Jesse Halterman v. Department of Homeland Security

Merit Systems Protection Board·Decided June 23, 2022·No. DC-0432-16-0833-C-1·Unpublished

Opinion

UNITED STATES OF AMERICA MERIT SYSTEMS PROTECTION BOARD

JESSE R. HALTERMAN, DOCKET NUMBER Appellant, DC-0432-16-0833-C-1

v.

DEPARTMENT OF HOMELAND DATE: June 23, 2022 SECURITY, Agency.

THIS ORDER IS NONPRECEDENTIAL 1

Allison B. Eddy, Esquire, and Neil C. Bonney, Esquire, Virginia Beach, Virginia, for the appellant.

Lorna Jerome, Washington, D.C., for the agency.

BEFORE

Cathy A. Harris, Vice Chairman Raymond A. Limon, Member Tristan L. Leavitt, Member

ORDER

¶1 The agency has filed a petition for review, and the appellant has filed a cross petition for review of the compliance initial decision, which granted the appellant’s petition for enforcement in part. For the reasons discussed below, we

1 A nonprecedential order is one that the Board has determined does not add significantly to the body of MSPB case law. Parties may cite nonprecedential orders, but such orders have no precedential value; the Board and administrative judges are not required to follow or distinguish them in any future decisions. In contrast, a precedential decision issued as an Opinion and Order has been identified by the Board as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c). 2

DENY the petition for review and GRANT the cross petition for review. We REVERSE the administrative judge’s finding of compliance regarding the int erest on back pay for pay period 16 of 2016 (PP16/2016). We AFFIRM the remainder of the compliance initial decision, except as expressly MODIFIED to clarify the analysis concerning the deductions for retroactive life insurance premiums and the sufficiency of the agency’s evidence of compliance with its obligati ons to pay interest on back pay, and to address the appellant’s claims that the agency’s delay in processing his back pay caused him to lose profits on his Thrift Savings Plan (TSP) account contributions.

BACKGROUND ¶2 The appellant filed a Board appeal challenging the agency’s decision to remove him from Federal service, which the parties settled. Halterman v. Department of Homeland Security, MSPB Docket No. DC-0432-16-0833-I-1, Initial Appeal File (IAF), Tab 21 at 4-7, Tab 22, Initial Decision (ID) at 1-2. After determining that the parties understood and voluntarily entered into the settlement agreement and that it was lawful on its face, the administrative judge issued an initial decision that dismissed the appeal as settled and entered the agreement into the record for enforcement purposes. ID at 1 -2. The initial decision became final on February 17, 2017, after neither party filed a petition for review. ID at 3. ¶3 In relevant part, the parties agreed that, by March 16, 2017, the agency would provide the appellant with a clean record and “back pay and benefits (to include overtime pay and leave accrual) retroactive to August 17, 2016 through January 13, 2017,” and make “[a]ppropriate deductions . . . to cover benefits premiums and/or contributions.” 2 Halterman v. Department of Homeland

2 We take into account that, according to the National Finance Center (NFC) pay calendars, the back pay period began in PP16/2016 and ended in pay period 01 of 2017. Department of Agriculture, NFC, 2016 Pay Period Calendar, https://www.nfc.usda.gov/Publications/Forms/1217n_16.pdf (last visited June 22, 3

Security, MSPB Docket No. DC-0432-16-0833-C-1, Compliance File (CF), Tab 1 at 9-11; IAF, Tab 21 at 4. ¶4 The appellant filed this petition for enforcement claiming that the agency failed to provide back pay for PP16/2016 and pay period 01 of 2017 (PP01/2017) or any interest on back pay, improperly deducted life insurance premiums from his back pay, and did not correct his employment records. CF, Tab 1 at 5 -7. He requested attorney fees and costs in connection with the petition for enforcement. Id. at 7. In response, the agency argued that it was in compliance because it paid the appellant all of the back pay and interest owed, made the appropriate deductions from his back pay, and corrected his Standard Form 50 (SF-50). CF, Tab 3 at 4-6. In support, the agency submitted sworn declarations from two Human Resource (HR) Specialists; a declaration from the Chief of the Retirement and Benefits Service Center; relevant back pay regulations; payroll and back pay information; and the Federal Government Employees’ Life Insurance (FEGLI) Program Handbook issued by the Office of Personnel Management. Id. at 7-42. ¶5 In reply, the appellant asserted that the agency failed to pay the back pay owed for PP16/2016 within the “requisite timeframe.” CF, Tab 1 at 9-11, Tab 4 at 4. Similarly, he claimed that the interest payment supposedly made on the entire back pay was untimely and that there was no indication the payment covered all of the interest owed. CF, Tab 4 at 5-6. He also argued that the agency’s deduction for retroactive life insurance premiums violated 5 C.F.R. § 550.805(e)(3)(iv)(B), a regulation implementing the Back Pay Act. Id. at 7-9. He further claimed that the agency failed to deduct his TSP contributions from his back pay for PP01/2017 or to make matching contributions, and that, although TSP deductions had been made from his back pay for other pay periods, those funds and the agency’s matching contributions had not yet appeared in his TSP

2022); Department of Agriculture, NFC, 2017 Pay Period Calendar, https://www.nfc.usda.gov/Publications/Forms/1217n_17.pdf (last visited June 22, 2022). 4

account. CF, Tab 3 at 9, Tab 4 at 5, 12, 15. Finally, he alleged that the agency failed to timely issue his resignation SF-50 and to show it cancelled the removal SF-50. CF, Tab 4 at 9. ¶6 The administrative judge issued a compliance initial decision, granting the appellant’s petition for enforcement in part. CF, Tab 7, Compliance Initial Decision (CID) at 1, 10. She applied the Back Pact Act in analyzing the appropriateness of the agency’s back pay and interest payments. CID at 6. As to the appellant’s claim that the agency had not yet paid him back pa y, she found that, although the agency initially breached the settlement agreement by failing to pay the appellant back pay for PP16/2016, that issue was moot because the agency paid the appellant the outstanding back pay on March 24, 2017, and interest on March 29, 2017. CID at 6. She further found that the agency timely paid the appellant during the normal pay cycle for PP01/2017 and that the appellant was not entitled to additional interest for that pay period because the agency computed the interest through January 30, 2017, which was within 30 days of the date the payment was actually made, February 24, 2017, as permitted by Back Pay Act provision 5 U.S.C. § 5596(b)(2)(B)(i). CID at 6-7. ¶7 The administrative judge found the agency in partial noncompliance because it failed to make the necessary TSP deductions for PP01/2017 and ordered the agency to make the appropriate deductions from the back pay and contributions to the appellant’s TSP account. CID at 9. She found the agency in compliance regarding the remaining TSP contributions because, although the TSP contributions had not yet appeared in the appellant’s TSP account, the agency had proven it had made the deductions from back pay as of March 10, 2017. Id.; CF, Tab 1 at 17. She found that the settlement agreement, which allowed for “appropriate deductions” to be made from the back pay, permitted the agency to deduct retroactive life insurance premiums, and that 5 C.F.R. § 550

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