Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Yongsan, Republic of Korea
Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
08/10/2015
Date
The claimant is a Federal civilian employee of the Department of the Army (DA) in Jongsan, Republic of Korea (ROK). He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s termination of his living quarters allowance (LQA). We received the claim on March 6, 2014, and the agency administrative report (AAR) on August 27, 2014. For the reasons discussed herein, the claim is denied.
The claimant retired from active duty military service on August 31, 2000, in the ROK and shortly after retirement, accepted employment with the private U.S. firm Sterling Software. During the claimant’s tenure in this position, Sterling Software was absorbed by another U.S. firm, Northrop Grumman. He was subsequently appointed to a Federal service position with DA on July 2, 2012, in Yongsan, Korea, and was initially granted LQA.
In May 2013 the claimant was notified that, as a result of a Department of Defense (DoD)-directed LQA audit, it was determined he did not meet the LQA eligibility provisions in the Department of State Standardized Regulations (DSSR) section 031.12b, which requires that an employee recruited outside the United States must, prior to appointment, have been recruited in the United States by his or her previous employer and have been substantially continuously employed by such employer under conditions providing for return transportation to the United States. The notification letter stated that he had been "identified as an employee recruited outside the United States who had more than one employer in the overseas area prior to [his] appointment into appropriated fund Federal civilian service."
The agency states in its AAR that the “[claimant’s] resume indicates continuous presence in ROK from 01 August 1992 through 02 July 2012 when he was appointed to the Department of the Army in his current position.” They also indicate there is “no record of his official job offer from Sterling Software, Inc. to indicate a stateside address is available as proof the offer was made while he resided in the U.S.” and “no record that he transported his family/belongings back to the U.S. from Korea to confirm stateside hire is available.” Further, they indicate that both his resume and the “Questionnaire for LQA Determination” show that “he retired from the military and worked for Sterling Computer, INC and Northrop Grumman as periods of employment while continuously residing in the ROK,” thus concluding he was initially “hired locally overseas as well as [having had] multiple employers prior to accepting his Civil Service position.”
The DSSR sets forth the basic eligibility criteria for the granting of LQA. DSSR section 031.12 states, in relevant part, that LQA may be granted to employees recruited outside the United States under the following circumstances:
a. the employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and
b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:
(1) the United States Government, including its Armed Forces;
(2) a
(3) an international organization in which the United States Government participates; or
(4) a foreign government
and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States.
The claimant responds to the agency’s findings regarding his having had “more than one employer in the overseas area” by stating in his claim request:
….at the time I was initial [sic] hired, I was employed by Sterling Software. The contract and orders specified I was an employee of that company. However, during 2000, Sterling Software was acquired by Northrop Grumman and integrated into its Information Systems. Since the company which originally hired was acquired by Northrop Grumman, along with all employees and contracts, I feel it is an error to consider that as more than one employer.
Information available on Northrop Grumman’s website confirms that Sterling Software was acquired by Northrop Grumman in October 2000, after which it became part of its information systems sector. Further, the claimant submitted a document titled “International Assignment Agreement (IAA) Amendment” issued by Northrop Grumman and dated January 2, 2012, referencing the beginning date of his assignment as October 1, 2000. Thus, we conclude that Sterling Software was absorbed by Northrop Grumman and that the claimant was continuously employed by that entity, initially as an independent firm and later as part of Northrup Grumman, in effect as a single employer. See OPM File Number 10-0001, September 2, 2010.
Relating this to the claimant’s case, he would be eligible for LQA under DSSR section 031.12b only if he could establish that Sterling Software had recruited him in the United States; i.e., that he was physically in the United States during the recruitment process from his initial application for the job with Sterling Software through his receipt and acceptance of the job offer, and that he had been substantially continuously employed by Sterling Software and its successor entity under conditions providing for his return transportation to the United States or one of the enumerated territories or possessions.
The claimant responds to the agency’s findings regarding being “hired locally overseas” by stating in his claim request:
….I was not initially hired in Korea. I retired from the U.S. Air Force on 1 Sept 2000 with no firm employment. I returned to the U.S. for job interviews eventually being hired by Sterling Software for the USFK contract specified in the original orders. Upon hiring I obtained a normal ROK tourist visa and traveled back to Korea to begin my new job. I include copies of the pertinent passport pages showing that I was in the United States during September 2000 and did not return to Korea until 24 Sept 2000[1], under normal entry. It was not until 14 Oct 2000 that my status changed to SOFA [Status of Forces Agreement] A-3, which is also shown on the provided pages.[2]
As indicated above, the claimant asserts eligibility under DSSR section 031.12b on the basis that he was in the United States when he was “hired” by Sterling Software. Based on the claimant’s own description of events, he “returned to the U.S. for job interviews” after his military retirement and upon “hiring” by Sterling Software, traveled back to Korea to begin his new job. The term "recruitment" is not defined in 5 U.S.C. section 5923, the statutory provision authorizing LQA; 5 U.S.C. section 5922, the provision granting the President authority to promulgate regulations governing the administration of LQA; or the DSSR. However, deference is to be afforded to an agency’s interpretation of regulations drafted by another agency where, as here, the interpreting agency adopts and administers the subject regulations, and particularly when an agency is given the authority to implement the regulations of another agency. Bortone v. U.S., 110 Fed.Cl. 668 (2013). The DA’s interpretation of the term “recruitment” as encompassing the entire recruitment process, from applying for to accepting the position, is consistent with the purpose of LQA as an incentive for prospective employees to move overseas to work for the Federal government; i.e., those individuals already living abroad when applying for a position do not need such an incentive. Therefore, that the claimant returned to the United States for a short period of time during the hiring process for job interviews does not establish that he was in the United States when he was recruited by Sterling Software; i.e., when he initially applied for the position.
The claimant submitted a document titled “Invited Contractor and Technical Representative Personnel Data Report” which identifies his “date and place of hire” by Sterling Software as September 18, 2000, in McLean, Virginia. However, since this portion of the report is “to be completed by the contractor employee,” it is not regarded as independent documentation of his location at the time of recruitment or hire by Sterling Software. The record also contains a copy of the claimant’s retirement DD Form 214, Certificate of Release or Discharge From Active Duty, listing his “home of record” as Oakton, Virginia; however, this is not germane to his physical location at the time of his appointment by DA or recruitment by Sterling Software. Furthermore, his resume shows no intervening United States residency occurring between his separation from military service and subsequent employment with Sterling Software. Thus, we are unable to conclude that Sterling Software recruited him in the United States or one of its territories or possessions as required by DSSR section 031.12b.
Moreover, the claimant has failed to establish that he was in “substantially continuous employment” by Sterling Software under conditions which provided for his return transportation to the United States or its territories or possessions. There is no contemporaneous documentation in the claim record establishing that Sterling Software, at the time of hire, provided him return transportation benefits to the United States or documentation regarding what transportation agreement would be honored when Northrop Grumman absorbed Sterling Software. The document issued by Northrop Grumman titled “IAA Amendment” and dated January 2, 2012, states, “the purpose of this amendment is to modify your IAA concerning your overseas assignment to Seoul, South Korea in support of the J6 EI&I program. Your agreement is amended effective January 01, 2012 as follows: The end date of your assignment, which began on October 01, 2000, has been changed from December 31, 2011 to August 31, 2012, an extension of 244 days.” The IAA amendment also indicates the "Repatriation from Assignment is replaced in its entirety as follows":
If you complete the required length of your initial assignment or if the company terminates your assignment early for reasons other than involuntary termination for cause, you will be eligible for repatriation from the Assignment location back to your Home of Record in the U.S. or other approved location if you permanently depart within 30 days of the end of your Assignment and only if all aspects of your repatriation are completed within 60 days of the end of your Assignment. You will be provided a plane ticket to your home of record. Costs for repatriation involving military spouses or former military service members hired in the foreign location will result in the military assuming primary cost reimbursement responsibility for the repatriation and the Company assuming secondary responsibility for cost reimbursement when relocation package is available.
The claimant did not provide the benefits documentation from Sterling Software which was modified by the aforementioned IAA Amendment. Therefore, it is unknown what return transportation benefits, if any, may have been afforded the claimant by that firm before its acquisition by Northrup Grumman such that he had been in “substantially continuous employment” under these conditions for the entire duration of his contractor employment.
Further, even if Sterling Software had recruited the claimant in the United States or one of its territories or possessions, based on the information provided, the claimant was not employed by Northrop Grumman under conditions which provided for his return transportation to the United States or one of its territories or possessions. DSSR Section 031.12b requires conditions to be in place at the time of employment to specifically ensure return transportation to the United States or another of the enumerated locations. Such conditions are not met by the promise of a repatriation payment which in the case of Northrop Grumman, as specified in the IAA Amendment, the claimant would be “eligible for repatriation from the assignment location back to his Home of Record in the U.S. or other approved location.” Thus, the language of the agreement does not specifically ensure return transportation to the United States or another of the enumerated locations. Moreover, the language of the IAA Amendment appears to indicate that Northrup Grumman limited their return transportation commitment to a plane ticket. Specifically in the case of “former military service members hired in the foreign location,” the IAA Amendment states they would assume “secondary responsibility” for reimbursement of “costs for repatriation” (presumably shipment of household goods and dependent travel) only if a “relocation package is available.” Since the claimant did not include a copy of any “relocation package” that may have been “available” to him, there is no evidence that Northrup Grumman obligated itself to fully provide for his return transportation to the United States or the other enumerated locations stipulated in DSSR 031.12b upon termination of his employment. Thus, there is insufficient documentation to establish that the claimant meets the requirements of DSSR 031.12(b), and the claim is accordingly denied.
The statutory and regulatory languages are permissive and give agency heads considerable discretion in determining whether to grant LQAs to agency employees. Wesley L. Goecker, 58 Comp. Gen. 738 (1979). Thus, an agency may withhold LQA payments from an employee when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that the agency’s action was arbitrary, capricious, or unreasonable. Under 5 CFR 178.105, the burden is upon the claimant to establish the liability of the
This settlement is final. No further administrative review is available within OPM. Nothing in this settlement limits the claimant’s right to bring an action in an appropriate