P.S. Docket No. DCA 04-116
October 01, 2004
In the Matter of the Petition by
PAUL D. TESTA
Post Office Box 1258
at
Molalla, OR 97038-1258
P.S. Docket No. DCA 04-116
APPEARANCE FOR PETITIONER:
Paul D. Testa
P.O. Box 1258
Molalla, OR 97038-1258
APPERANCE FOR RESPONDENT:
Peter J. Henry, Esq.
Employment and Labor Law
United States Postal Service
475 L'Enfant Plaza SW, Room 6414
Washington, DC 20260-1150
DECISION ON MOTION TO DISMISS
Respondent, the United States Postal Service, has filed a Motion to Dismiss, arguing that the Debt Collection Act of 1982, 5 U.S.C. §5514, does not apply to the debt alleged in this case and that Petitioner is, therefore, not entitled to a hearing under the Debt Collection Act and the Postal Service’s implementing regulations. Petitioner filed a reply to the motion. The following findings of fact necessary to rule on the motion are based on all the material filed by the parties.
FINDINGS OF FACT
1. In pay period 13 of 2004 (covering May 29-June 11, 2004), due to a payroll processing error, thousands of Postal Service employees, including Petitioner, received a duplicate payment. The duplication was of a payment previously made in 2002 from the reserve fund of a program known as Economic Value Added (EVA) when that program was ended. (M/D, Ex. 1).
2. The error was discovered quickly and, on June 15, 2004, the Postal Service Chief Financial Officer sent a generic letter to all affected employees. This letter stated that additional information about recovering the money would be forthcoming and advised the employees not to spend it. (M/D, Ex. 1, attach 1).
3. A letter to Petitioner, dated July 23, 2004, from an Accounting Manager in Oregon, informed Petitioner that he owed the Postal Service $3,034.13, as a result of the payroll error discussed above. The letter also stated that debts that remained unpaid as of August 1, 2004, would be “submitted to an expedited collection process.” (M/D, Ex. 1, attach 2).
4. On August 5, 2004, the same Accounting Manager sent Petitioner another letter, stating that the Postal Service would begin deducting $275.27 each pay period to recover the debt. Petitioner filed his Petition for Hearing under the Debt Collection Act with the Judicial Officer Department on receipt of this letter. He stated that he had been on extended sick leave and, although he did notice that he received a larger than normal paycheck in pay period 13, the August 5 letter was the first notification he had received from the Postal Service concerning this matter. (M/D, Ex. 1, attach 3; Petition).
5. The August 5 letter also informed Petitioner that he could contest the collection by writing to the Manager, Labor Relations Policy Administration, at Postal Service Headquarters. Petitioner sent a copy of his Petition to that office. (M/D, Ex. 1, attach 3; Petition).
6. Respondent made the first withholding of $275.27 from Petitioner’s paycheck in pay period 17. (M/D, Ex. 1).
7. The Debt Collection Act of 1982, codified at 5 U.S.C. §5514, provides employees a right to a hearing on the employing agency’s determination of the existence of a debt. The Postal Service’s implementing regulations for debt collection procedures are found in the Employee and Labor Relations Manual (ELM), Sections 450-455 for employees who are not members of a collective bargaining unit, and Sections 460-465 for employees who are members of a collective bargaining unit. Petitioner is not a member of a collective bargaining unit. The rules and procedures governing the right to a Debt Collection Act hearing, applicable to both groups, begin at Section 452.3. Effective July 22, 2004, Section 452.4 of the ELM was revised to incorporate nearly verbatim a provision that was added to the Debt Collection Act as part of the Debt Collection Improvement Act of 1996.[1] (M/D, Ex. 2).
8. ELM Section 452.4 is titled, Exceptions to Procedures Found in Sections 452.2 and 452.3, and states, in pertinent part:
a. The procedures governing the collection of postal debts contained in sections 452.2 and 452.3 do not apply to:
* * *
(2) Routine intra-agency adjustments of pay that are attributable to clerical or administrative errors . . . that have occurred within the four pay periods preceding the pay period in which the first adjustment is made, provided the individual is given notice in accordance with section 452.4(b);
* * *
b. At the time the first adjustment is made pursuant to section 452.4(a)(2) or (3), or as soon thereafter as practical, the individual must be provided written notice of the nature of the debt and adjustments and a point of contact for contesting collection.
DECISION
Petitioner cites the ELM provisions that set out the procedural requirements for debt collection actions and that entitle him to a formal hearing, and argues that Respondent has not complied with those procedural requirements. He also argues that because he spent the money before receiving any notification of the error, repayment of this money would impose a serious financial hardship upon his family.[2]
Respondent argues that this case fits squarely within the ELM provision quoted in Finding of Fact #8 that incorporated the Debt Collection Act amendment, i.e., that this is a pay adjustment necessitated by a clerical or administrative error, that Petitioner was given the notice and point of contact required by the statute and the ELM, and that the adjustment began within four pay periods of the error.
Respondent is correct. On the facts of this case, Petitioner is not entitled to a Debt Collection Act hearing and Respondent was not required to follow all the procedural steps cited by Petitioner. Respondent’s motion is granted and the Petition is dismissed.
Bruce R. Houston
Chief Administrative Law Judge
[2] In an August 26, 2004 response to the Petition, a copy of which was sent to the Manager, Labor Relations Policy Administration (see Finding #5), the Manager offered to reduce the rate of deductions. (Attachment to Petitioner’s August 31, 2004 submission).