P.S. Docket No. DCA 14-292


June 9, 2015

DONALD  M. MOREY v. UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 14-292

APPEARANCE FOR PETITIONER:
Donald Morey

APPEARANCE FOR RESPONDENT:
Mary Jo. Hauge
Labor Relations Specialist

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Respondent, United States Postal Service, seeks to collect $5,811.14 from Petitioner, Donald Morey, based on a salary overpayment.1  The Postal Service, however, has not proved that Mr. Morey received a salary overpayment. Accordingly, the Petition is granted.  The Postal Service may not collect the debt by involuntary administrative salary offset. 

FINDINGS OF FACT

  1. Mr. Morey worked as a rural carrier in the Bemidji, Minnesota Post Office at all times relevant to this dispute, except for a period of involuntary retirement from September 2007 until July 2011 (Exh. 7 at 5; Exh. 100).  As a rural carrier, his salary was based on his salary step and the size of his route (Exh. 15).
  2. As of July 2006, Mr. Morey was a Step 7 and his assigned route (R11) was rated for 46 rural carrier hours (Exh. 111 at 1). 
  3. Mr. Morey applied for disability retirement on July 13, 2007.  The application was based on misinformation provided by the Postal Service regarding the amount of Mr. Morey’s annuity payment.  (Exh. 100). 
  4. On July 23, 2007, Mr. Morey sought to cancel his retirement application.  The Office of Personnel Management (OPM), however, did not receive Mr. Morey’s request because the Postal Service had given Mr. Morey the wrong fax number for OPM.  (Exh. 100).
  5. OPM approved Mr. Morey’s retirement application on September 12, 2007.  The Postal Service then terminated Mr. Morey’s assignment as a rural letter carrier.  (Exh. 100).
  6. In October 2007, OPM acknowledged Mr. Morey’s cancellation of his retirement, but the Postal Service refused to allow Mr. Morey to return to work.  In March 2009, Mr. Morey appealed from his alleged involuntary retirement to the Merit Systems Protection Board (MSPB).  (Exh. 100). 
  7. In May 2011, the parties settled the MSPB appeal.  Among other things, the agreement provided that:
           2.b The Postal Service also agrees to restore [Mr. Morey] as a Full Time Rural Carrier at the Bemidji, MN Post Office.  [Mr. Morey]
           agrees to work with local management at the Bemidji, MN Post Office and Northland District personnel to facilitate his restoration into
           the full time Rural Carrier position at the Bemidji, MN Post Office . . . . The parties understand and agree that this settlement agreement
           does not include any provision for back pay, leave accrual, leave restoration or any other benefits (except as specifically identified in the
           Paragraph 2(c) below) related to the period of time from [Mr. Morey’s] retirement in September of 2007 to his restoration as a Rural
           Carrier under the terms of this Settlement Agreement and Release.
           2.c The Postal Service agrees to retroactively correct [Mr. Morey’s] salary history to reflect salary increases (step increases)
           he would have received had he not retired on September 20, 2007 through the effective date of his restoration as a Rural Carrier at the
           Bemidji, MN Post Office pursuant to the terms of this Settlement Agreement and Release.
    (Exh. 101).
  8. The parties also agreed that “the Merit Systems Protection Board will retain jurisdiction for enforcement purposes of this settlement agreement” (Exh. 101 at ¶ 4).
  9. Mr. Morey returned to work in July 2011 (Exh. 7 at 5; Exh 111 at 4).  When he returned, all the rural routes in the Bemidji Post Office were being performed by other carriers.  To comply with the settlement agreement and a collective bargaining agreement, the Postal Service began a process to transfer the most junior rural carrier, who was performing the R13 route, out of the Bemidji Post Office so that Mr. Morey could take over that route.  Until that transfer was complete, Mr. Morey performed odd jobs at the Bemidji Post Office.  (Exh. 14; Exh. 111 at 4).
  10. When he returned in July 2011, the Postal Service paid Mr. Morey based on the R11 route (46 evaluated hours) he had been performing when he submitted his retirement papers in July 2007 (Exh. 14; Answer, February 24, 2015).
  11. When the junior carrier was transferred, the Postal Service assigned the R13 route to Mr. Morey in April 2012 (Exh. 111 at 4).  That route, however, was smaller than the R11 route (Exh. 14).  Nonetheless, in the PS Form 50 (Notification of Personnel Action) assigning the R13 route to Mr. Morey, the Postal Service tied Mr. Morey’s salary to the larger R11 route, with the caveat that his salary could go up or down depending on changes to the R11 route.  The Postal Service cited the settlement agreement as the basis for tying Mr. Morey’s salary to the R11 route.  (Exh. 109). 
  12. The R13 route was downsized in January 2013, but the Postal Service did not immediately reduce Mr. Morey’s salary based on the new route size.  Instead, over the next nine months it continued to base his salary on the R11 route.  (Exh. 14 at 2).
  13. In October 2012, Mr. Morey asked the MSPB to enforce certain terms of the settlement agreement.  Specifically, Mr. Morey alleged that the Postal Service (1) improperly adjusted his service computation date, (2) failed to pay him his correct wages, (3) improperly forced him to work extra hours in an attempt to force him to retire, and (4) failed to include a settlement payment in its calculation of Mr. Morey’s “high three” for retirement purposes.  (Exh. 7 at 3–4).
  14. The second issue, related to Mr. Morey’s wages, involved Mr. Morey’s allegation that the Postal Service improperly varied his wages from pay period to pay period, contrary to the terms of the settlement agreement.    
  15. In an Initial Decision dated March 18, 2013, the MSPB’s Central Regional Office denied Mr. Morey’s request in its entirety.   As to the second allegation relating to wages, the MSPB held that Mr. Morey had not produced any evidence proving that the Postal Service had not complied with the settlement agreement.  In discussing this issue, the MSPB noted that the Postal Service “reviewed [Mr. Morey’s] pay records starting with his return to work in July 2011 through the present and contends that his pay reflects the proper payment of his wages based on the evaluation of Route 11….”  (Exh. 7 at 3, 5–6).2
  16. In September 2013, the Postal Service reviewed Mr. Morey’s salary in light of the MSPB’s March 2013 decision.  A Labor Relations Specialist and a Customer Service Analyst contacted a Postal Service attorney for advice about Mr. Morey’s salary.  The attorney said that, according to his understanding of the settlement agreement, Mr. Morey was being overpaid.  The attorney said Mr. Morey should be paid based on the route he was performing, not the route he performed before his involuntary retirement.  (Exh. 14).
  17. In accordance with that advice, on September 10, 2013, the Postal Service retroactively adjusted Mr. Morey’s salary downward effective as of January 12, 2013.  The Postal Service chose the January 12, 2013 date because that was the effective date of a downward size adjustment to the R13 route.  (Answer, February 24, 2015).
  18. On April 9, 2014, the Postal Service sent Mr. Morey an invoice for $5,811.14 based on a salary overpayment.  The Postal Service alleged that Mr. Morey should have been paid for 44 hours each week (based on the R13 route) instead of the 46 hours per week he actually received (based on the R11 route).  According to the invoice, these payments continued from January 26 through November 29, 2013 (pay periods 4 through 25).  (Exhs. 2, 8).
  19. On July 2, 2014, the Postal Service issued Mr. Morey a Notice of Involuntary Administrative Salary Offsets for the debt identified in the April 9, 2014 invoice (Exh. 3). 
  20. On August 4, 2014, Mr. Morey filed a petition with the Judicial Officer Department denying any liability for the debt.

DECISION

As a preliminary matter, I note that the settlement agreement provides for enforcement of its terms by the MSPB (Finding 8).  During this proceeding, I asked the parties if this dispute, which possibly involves interpreting the settlement agreement, should be pursued at the MSPB.  In response, Mr. Morey said he is not going to pursue any further action before the MSPB.  I then notified the parties of my intention to proceed with the case on the merits.  Neither party objected.  (Order and Memorandum of Telephone Conference, January 29, 2015). 

When the Postal Service seeks to recover a salary overpayment, it has the burden to prove that it made the payment, the amount of the payment, and that the employee was not entitled to payment.  Kathryn L. Schrack, P.S. Docket Nos. 11-52, 11-53, 11-54 (August 26, 2011).  A salary overpayment typically results from a mistake or administrative error.  See, e.g., Harkanson v. United States Postal Service, P.S. Docket No. AO 14-224 (I.D. November 13, 2014); John F. Breslin, P.S. Docket No. DCA 13-357 (April 28, 2014); Matthew J. Williams, Jr., P.S. Docket No. AO 13-375 (I.D. March 20, 2014).

Here, the Postal Service did not make a mistake or an administrative error.  Instead, the Postal Service made a conscious decision to base Mr. Morey’s salary on the R11 route when he returned to work in July 2011.  It confirmed this decision when it issued the PS Form 50 assigning Mr. Morey to the R13 route in April 2012.  These decisions were based on the Postal Service’s understanding of the settlement agreement, which it interpreted as requiring it to pay Mr. Morey based on the R11 route.  Also, there is nothing in the record suggesting that the Postal Service officials who made these decisions did not have the necessary authority to interpret the settlement agreement and tie Mr. Morey’s salary to the R11 route.  Thus, the Postal Service failed to prove that Mr. Morey was not entitled to the payments he received between January 2013 and November 2013, which underlie this dispute.      

Only in September 2013, after receiving a conflicting interpretation of the settlement agreement from its lawyer, did the Postal Service first take the position that Mr. Morey was being overpaid.  But this new interpretation of the settlement agreement does not mean the Postal Service had been overpaying Mr. Morey because of a mistake or an administrative error.  Rather, the Postal Service sought to impose a new, unilateral interpretation of the settlement retroactively.  That new interpretation, however, does not mean that Mr. Morey was not entitled to the payments he received.

ORDER

The Petition is granted as to the salary overpayment.  The Postal Service may not collect the alleged debt for salary overpayments by involuntary administrative salary offset.  The parties have settled a dispute relating to a debt for use of a government vehicle.  That part of the Petition is dismissed.

Alan R. Caramella
Administrative Judge

1 The parties settled a $2,460.62 dispute related to the use of a government vehicle.  Accordingly, that part of the Petition is dismissed.  In their submissions, the parties also briefly discussed a $1,000 debt based on a salary advance.  The record does not include a Notice of Involuntary Administrative Salary Offsets for that debt, and the parties have not developed the record concerning it.  If the Postal Service wishes to pursue collection of that debt, it may send Mr. Morey a Notice of Involuntary Administrative Salary Offsets.  Mr. Morey may then ask for a review of the debt under 39 C.F.R. Part 961.  

2 The MSPB denied Mr. Morey’s appeal from this decision in an unpublished decision on May 15, 2014.  Morey v. United States Postal Service, 121 M.S.P.R. 150 (Table).