P.S. Docket No. AO 14-268


November 26, 2014

In the Matter of the Administrative Offset Petition

GEORGE D. MATTHEWS v. UNITED STATES POSTAL SERVICE

P.S. Docket No. AO 14-268

APPEARANCE FOR PETITIONER:
George D. Matthews

APPEARANCE FOR RESPONDENT:
Crystal Sensabaugh
Labor Relations Specialist
United States Postal Service

INITIAL DECISION

George D. Matthews challenges a debt assessed by the United States Postal Service which is seeking to collect $857.25 for salary overpayments. I rule in favor of Mr. Matthews by granting his Petition.

FINDINGS OF FACT

  1. Mr. Matthews worked for the Postal Service as a truck driver (Tr. 74, 122). He was a member of a collective bargaining unit and covered by a collective bargaining agreement (CBA) (Exh. 12; Tr. 126).
  2. In June 2013, Mr. Matthews contacted the Postal Service’s human resources representative assigned to assist with his retirement planning (HR retirement specialist) about his plans for retirement at the end of the summer of 2013. During this conversation, Mr. Matthews explained that he had carried over a positive balance of 440 hours of annual leave from 2012 and would have approximately 521 hours of annual leave as of the end of August 2013. The HR retirement specialist stated that Mr. Matthews would be paid for all earned annual leave with a terminal leave check. (Tr. 125, 128-32, 134-35).
  3. In early 2013, Mr. Matthews had a similar conversation with his local human resources representative who also explained that he was entitled to a lump sum check for all his annual leave (Tr. 25, 45-48, 127-28).
  4. Mr. Matthews retired on August 31, 2013, which is at the end of the first week of pay period 19-2013 (Exh. 7; Tr. 28, 48, 66). On his behalf, his supervisor submitted a leave form for 13.96 hours of annual leave and 18.04 hours of sick leave for week 2 of pay period 19-2013 (i.e., after his effective retirement date). (Exh. 1; Exh. 3 at 4; Exh. 8; Exh. 11 at 7; Tr. 27-28, 123, 137-38).
  5. The Postal Service seeks to collect $857.25 for the 13.96 hours of annual leave and the 18.04 hours of sick leave it paid to Mr. Matthews for week 2 of pay period 19-2013 (Exh. 4; Exh. 5; Exh. 11 at 7).1 The Postal Service assessed a debt because week 2 of pay period 19-2013 is after Mr. Matthews’s effective retirement date (Exh. 8; Tr. 77-78).
  6. The Postal Service invoiced Mr. Matthews for the annual leave, sick leave, and taxes associated with the leave, totaling $857.25 (Exh. 4).
  7. Mr. Matthews had a positive leave balance of 499.24 hours of annual leave on August 31, 2013 (Exh. 1; Exh. 11 at 7; Tr. 54-58). The Postal Service paid Mr. Matthews for only 440 hours of the 499.24 hours of earned annual leave (Petition; Exh. 1; Tr. 28).2
  8. Mr. Matthews then filed a Petition challenging the Postal Service’s assessed debt of $857.25, and sought recovery for earned annual leave in excess of 440 hours (Petition).

DECISION

The Postal Service seeks to collect $857.25 for 32 hours (i.e., 13.96 hours of annual leave and 18.04 hours of sick leave) it paid Mr. Matthews after he retired (see Finding 5). Mr. Matthews concedes the overpayment, but counters that the Postal Service refused to pay him for 59.24 hours of annual leave which he earned before he retired, and this amount offsets the 32 hours (see Finding 7). Under the facts of this case, I agree with Mr. Matthews, and conclude that the earned but unpaid annual leave offsets the assessed debt.

At the time of his retirement, Mr. Matthews had earned 499.24 hours of annual leave (Finding 5). The Postal Service did not pay for 59.24 hours of annual leave because it was over the 440 hour terminal leave payment limit for bargaining unit employees contained in the Employee Labor Relations Manual (ELM) (see Finding 7). ELM Section 512.732(b) provides:

"Bargaining unit employees may receive a lump sum leave payment: (1) If separating other than under the Voluntary Early Retirement Authority (VERA), for accumulated annual leave carried over from the previous year; accrued annual leave for the year in which they separate, up to the carryover maximum for their bargaining unit (see 512.32); any unused donated leave; and for full-time and part-time regular employees, holidays that fall within the terminal leave period. Any part of the unused annual leave earned during the leave year of separation that is in excess of the maximum carryover amount is granted prior to separation rather than paid out in the form of a lump sum payment. . . ."

See UNITED STATES POSTAL SERVICE EMPLOYEE AND LABOR RELATIONS MANUAL (APRIL 2013), available at http://about.usps.com/manuals/elm/elm.htm. Based on the ELM and as a member of the bargaining unit, Mr. Matthews would forfeit any leave in excess of 440 hours of annual leave.

However, Mr. Matthews argues that the Postal Service breached the CBA. The CBA provides that "[c]are shall be exercised to assure that no employee is required to forfeit any part of such employee’s annual leave." (Exh. 12 at 2). The CBA language is similar to the ELM (as quoted above) which provides that annual leave in excess of the 440 hour maximum carryover amount "is granted prior to separation" so that an employee does not forfeit leave.

The Postal Service relies on the portion of ELM § 512.732(b) limiting terminal leave recovery to 440 hours. However, it ignores the immediately adjacent sentence of the ELM providing that accrued annual leave in excess of 440 hours is granted prior to separation. I interpret this ELM section to require the Postal Service to have paid Mr. Matthews for the earned annual leave over 440 hours. My interpretation is consistent with the advice provided to Mr. Matthews by two Postal Service human resources specialists (Findings 2-3). Indeed, Mr. Matthews explains that had he known that he would forfeit annual leave in excess of 440 hours, he would have taken the leave before retiring. Under these circumstances, I believe that Mr. Matthews is entitled to an offset against the debt for the annual leave that he forfeited.

Moreover, not paying Mr. Matthews for the leave he earned would create a windfall for the Postal Service. Accord James L. Loehwing, P.S. Docket No. DCA 97-98 (May 23, 1997) (an overage in one area may be used to offset a shortage to avoid a windfall).

The Postal Service is correct that Mr. Matthews should not have been paid for 32 hours of leave after his effective retirement date. However, this amount is offset by 32 hours of the 59.24 hours that he earned but which it incorrectly concluded that he forfeited. Accord Ashley A. Nokes, P.S. Docket No. DCA 14-149 (July 16, 2014) (a salary underpayment can reduce an overpayment).

Accordingly, the assessed debt of $857.25 is not recoverable, which is the extent of my authority in this case. See 39 C.F.R. § 966.10.

ORDER

The Petition is granted. The Postal Service may not collect $857.25 from Mr. Matthews.


Peter F. Pontzer
Administrative Judge

1 Mr. Matthews does not challenge that he was paid for these 32 hours of leave. Week 2 of pay period 19-2013 was a short week (32 hours, not 40 hours) because of the Labor Day holiday.

2 He sought payment for 521 hours of annual leave (Petition), but was paid for 440 hours. At trial Mr. Matthews revised his calculations based on his last pay stub (Exh. 11 at 7) and explained he was owed 59.24 hours of annual leave not 81 hours of annual leave (Tr. 129, 132-33).