Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
U.S. Department of the Navy
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
08/28/2020
Date
The claimant is a former employee of the U.S. Department of the Navy (Navy), in Philadelphia, Pennsylvania (PA). He requests the U.S. Office of Personnel Management (OPM) review his agency’s decision to deny him of $2,500 in prorated relocation incentive pay. We received his claim on May 22, 2018, and the agency administrative report (AAR) on December 23, 2019. For the reasons discussed herein, the claim is denied.
On June 26, 2017, while residing in Pittsburgh, PA, the claimant received a tentative offer of employment as a Supervisory Rigging Operations Specialist at the Naval Foundry and Propeller Center (NFPC), at the Norfolk Naval Shipyard (NNSY) in Philadelphia, PA, which required him to establish residency in Philadelphia in order to accept the position. On June 28, 2017, the claimant requested a relocation incentive for the move from Pittsburgh to Philadelphia. On September 15, 2017, an authorized agency official (AAO), approved a one-time lump-sum relocation incentive with a two-year service agreement for the claimant in the amount of $10,000. The claimant accepted Navy’s formal offer of employment on October 17, 2017 and entered on duty October 29, 2017. On January 25, 2018, the claimant submitted proof of his residency in Philadelphia and on February 27, 2018, the agency provided the claimant the relocation incentive service agreement to review and sign. The claimant did not agree with the agency’s two-year service agreement, and did not sign, stating he was only agreeable to a one-year service agreement. No subsequent service agreements were offered to the claimant by the agency. However, on April 6, 2018 the claimant signed and submitted to the agency a version of the service agreement, which he had modified to reflect payment in the amount of $2,500.00, to be paid in installment payments. At the same time, he informed the agency he would soon be leaving his position and submitted his request for 25 percent of the $10,000 relocation incentive as compensation for his period of service. The claimant officially retired on May 12, 2018, without receiving relocation incentive pay.
The claimant believes the agency violated title 5, Code of Federal Regulations (5 CFR), part 575 concerning relocation incentives because it did not inform him of the details on the length of the service agreement period prior to his first day of duty with the agency. He also believes the agency’s actions constitute an “unfair labor practice” (ULP).
The agency asserts the claimant is not entitled to any portion of the relocation incentive because he declined to sign the original agreement offered. The agency further asserts the modified service agreement, signed only by the claimant and submitted to the agency on April 6, 2018, is invalid and nonbinding.
Chapter 57, subchapter IV, of title 5, United States Code (U.S.C.), and 5 CFR part 575, subpart B, establish the conditions for, and authorize the payment of, relocation incentives to eligible Federal employees. Pursuant to 5 U.S.C. 5753(b), OPM may authorize the head of an agency to pay a relocation incentive to an individual who relocates to accept a position that is likely to be difficult to fill absent such incentive. Section 5753 requires that “the employee [enter] into a written service agreement to complete a period of employment with the agency, not longer than 4 years.” 5 U.S.C. 5753(c)(1).
OPM has promulgated regulations governing the payment of relocation incentives for federal employees in part 575, subpart B, of title 5 CFR. Specifically, 5 CFR 575.201 provides that:
This subpart contains regulations implementing 5 U.S.C. 5753, which authorizes payment of relocation incentives. An agency may pay a relocation incentive to a current employee who must relocate to accept a position in a different geographic area under the conditions specified in this subpart provided the agency determines that the position is likely to be difficult to fill in the absence of an incentive.
5 CFR 575.205(b) states, in relevant part:
…In all cases, the employee must establish a residence in the new geographic area before the agency may pay a relocation incentive to the employee. A relocation incentive may be paid only if the employee maintains residency in the new geographic area for the duration of the service agreement.
5 CFR 575.207(b)(1) states, in relevant part:
…the [AAO] must review and approve the relocation incentive determination before the agency pays the incentive to the employee.
5 CFR 575.208(a)(3) states:
The agency must make the determination to pay a relocation incentive before the employee enters on duty in the position to which relocated.
5 CFR 575.209(a) states, in relevant part:
An [AAO] must establish the criteria for determining the amount of a relocation incentive. An agency may pay a relocation incentive -
(1) As an initial lump-sum payment at the commencement of the service period required by the service agreement;
(2) In installments throughout the service period required by the service agreement;
(3) As a final lump-sum payment upon the completion of the full service period required by the service agreement; or
(4) In a combination of these payment methods.
5 CFR 575.210(a) and (c) state, in relevant part:
(a) Before paying a relocation incentive, an agency must require the employee to sign a written service agreement to complete a specified period of employment with the agency… at the new duty station.
(c) The service agreement must specify the total amount of the incentive, the method of paying the incentive, and the timing and amount of each incentive payment, as established under §575.209.
As stated, the claimant believes the agency had an obligation to inform him about the two-year service agreement period prior to his first day of duty. He relies on 5 CFR 575.208(a)(3) and 5 CFR 575.207(b)(1) to support his claim. He states:
“…I should have been provided a copy of this approved agreement and most importantly the opportunity to review the terms of this agreement…the HRO should have given me the terms of the relocation incentive before I officially accepted the position…the agency having that information and then not providing it would be perceived by any reasonable standard [as] an unfair labor practice…OPM indicates ‘the determination to pay a relocation incentive must be made before the employee enters on duty in the position at the new duty station [section 575.208(a)(3)]…the AAO must review and approve the relocation incentive determination before the agency pays the incentive to the employee…[section 575.207(b)(1)]’”
Section 575.208(a)(3), cited above, requires an agency to make the determination to pay a relocation incentive prior to the employee’s first day of work in the position to which the relocation incentive has been authorized. Section 575.207(b)(1), cited above, requires an AAO to have reviewed and approved the relocation incentive determination before the agency pays the incentive to the employee. The agency met these requirements when the AAO reviewed and approved the $10,000, two-year service period relocation incentive request on September 15, 2017, well in advance of the claimant’s first day of duty.
The rule formulated under 5 CFR 575.210(a) provides that before paying a relocation incentive, an agency must require the employee to sign a written service agreement to complete a specified period of employment with the agency. The record is clear that the agency never received a signed agency-approved service agreement in accordance with 5 CFR 575.210(a). Here, the claimant declined to sign the service agreement offered by the agency on February 27, 2018, and no subsequent service agreements were offered or approved by the agency, including the claimant’s altered service agreement, dated April 6, 2018. Under the provisions of 5 CFR 575.209(a) and 5 CFR 575.210(c), the authority to establish the terms of a service agreement rest with the AAO and not with an employee. Since the terms described in the April 6, 2018 service agreement were established by the claimant and not the AAO, the service agreement is not valid and the agency is not obligated to comply with its terms. As such, the claimant is not entitled to any relocation incentive payment, and the claim is denied.
Equally important, 5 CFR 575.205(b) requires an employee to establish residency in the geographic area of the new position and maintain residency in the area for the duration of the service agreement before an agency may pay a relocation incentive. The record shows that the claimant established residency in the new geographic area on January 25, 2018, which is after the service agreement start date of October 29, 2017. In addition, he officially retired from Federal service on May 12, 2018, and then established residency in Mystic, CT, before the end of the service period Therefore, even assuming arguendo an authorized and approved service agreement existed between the agency and the claimant, which it did not, the provisions of 5 CFR 575.205 were not fully met and the claimant was therefore ineligible to receive a relocation incentive.
The claimant’s assertion that the agency withheld information and by doing so committed a ULP is inapplicable to this claim. The labor relations statute, found at 5 U.S.C. 7116, creates rights and obligations on the part of unions, management, and employees. If either labor or management fails to perform its obligation to the other party, a ULP charge may be filed. OPM’s statutory authority to adjudicate Federal employee compensation claims under 31 U.S.C. 3702 does not extend to settling ULP disputes. Therefore, this claim is denied based on lack of jurisdiction.
Under 5 CFR 178.105, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment. Joseph P. Carrigan, 60 Comp. Gen. 243,247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979). However, as discussed in this decision, the claimant has failed to do so. Since an agency decision made in accordance with established regulation, as is evident in this case, cannot be construed as arbitrary, capricious, or unreasonable, there is no basis upon which to reverse the agency’s decision. For the foregoing reasons, the claim is denied.
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 United States court.