47). Accordingly, petitioners' pay coding was not changed.

5. Sometime after mid-July 1990, following the retirement of Mr. Cunningham, the acting QC Manager, Alex Bertrand, raised with the Manager of PSDS, Kathy Richards, who succeeded Ms. Kavinski, the question whether the petitioners were properly receiving night differential. As the result of consideration of the question by Newark Field Division and Newark Main Post Office management personnel, payment of night differential to petitioners was discontinued in November 1990.

6. On or about April 12, 1991, petitioners were notified by letter from the Controller of the Newark Field Division, Eugene Rear, that each was indebted to the Postal Service by reason of erroneous payment of night differential, in a certain dollar total, for work performed in non-night differential hours over a period specified for each of them. The letters demanded repayment.

7. The amount demanded of each Petitioner was based on an invoice from the Minneapolis PDC generated at the request of the Newark Field Division. The petitioners, without conceding liability, do not take significant issue with the accuracy of the PDC computations which, for each petitioner, shows the following amount owing:

Adamczyk                    $3,487.95
Stewart-Branch           $3,728.96
Miller                             $2,235.27
Valentino                      $3,463.41
Kica                              $7,934.94

8. Following receipt of the April demand for repayment of the above amounts, there was correspondence concerning the demand between John Carlucci, President, NAPS Branch 53, representing petitioners, and Eugene Rear, Controller of the Newark Division. Also there were meetings attended by union, division, and main post office representatives and, on at least one occasion, one or more of the petitioners. The essential position taken by the Newark Division in justification of the demand is reflected in an undated letter from Mr. Rear to Mr. Carlucci (Petit. Ex. 13) referring to the latter's May 24, 1991 letter. Citing Postal Bulletin 21253 (7-10-80), Mr. Rear stated that FLSA-exempt EAS employees in grade 23 and below are eligible for night differential only for work performed during hours that fall within the established parameters for such premium, i.e. 6:00 P.M. to 6:00 A.M. The position of the petitioners, as set forth in Mr. Carlucci's May 24 letter, was that all the petitioners were initially assigned to night tours in accordance with PB 21253, with their pay coded at PDC for night differential premiums, and were, in effect, "locked in" to such tours and such premiums until their work hours and the applicable night differential pay code were permanently changed through the filing of a Form 50 by the personnel section at the request of the QC Manager in whom workhour control and responsibility rests.

9. The petitioners argue that any overpayment of wages to them was not due to fault on their part but to errors, if there were any, by the QC Manager, the Human Resources Division and PSDS and, therefore, that the demands for repayment should be waived.

10. There is no claim that the petitioners falsified their time cards or in any other affirmative way contributed to the overpayment claimed. Nor have Mr. Cunningham or Ms. Kavinski been charged with misconduct or impropriety, as distinguished from error, in their handling of this pay problem.

11. Attached to the Postal Service's answer to the petition is a copy of the Code of Ethical Conduct (ELM 660) and USPS Standards of Conduct (ELM 666) which the Postal Service hearing representative claims the petitioners violated in accepting night differential to which they were not entitled, in not taking more aggressive steps to terminate payment of that premium, and in failing to report the matter to the Postal Inspection Service. The evidence does not support a finding that petitioners, in connection with the alleged overpayment, violated any part of ELM 660 or 666.

APPLICABLE REGULATIONS

The following portions of postal regulations and instructions have been implicated in these matters:

[Management Instruction EL 430-80-3 (6-28-80)]

V. OVERTIME AND PREMIUM PAY

ELIGIBILITY

* * * *

B. Eligible. FLSA exempt employees in EAS 23 and below (excluding postmasters), who are covered under the provisions of this instruction, are eligible for Night Differential and Sunday Premium when those hours that are normally worked in a service day or week fall within the specified time parameters of these premiums.

[Postal Bulletin 21253, 7-10-80]

I. TIMECARD OFFICES

* * * *

B. Special Pay Provisions

1. Night Differential and Sunday Premiums. FLSA exempt EAS employees in Grades 23 and below are eligible for night differential and Sunday premium pay for hours that fall within the established parameters for such premiums. The hours are payable only if they are part of the employee's normal workhours. Employees, normally receiving night differential and/or Sunday premium, continue to receive such premiums when temporarily reassigned for intermittent periods during a single workweek.

Example: When an employee who normally receives Sunday premium and/or night differential is temporarily reassigned to another schedule, the employee does not lose the premiums that would have been earned had he/she not been temporarily reassigned.

* * * *

II. PSDS OFFICES

* * * *

B. Exempt Employee's Normal Work Hours

FLSA exempt EAS employees do not have fixed work hours. (Reference Management Instruction 430-80-3, Section 1.) However, it is usually possible to establish Normal work hours based on the inherent needs of the employee's job requirements.

1. Initial Establishment The personnel section, in conjunction with each division head, should determine the normal work hours of each exempt employee for Week 1 of PP 16-80. These work hours should consist of a begin tour, out-to-lunch, in-from-lunch, and an end tour time for each workday. It will be used to establish the employee's FLSA exempt coding as described below in Section C.

2. Work Hour Changes. Whenever an FLSA exempt EAS employee's work hours permanently change due to a reassignment or promotion, they should be broken out as in 1 above and used to determine the necessary changes to the employee's FLSA exempt coding. See Section C below.

Temporary work hours changes must not be used to alter the employee's FLSA exempt coding. As described in the Management Instruction, night differential and Sunday premium are earned based on the exempt employee's normal work hours and not when the employee actually works.

C. FLSA Exempt Coding in Employee Master

The normal work hours as described in B above, are needed so that it can be determined what work and premium credits the exempt employee will get for a workweek regardless of when or how many hours are actually worked.

[ELM 434.2 (9-2-83)]

434.2 Night Differential

.21 Explanation. Night differential is a premium paid to eligible employees for all work and paid training or travel time performed between 6:00 p.m. and 6:00 a.m.

* * * *

.223 Eligible exempt nonbargaining unit employees receive night differential when those hours that are normally worked in a service day fall within the specified parameters of this premium.

[ELM 434.2 Night Differential (5-1-89)]

* * * *

434.223 Eligible exempt employees receive night differential only when part or all of their normal schedule falls within the specified parameters of this premium.

DISCUSSION

The position taken by the Newark Field Division in initiating these Debt Collection Act proceedings is stated in the Division Controller's undated letter, written on or about April 12, 1991, to each petitioner (PS Ex. 1; Mr. Cotreau, Tr. 12). This position is amplified in the Division Controller's undated letter to John Carlucci, President, NAPS-Branch 53, referring to the latter's letter dated May 24, 1991 (Petit. Ex. 13). The Division's position, citing Postal Bulletin (PB) 21253, Sections I B.1 and II B (set forth above), is that FLSA-exempt EAS employees, such as petitioners, do not have fixed work hours, are not locked into any assigned hours, work flexible hours at the discretion of management, and are eligible to be paid night differential only for hours worked which fall within night differential parameters (6:00 p.m. and 6:00 a.m.). The Division concludes, therefore, that petitioners must repay the amounts demanded representing night differential pay received for hours worked outside such parameters.

Petitioners assert that the Division's position is incorrect in that it ignores the fact that in compliance with PB 21253, Section II B.1. and C, petitioners' normal work hours, on their initial QC assignment, were determined and established as night differential hours, and their pay coding was established accordingly. They argue that this coding, based on their manager's decision in consultation with PSDS, was not changed when they were placed on flexible hours and, therefore, they were entitled to receive night differential for all hours worked, whether or not they fell within the night differential parameters, until their normal work hours and coding were permanently and properly changed.

Due to ambiguity and uncertainty in the pertinent regulations, there is merit on both sides of the dispute. The provisions relied on by the Division, standing alone, do indeed support the conclusion that petitioners should have been paid night differential only for night hours actually worked, not for daytime (Tour II) hours. On the other hand, those portions advanced by petitioners are equally supportive of their opposition to the demand. Also Petitioners are supported by lack of definition of the word "temporarily" in PB 21253 I B.1. which says that employees "normally receiving night differential *** continue to receive such premiums when temporarily reassigned for intermittent periods during a single work week." Testimony at the hearing revealed that there is no definition of the word by way of policy and no interpretative consensus as to its meaning (Tr. 97, 118, 123-25, 133-34, 159, 171-72). Thus, it seems to have been within the discretion of the QC Manager, Mr. Cunningham, guided by PSDS advice, to regard the change to flexible hours as temporary and not to request that the night differential coding be changed (Tr. 134). Petitioners are also strongly supported by PB 21253, section II B.2. which provides for change of pay coding by PSDS only when an exempt employee's normal work hours are permanently changed [by proper administrative action initiated by the supervisor] and which prohibits a change of pay coding for temporary work hour changes and states that "night differential [is] earned based on the exempt employee's normal work hours [as administratively established] and not when the employee actually works."

CONCLUSION

The Newark Field Division has failed to support by a preponderance of the evidence the validity of the demands on which the Debt Collection Act notices were issued to petitioners. Their manager and the PSDS manager appear to have exercised reasonable judgment under the ambiguous, confusing and conflicting regulations in continuing petitioners' night differential pay coding for the periods in question. There is no indication of fraud, misrepresentation, fault or lack of good faith on the part of anyone involved. To sustain the Debt Collection Act notices under these circumstances would also be against equity and good conscience.

Accordingly, I conclude that petitioners are not indebted to the Postal Service in the amounts demanded in the notices of involuntary salary offsets which gave rise to the petitions.