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Policy, Data, Oversight Pay & Leave

Washington, DC

U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code

[Claimant]
Office of Administrative Law Judges
Federal Energy Regulatory Commission
U.S. Department of Energy
Washington, DC
Student Loan Repayment Program debt waiver
Denied
Denied
20-0018

Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance



04/27/2021


Date

The claimant was a Federal civilian employee of the Office of Administrative Law Judges, Federal Energy Regulatory Commission (FERC), U.S. Department of Energy (DOE), in Washington, DC, during the claim period.  She requests the U.S. Office of Personnel Management (OPM) grant her a debt waiver in the amount of $5,160.  We received the claim on August 14, 2020, the agency administrative report (AAR) on October 21, 2020, and the claimant’s comments to the AAR on November 23, 2020.  For the reasons discussed herein, the claim is denied.

The claimant began her Federal service employment with the FERC as a Legal Assistant in June 2015.  In August 2016, she was promoted to a Paralegal Specialist position in the Chief Judge’s Office and her supervisor recommended her for Student Loan Repayment Program (SLRP) benefits.  On October 31, 2016, the authorized agency official approved SLRP benefits in the amount of $5,160.00, under a service agreement stipulating that the claimant would complete a 3-year service obligation period beginning on October 31, 2016 and ending on October 31, 2019.  On September 10, 2019, the claimant submitted a letter of resignation to the agency with an effective date of September 27, 2019.  Thereafter, the claimant received a debt collection letter, dated October 8, 2019, from the FERC stating that because of her voluntary separation prior to the service obligation completion date, she owed the FERC $5,160.  The claimant subsequently submitted a SLRP waiver request, dated October 29, 2019, to the FERC’s Office of the Executive Director, which was denied. 

The claimant asserts paying the debt would be an injustice and a financial burden to her because “[the agency] will be receiving the total amount of 11 months of SLRP payments for 28 days of early separation.”  To support her claim for the debt waiver, the claimant invokes the substantial performance contract law doctrine.  She states, “Substantial Performance… fulfills the essential purpose of the contract so that, even if the performance does not precisely match the terms of the agreement, the performance will be considered complete.”  The claimant cites Plante v. Jacobs, 10 Wis. 2d 567, 103 N. W.2d 296, 1960 Wisc. as an example of a court applying the substantial performance concept.  In her case, the claimant states she gave the FERC 1,067 of 1,095 workdays for “paying 11 months of [her] student loans.”  She further states that she was on active-duty military orders prior to leaving the FERC and thought she completed her service obligation in August 2020. 

As an initial matter, section 7121(a)(1) of 5 U.S.C. directs that except as provided elsewhere in the statute, the grievance procedures in a negotiated collective bargaining agreement (CBA) shall be the exclusive administrative remedy for resolving matters that fall within the coverage of the CBA.  The Court of Appeals for the Federal Circuit has found the plain language of 5 U.S.C. 7121(a)(1) to be clear, and as such, limits the administrative resolution of a Federal employee’s grievance to the negotiated procedures set forth in the CBA.  Mudge v. United States, 308 F.3d 1220, 1228 (Fed. Cir. 2002).  Further, the Federal Circuit also found that all matters not specifically excluded from the grievance process by the CBA fall within the coverage of the CBA.  Id. at 1231.  As such, OPM cannot assert jurisdiction over the compensation claims of Federal employees who are or were subject to a negotiated grievance procedure (NGP) under a CBA between the employee’s agency and labor union for any time during the claim period, unless the matter is or was specifically excluded from the CBA’s NGP.  See 5 CFR 178.101(b) and 5 CFR 551.703(a). 

Documentation obtained by OPM shows a probability that the claimant occupied a bargaining unit position during the claim period.  In its AAR to OPM, the agency states “[claimant] was covered by the collective bargaining unit; however, she did not go through the grievance process.”  The agency also submitted the Labor-Management Agreement between the Federal Energy Regulatory Commission and the American Federation of Government Employees Local No. 421, AFL-CIO, dated June 6, 2002.  In response to the agency’s statement, the claimant wrote “While it is true that I was covered under the collective bargaining unit while I was employed…[the agency] is mistaken that I was covered under the collective bargaining unit when I was informed I was in breach of the contract on 8 October 2019.”  An employee’s bargaining unit status is identified in box #37 on the applicable Standard Form 50 (SF-50).  Here, neither the claimant nor the agency provided an SF-50, nor was OPM able to obtain one.  As a consequence, we are unable to verify the claimant’s bargaining unit status during the claim period.  Therefore, the claim cannot legitimately be construed as covered by the NGP the claimant may have been subject to during the claim period and as a result OPM is unable to validate whether it lacks jurisdiction over the claim.  Nonetheless, we may deny the claim based on a lack of authority as demonstrated below. 

The Federal SLRP permits agencies to repay Federally insured student loans as a recruitment or retention incentive for candidates or current employees of the agency.  The program implements title 5 United States Code (U.S.C.) section 5379, which authorizes agencies to set up their own student loan repayment programs to attract or retain highly qualified employees.  An employee receiving this benefit must sign a written service agreement to remain in the service of the paying agency for a period of at least 3 years.  5, U.S.C. 5379(c)(1), provides:

(c)(1) An employee selected to receive benefits under this section must agree in writing, before receiving any such benefit, that the employee will-

(A) remain in the service of the agency for a period specified in the agreement (not less than 3 years), unless involuntarily separated; and

(B) if separated involuntarily on account of misconduct, or voluntarily, before the end of the period specified in the agreement, repay to the Government the amount of any benefits received by such employee from that agency under this section.

In conjunction with this statute, title 5, CFR 537.107(e) concerns written service agreements and states:

(e) The service agreement must contain a provision addressing whether the individual would be required to reimburse the paying agency for student loan repayment benefits if he or she voluntarily separates from the paying agency to work for another agency before the end of the service period.  (See §537.109(b)(2).)

The language in 5 USC 5379(c)(1), makes clear than an employee must reimburse the paying agency for all benefits received if he or she is separated voluntarily or involuntarily for misconduct, unacceptable performance, or a negative suitability determination.  An examination of the service agreement in the record, which the claimant agreed to and signed, shows consent to the following terms.

“I understand I am required to remain employed with the Federal Regulatory Commission for a minimum period of three (3) years, or for a greater period of service as specified above.  The service period begins when the Chief Human Capital Officer (ED-40) approves and signs the request.”

“I further understand that separation from the Federal Energy Regulatory Commission to accept employment with another entity, including the Federal Government, obligates me to repay the referenced debt.”

The facts reveal the claimant entered into a written service agreement with the agency, yet she voluntarily separated from the agency before completing the required service period.  The claimant does not dispute this.  The actual request to OPM is for forgiveness of the debt, as she writes “I humbly request OPM to reconsider the decision made by FERC and grant me a full waiver of repaying the $5,160 owed to the FERC.”  After giving careful consideration to the claimant’s assertions and request, we conclude we have no authority to grant the waiver.  5 USC 5379(c)(3), provides “The head of an agency concerned may waive, in whole or in part, a right of recovery [of student loan repayments] if it is shown that recovery would be against equity and good conscience or against the public interest.”  The language in the statute grants waiver authority only to the head of the agency.  As such, OPM lacks authority to grant the waiver requested and therefore we do not find a basis for disturbing the agency’s decision.  Accordingly, the claim is denied.      

As to the substantial performance claim, which falls under common law, Federal employees, like the claimant, derive the benefits of their positions from appointment rather than from any contractual or quasi-contractual relationship with the government.  Chu v. United States, 773 F.2d 1226, 1229 (Fed. Cir. 1985); accord 2007-5107 11 Adams v. United States, 391 F.3d 1212, 1221 (Fed. Cir. 2004); Collier v. United States, 379 F.3d 1330, 1331 (Fed. Cir. 2004); Schism v. United States, 316 F.3d 1259, 1274-75 (Fed. Cir. 2002) (en banc); Hamlet v. United States, 63 F.3d 1097, 1102 (Fed. Cir. 1995); Zucker v. United States, 758 F.2d 637, 640 (Fed. Cir. 1985).  Therefore, any benefits extended to the claimant does not constitute a contract and does not create an entitlement not otherwise permitted by statute and its implementing regulations.  See OPM File Numbers 13-0001, December 24, 2013, and 15-0017, June 6, 2015.    

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.

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