Petition — United States v. Clark

80-1122 |. ricco |

No. JAN 5 198;

JR., CLERK |

In the Supreme Court of the Uurited

OCTOBER TERM, 1980

UNITED STATES OF AMERICA, PETITIONER

Ua

JOSEPH J. CLARK, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF CLAIMS

WADE H. MCCREE, JR.

Solicitor General

ALICE DANIEL

Assistant Attorney General

MARK I. LEVY

Assistant to the Solicitor General

L0BERT S. GREENSPAN

FREDERIC D. COHEN

Attorneys

Department of Justice

Washington, D.C. 205380

(202) 633-2217

Iu the Supreme Court of the Hnrited States

OCTOBER TERM, 1980

No.

UNITED STATES OF AMERICA, PETITIONER

v.

JOSEPH J. CLARK, ET AL.*

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF CLAIMS

QUESTION PRESENTED

Whether 5 U.S.C. 5334(b), which entitles a pro-

moted or transferred government employee to an

automatic two-step increase in pay, is applicable to

promotions and transfers from positions in the

prevailing-rate Wage System (WS) to positions in the

General Schedule (GS).

*The original plaintiffs in this action were Joseph J. Clark,

Frank D’Aversa, Nicholas J. Libretto, Nicholas J. Proto, Carlo

Scialpi, and Albert Wolfus. Clark and Proto are now deceased;

they are represented herein by their widows, Margaret Devine

Clark and Annette Kurtzman Proto.

I

Ill

TABLE OF CONTENTS

Page

ET Cok s. i iebeses cath ce tecceceeaseeses l

CE <i Ge Tu v so wnbh dccccesvecesecsacgenss l

Statutes and regulations involved ................. 1

DM CUcDi ls tes sebitesbececcessoectessaeée l

Reasons for granting the petition ................. 7

ca belt Was ch abetseveceededvenseos 17

TABLE OF AUTHORITIES

Cases:

Andrus vy. Shell Oil Co., No. 78-1815 (June 2,

Sits 6 biskid Sens 0s 646000006 00000 meso 008 11-12

Apex Hosiery Co. v. Leader, 310 U.S, 469 .... 12

Board of Governors of the Federal Reserve

System v. First Lincolnwood Corp., 439

PCD Soc Vasbadstcgcesocvcccccecoceoces 12

Consumer Products Safety Commission v.

GTE Sylvania, Inc., No. 79-521 (June 9,

NTE s 6 cccbnpedewes cocsoscccosececsons 7

E. 1. duPont de Nemours & Co. v. Collins, 432

Es TAREE D Soc ccccscccccescesscoeees 11

Lewis v. United States, 445 U.S. 55 .......... 7

Norwegian Nitrogen Co. v. United States, 288

MT ckiceab st cecessascccusepenacedes 12

Red Lion Broadcasting Co. v. FCC, 395 U.S.

DSU S svi Vegas chcasebrcovescscssonsecse 11, 12

Seatrain Shipbuilding Corp. v. Shell Oil Co.,

MEE ED Behn ec dvecsrcccccccocccesecee 12

Touche Ross & Co. v. Redington, 442 U.S.

DS owcs wkanebbigab ode sdeobeccecsseveocesies 7

United States v. Rutherford, 442 U.S. 544.... 12

Zenith Radio Corp. v. United States, 437 U.S.

IV

Statutes and regulations: Page

Back Pay Act, 5 U.S.C. 5696 ........ceecseee 5

Civil Service Reform Act of 1978, Pub. L. No.

95-454, 92 Stat. 1111, 5 U.S.C. (Supp. ITD

BRON OP ROR. Sccccccanececredccscveccecoene 3

Classification Act of 1949, ch. 782, Pub. L. No.

429, 63 Stat. 954, 5 U.S.C. (1952 ed.) 1071 et

seq.:

Section 202(7), 5 U.S.C. (1952 ed.)

ES OO eer Peer errs re 10

Section 802(b), 5 U.S.C. (1952 ed.)

SE Secdee ab acnsss odudiue dauwevds 10

Federal Pay Comparability Act of 1970, 5

SU ME WiGsa ch eos ae6.ssente obeaese hs 8 2

Tucker Act:

BP ds SUE oc su cc poccvcesevesxedes 16

PP Rare BOE Waeies.csagecrscesecceston 5

Pub. L. No. 87-793, Section 604(a), 76 Stat.

847, 5 U.S.C. (1964 ed.) 1132(b)............ 12, 13

Pub. L. No. 92-392, 86 Stat. 564 ............. 14

ares Ee WOES cab pelsecs cceebnene 1, 3, 14

© UB. GREE) GMA) oo cece cccccvccoces 2

5 U.S.C. (& Supp. IIT) 5343 ............. 3

BGC, BRN) CPs ec ckcccsgovcdontovcs 9, 14

DE Gs MOUNT TED din oscceuesksceseces 2, 8-9, 17a

es MD ass dat duc dkweseecccduenee ts 2

Sere I a Odi wikis so0cds vcoteeesansepe 15

Sas WOOD CED ce svivocsescccvvessneas 2, 17a

SAM ME kb hae Uatdave vaveesbaeecinboetis 2

FR PN W's Nake 6d00sstchubwbdecdcces 2

5 U.S.C. (& Supp. III) 5331 et seq.: ...... 1, 2, 18a

DP as Maha s ss dcceecsoceseds 8-9, 18a

5 U.S.C. (& Supp. IIT) 5332 ............. 2

5 U.S.C. (& Supp. IIT) 5334(a)........... 7,8, 14

5 U.S.C. (Supp. IID 5334(b)..... passim, 19a

DUBS. GORD eo vicse cc cccecccccccvapecese 8

V

Statutes and regulations— Continued: Page

PPAR EE See edi ceics citeaurascaeceh ends ll

og BS On) EAN ae A ees 15

ME Ris Ta Cees bona pes abe ah eacdenae’ ll

5 C.F.R. 25.103(b), 15 Fed. Reg. 1235 (1950) .. 10

5 C.F.R. 25.104(a), 15 Fed. Reg. 1236 (1950) .. 10

5 C.F.R. 25.104(a), 15 Fed. Reg. 7868 (1950) .. 10

5 C.F.R. 25.104(a), 25 Fed. Reg. 7147

GEPOPP REDS ev cbcrebsvconstoccnduavevecss 10-11

DOF cles BORO) CB) Sec cccvccccvecicecs 9, 19a-20a

EN chs RET a Sv slesice es cpievcsecec dy GO ae

5 C.F.R. 531.204(a), 38 Fed. Reg. 12450

CRONE Up NECN c PU UED Sos eeceeccebnesess 11

5 C.F.R 531.204(a) (1), 28 Fed. Reg. 10948

SMES Cdenhidesehdawetkeodsace sacrernesas ll

PR ae SY CEP beso vcccescscane ties 6, 20a

Miscellaneous:

Civilian Manpower Management Instruction

DOR tee UNC BG, 1974)... cc cccccccescccceces 4

53 Comp. Gen. 606 (1078)... 0c cccccceccvvecs ll

58 Comp. Gen. 200 (1980) .....cecsscccccccees ll

Comp. Gen. opinion B-172706.05 (KM)

(Dec. 30, 1975) (unpublished) .............. 11

Comp. Gen. opinion B-1727062(Apr. 19, 1972)

PN Pd sided Cy iniite e gnaw o¥ainebes ll

Federal Personnel Manual System, Federa/

Wage System, Supplement 532-1:

Subchapter S8-2a (7) (Apr. 14,

DUT KvatCnas seseel sudiensreedenan 9, 20a-2la

Subchapter S8-3e (Inst. 17 Apr. 14,

DRE ca LS RPGEC Bae cdb-scceboursuee 9, 2la

Subchapter S8—3d (Inst. & Jan. 16,

MU Ga Lah ste Okees ba cdee sues 4, 9, 2la-22a

Subchapter S8-3d (Inst. 17 Apr. 14,

SE Ven eUsh a niekdecveasccavcevaseues 4

VI

Miscellaneous—Continued: Page

C. Goodman, Handbook on Public Personnel

EE ata nS ee Sn a a Spee > a Sa 2

Hearings on Formula for Guaranteeing a

Minimum Increase When an Employee Is

Promoted Before the House Comm. on Post

Office & Civil Service, 87th Cong., Ist Sess.

DEP LSSEMG SSC Necsdivdnossicceccuccsone 12-13

H.R. 1010, 87th Cong., Ist Sess. (1961) ....... 13

H.R. 2015, 87th Cong., Ist Sess. (1961) ....... 13

H.R. Conf. Rep. No. 2532, 87th Cong., 2d Sess.

PC CULUC ust RU cuhe bese nasseced0peebns 13

H.R. Rep. No. 92-339, 92d Cong., Ist Sess.

PCE aa tees ecbk dus ev eeees eeveneses 14

S. Rep. No. 92-791, 92d Cong., 2d Sess.

Me deardl tea Cu besoscebedccndass cores 14

S. Rep. No. 2120, 87th Cong., 2d Sess.

PPS CNET Ts LWAeRadoacwcbeccececcenvases 13

U.S. Bureau of the Census, Statistical Abstract

of the United States: 1979 oo cc ccc cece eens 2

‘R. Vaughn, Principles of Civil Service Law

DM ietae cade 4504064600 o reese ebecenees 2,3

The Solicitor General, on behalf of the United

States, petitions for a writ of certiorari to review the

judgment of the United States Court of Claims in this

case.

OPINIONS BELOW

The opinion of the Court of Claims on the issue of

liability (App.. A, infra, la-8a) is reported at 599 F.2d

411. The order of the Court of Claims determining the

amount of respondents’ recovery (App. B, infra, 9a-

14a) is unreported.

JURISDICTION

The opinion of the Court of Claims on the issue of

liability was rendered on May 16, 1979. A timely peti-

tion for rehearing was denied on September 28, 1979

(App. C, infra, 15a-16a). The judgment of the Court

of Claims awarding monetary recovery to respondents

was entered on August 8, 1980 (App. B, infra, 9a). On

October 28, 1980, the Chief Justice extended the time

for filing a petition for a writ of certiorari to and in-

cluding January 5, 1981. The jurisdiction of this Court

is invoked under 28 U.S.C. 1255. See United States v.

Clark, 445 U.S. 28, 26 n.2 (1980).

STATUTES AND REGULATIONS PROVISIONS.

INVOLVED

The pertinent statutory and regulatory provisions

are set forth in Appendix D, infra, 17a-22a.

STATEMENT

1. This case involves two of the principal pay sys-

tems for federal employees—the General Schedule

(GS), 5 U.S.C. (& Supp. III) 5331 et seqg., and the

prevailing-rate Wage System (WS), 5 U.S.C. (& Supp.

III) 5341 et seq.

1

2

Except as otherwise provided, “all civilian positions

and employees in or under an agency” fall within the

General Schedule. 5 U.S.C. 5102(b); see also 5 U.S.C.

5331. The General Schedule covers most federal

white-collar positions. See R. Vaughn, Principles of

Civil Service Law § 6.2(a), at 6-4 (1976). There are

approximately 1.4 million full-time employees in the

General Schedule. See U.S. Bureau of the Census,

Statistical Abstract of the United States: 1979, at 279,

Table No. 466 (1979) (“1979 Statistical Abstract”).

The General Schedule comprises 18 grades. See 5

U.S.C. 5104, 5332. A grade

includes all classes of positions which, although

different with respect to kind or subject-matter of

work, are sufficiently equivalent as to—

(A) level of difficulty and responsibility; and

(B) level of qualification requirements of

the work; Jto warrant their inclusion within

one range of rates of basic pay in the General

a-—\Schedule.

5 U.S.C. 5102(a)(5); see also 5 U.S.C. 5106(b). In turn,

each grade is divided into rates of pay, or steps. See 5

U.S.C. 5332. GS salaries are determined pursuant to

the principles of comparability set forth in the Federal

Pay Comparability Act of 1970. See 5 U.S.C. 5301.

The salary level for a given GS grade and step is uni-

form nationwide. See 5 U.S.C. 5332.

In contrast to the General Schedule, the Wage Sys-

tem is applicable to federal blue-collar workers. See 5

U.S.C. 5342(a)(2)(A); C. Goodman, Handbook on

Public Personnel Law 147 (1978); Vaughn, supra,

§ 6.2(b), at 6-17. By definition, WS positions are

excluded from the General Schedule. See 5 U.S.C.

5102(c) (7), 5331, 5342(1)(2)(A). The wage System en-

compasses approximately 462,000 full-time employees.

See 1979 Statistical Abstract, supra, at 279, Table No.

3

466. Rates of pay under the Wage System are based on

a wage survey of prevailing rates for comparable work

in the local wage area. See 5 U.S.C. 5341, 5343. Thus,

unlike the General Schedule, WS rates are determined

for each locality and vary across the country.

2. Respondents are six present and former employ-

ees of the Supervisor of Shipbuilding, Conversion and

Repair, Department of the Navy. Between July 1973

and October 1974, they were promoted from positions

in the prevailing-rate Wage System to positions under

the General Schedule.

Incident to these changes in position, respondents’

salaries were calculated pursuant to the provisions of

the General Schedule. However, two inconsistent

methodologies were used in making those calculations.

With respect to respondent Libretto, the Civil Service

Commission (CSC) “highest previous rate” rule was

applied. That rule provides that

when an employee is reemployed, transferred,

reassigned, promoted, or demoted, the agency

may pay the employee at any rate of the grade

which does not exceed his or her highest previous

rate; however, if the employee’s highest previous

rate falls between two rates of his or her grade,

the agency may pay him or her at the higher rate.

5 C.F.R. 531.203(c) (App. D, infra, 20a).2 Respondent

Libretto’s highest previous rate fell between two steps

of his new GS grade and, in accordance with general

'The history of the Wage System is discussed in Vaughn,

supra, § 6.2(b), at 6-18 to 6-20.

2In 1978, the Civil Service Commission was succeeded by the

Office of Personnel Management (OPM). See Civil Service Re-

form Act of 1978, Pub. L. No. 95-454, 92 Stat. 1111, 5 U.S.

(Supp. III) 1101 et seq.

d

Navy policy,* he was given the higher salary level. In

this way, respondent Libretto received a salary in-

crease upon his appointment to the General Schedule.

The GS salaries of the other respondents were de-

termined by first applying the provision of Subchapter

S8-3d of the CSC Federal Personnel Manual System

(FPM), Federal Wage System, Supplement 532-1

(Inst. 8, Jan. 16, 1973) (App. D, infra, 21la-22a), which

stated that an employee promoted to a Wage System

position is entitled to be paid at the lowest scheduled

rate that exceeds his existing rate of pay by no less

than a one-step increment of the category from which

he was promoted.* Once this adjustment had been

made, the new GS salaries of these respondents were

computed by applying the “highest previous rate” rule

of 5 C.F.R. 531.203(c) to the adjusted rates of pay.

Thus, each of these respondents was awarded two sal-

ary increases for a single promotion. This method of

computation was in error, because Subchapter S8-3d

and the “highest previous rate” rule of 5 C.F.R.

531.203(c) are not applicable to the same personnel ac-

tion; Subchapter S8-3d covers promotions to a WS:po-

sition, while the “highest previous rate” rule pertains

to promotions from a WS position to a GS position.

In November 1974, respondent Libretto filed an ap-

peai with the Navy, claiming that he was entitled to

“By regulation, the Navy has elected to place employees at

the higher of the two GS rates in all cases where it serves the

interest of the government. See Civilian Manpower Manage-

ment Instruction 531.82 (June 26, 1974).

‘This section was recently amended to provide for an increase

of 4% of the representative rate of the previous grade instead of

a one-step increase. See Federal Personnel Manual System,

Federal Wage System, Supplement 532-1, Subchapter S8-3d

(Inst. 17, Apr. 14, 1980). This amendment does not affect the

question presented herein.

5

the higher GS salary received by the other re-

spondents. The Navy rejected this contention on the

ground that respondent Libretto’s GS salary had been

properly determined. The Navy also concluded that

the salaries of the other respondents were erroneous,

and accordingly it notified them that their salaries

would be reduced to the correct levels based on the

formula utilized in the case of respondent Libretto

(App. A, infra, 2a).

Respondents unsuccessfully pursued their adminis-

trative remedies, and on January 29, 1976, they com-

menced this suit in the Court of Claims under the

Tucker Act (28 U.S.C. 1491) and the Back Pay Act (5

U.S.C. 5596). Respondents contended that they were

entitled to a two-step increase pursuant to 5 U.S.C.

5334(b), which reads in pertinent part (App. D, infra,

19a):

An employee who is promoted or transferred to

a position in a higher grade is entitled to basic pay

at the lowest rate of the higher grade which ex-

ceeds his existing rate of basic pay by not less

than two step-increases of the grade from which

he is promoted or transferred.

Respondents sought an award of back pay and a cor-

rection of their employment records in accordance with

Section 5334(b).5

5On its face, 5 U.S.C. 5334(b) entitles the employee to a GS

salary that “exceeds his existing rate of basic pay by not less

than two step-increases of the grade from which he is promoted

or transferred” (emphasis added). Thus, the Court of Claims

clearly misunderstood the operation of Section 4334(b) when it

stated (App. A, infra, la n.1) that the statutory increase was

measured by two steps of the new grade to which the employee

was promoted rather than of the former grade from which he

was promoted. +

6

On cross-motions for summary judgment, the Court

of Claims held (App. A, infra, la-8a) that respondents

were entitled to a two-step salary increase under 5

U.S.C. 5334(b). Focusing on the word “promoted,” the

court found that Section 5334(b) is applicable to pro-

motions from the Wage System to the General Sched-

ule. In addition, relying on the fact that a promotion

within the GS system gives rise to a two-step increase,

and believing that “[aJn employee promoted within the

WS receives a comparable benefit; even an employee

promoted ‘criss-cross’ from GS to WS receives the

benefit” (App. A, infra, 7a), the court concluded that

Congress intended a like rule to apply to promotions

from the Wage System to the General Schedule (id. at

8a). Accordingly, the court invalidated, as inconsistent

with the statute, the OPM regulation that construed

Section 5334(b) to be limited to transfers or promo-

tions within the Generali Schedule:

The requirements of section 5334(b) of title 5,

United States Code, apply only (i) to a transfer

from one General Schedule position to a higher

General Schedule position, and (ii) to a promotion

from one General Schedule grade to a higher Gen-

eral Schedule grade.

5 C.F.R. 531.204(a)(i) (App. D, infra, 20a).

Based on this decision, the case was remanded to

the Trial Division of the Court of Claims for a deter-

mination of the total payment due each respondent.

The government’s motion for rehearing on the issue of

liability was denied (App. C, infra, 15a-16a). Thereaf-

ter, the parties stipulated to the amount of respond-

ents’ recovery, and final judgment was entered on Au-

gust 8, 1980 (App. B, infra, 9a-14a).

, 7

REASONS FOR GRANTING THE PETITION

The Court of Claims has held in this case that 5

U.S.C. 5334(b) requires a two-step salary increase for

all employees promoted from the prevailing-rate Wage

System to the General Schedule. In so holding, the

court ignored the plain language of the statute and dis-

regarded the contrary interpretation that the agencies

charged with administering Section 5334(b) have con-

sistently followed since the time of enactment. Be-

cause the Court of Claims’ ruling on this important

issue involving the pay of federal employees threatens

to impose substantial monetary liability on the United

States without congressional authorization, review by

this Court is warranted. In light of the manifest error

of the decision below, the Court may wish to consider

summary reversal of the judgment of the Court of

Claims.

1. This Court has repeatedly emphasized that “the

starting point for interpreting a statute is the language

of the statute itself. Absent a clearly expressed legis-

lative intention to the contrary, that language must

ordinarily be regarded as conclusive.” Consumer

Product Safety Commission v. GTE Sylvania, Inc.,

No. 79-521 (June 9, 1980), slip op. 5. See also, e.g.,

Lewis v. United States, 445 U.S. 55, 60 (1980); Touche

Ross & Co. v. Redington, 442 U.S. 560, 568 (1979).

Here, the language of the statute clearly indicates

that a two-step salary increase is not required for

promotions from the Wage System to the General

Schedule. By its terms, 5 U.S.C. 5334(a) provides

that, in the circumstances of this case, “(t]he rate of

basic pay to which an employee is entitled is governed

by regulations prescribed by the Office of Personnel

Management [formerly the Civil Service Commission]

8

in conformity with this subchapter and chapter 51 of

this title * * *” (App. D, infra, 18a).® Pursuant to this

authority and 5 U.S.C. 5338, the Civil Service Com-

mission promulgated the “highest previous rate” rule,

5 C.F.R. 531.203(c), to determine the new rate of pay

“when an employee is reemployed, transferred, reas-

signed, promoted, or demoted” in the General Schedule

(App. D, infra, 20a). Under this provision, the Navy

was authorized to pay each respondent “any rate of the

grade which does not exceed his or her highest pre-

vious rate; however, if the employee’s highest previous

rate falls between two rates of his or her grade, the

agency may pay him or her at the higher rate” (ibid.).

Thus, the General Schedule salary of each respondent

was properly computed to be the higher of the two GS

rates between which his highest previous rate fell.?

Contrary to the analysis of the Court of Claims, 5

U.S.C. 5334(b) does not compel a different result. Sec-

tion 5334(b) provides (App. D, infra, 19a) that “[aJn

employee who is promoted or transferred to a position

in a higher grade is entitled to basic pay at the lowest

rate of the higher grade which exceeds his existing

rate of basic pay by not less than two step-increases of

the grade from which he is promoted or transferred”

(emphasis added). Under 5 U.S.C. 5102(a)(5) and 5

U.S.C. 5331(a), the word “grade” is defined to include

(App. D, infra, 17a) “all classes of positions which

** * are sufficiently equivalent * * * to warrant their

inclusion within one range of rates of basic pay in the

- 6The Court of Claims agreed (App. A, infra, 3a n.4) that 5

U.S.C. 5334(a) is applicable to respondents’ promotion from the

Wage System to the General Schedule.

7Respondents have never challenged the particular calcula-

tions made under the “highest previovs rate” rule, but rather

have contended only that the rule is not applicable in this case at

all,

9

General Schedule” (emphasis added). Accordingly,

Section 5334(b) is expressly confined to promotions

from one GS position or grade to another, and thus it

is inapplicable to promotions, as in the present case,

from the Wage System to the General Schedule.®

Indeed, this has been the longstanding and consist-

ent interpretation of the statute by the agencies re-

*This conclusion is not altered, as the Court of Claims be-

lieved (App. A, infra, 5a-8a), by the fact that respondents may

be said to have been “promoted” from a WS position to a GS

position. In pertinent part, a “promotion” is defined to be “a

change of an employee, while continuously employed, from * * *

[a] lower rate paid under * * * [a non-GS system] to a higher

rate within a Genera! Schedule grade.” 5 C.F.R. 531.202(h)(2)

(App. D, infra, 19a-20a). Thus, respondents received a promo-

tion only because application of the “highest previous rate” rule

resulted in an increase in their basic rate of pay. However, for

purposes of 5 U.S.C. 5334(b), the salient inquiry is not whether

an employee received a promotion but whether the promotion

occurred within the General Schedule.

In addition, the Court of Claims erred in stating (App. A,

infra, Ta & n.13) that the government conceded that an em-

ployee promoted within the Wage System or from the General

Schedule to the Wage System is entitled to an increase “com-

parable” to the two-step increase provided by Section 5334(b)

for an employee promoted within the General Schedule. As the

government explained in its cross-motion for summary judg-

ment (page 11) and in its petition for rehearing en banc (pages

4-5), an employee promoted either within the Wage System or

from the General Schedule to the Wage System receives a one-

step increase pursuant to Subchapter S8-2a(7) and S8-3d of FPM

Supplement 532-1 (App. D, infra, 20a-22a; see also page

4 note 4, supra); an employee who is transferred or reassigned

but not promoted within the meaning of Subchapter S8-2a(7)

may receive an increase only in accordance with the “highest

previous rate” rule of Subchapter S8-3c (App. D, infra, 21a).

Moreover, these increases are not required by statute, but in-

stead have been established by OPM in the exercise of its dis-

cretion under 5 U.S.C. 5343(¢)(5). Thus, the court’s discussion

in this regard reflects a fundamental misunderstanding of the

Wage System.

10

sponsible for its administration. The provision for an

automatic salary increase now found in 5 U.S.C.

5334(b) was originally enacted in the Classification Act

of 1949, ch. 782, Pub. L. No. 429, Section 802(b), 63

Stat. 969-970, 5 U.S.C. (1952 ed.) 1132(b).® In first

implementing the Act, the Civil Service Commission

promulgated regulations providing that “[ajn employee

promoted, repromoted or transferred to a higher

grade between Classification Act positions, shall re-

ceive * * * [the automatic salary increase].” 5 C.F.R.

25.104(a), 15 Fed. Reg. 1236 (1950) (emphasis added).

Unless the promotion or transfer occurred within the

Classification Act system, it was subject to the “high-

est previous rate” rule applicable to “an employee who

is reemployed, transferred, reassigned, promoted, re-

promoted, or demoted * * *” from a different pay sys-

tem to a position under the Classification Act. See 5

C.F.R. 25.103(b), 15 Fed. Reg. 1235 (1950). Since

prevailing-rate positions were excluded from the Clas-

sification Act (see ch. 782, Pub. L. No. 429, Section

202(7), 63 Stat. 954-955, 5 U.S.C. (1952 ed.) 1082(7)),

an employee transferred or promoted from such a posi-

tion to a Classification Act position was covered by the

“highest previous rate” rule and was not entitled to an

automatic step increase in salary.

Subsequent revisions to the regulations have con-

sistently adhered to the construction that the step-

increase provision is inapplicable to transfers or pro-

motions from a prevailing-rate position to a Classifica-

tion Act or General Schedule position.'® Likewise, the

*This section initially provided for a one-step salary increase,

but it was amended in 1962 to specify a two-step increase. See

page 12, infra.

See, e.g., 5 C.F.R. 25.104(a), 15 Fed. Reg. 7868 (1950)

(“[aJn employee promoted, repromoted or transferred to a

higher grade between Classification Act positions or grades”);

11

General Accounting Office, which is authorized to set-

tle and adjust “[ajll claims and demands whatever

* * * against [the Government of the United States]”

(31 U.S.C. 71; see also 31 U.S.C. 72), has uniformly

recognized that the “highest previous rate” rule,

rather than the automatic step-increase provision,

governs transfers or promotions from a prevailing-rate

position to a Classification Act or General Schedule po-

sition. See, e.g., 59 Comp. Gen. 209 (1980); 52 Comp.

Gen. 695 (1973); unpublished Comp. Gen. opinion B-

172706.05 (KM) (Dec. 30, 1975); unpublished Comp.

Gen. opinion B-172706 (Apr. 19, 1972).

In disregarding these administrative authorities, the

Court of Claims piainiy erred by failing to heed the

“venerable principle that the construction of a statute

by those charged with its execution should be followed

unless there are compelling indications that it is wrong

***” BI. duPont de Nemours & Co. v. Collins, 432

U.S. 46, 54-55 (1977), quoting Red Lion Broadcasting

Co. v. FCC, 395 U.S. 367, 381 (1969). This principle is

particularly apt where, as here, there is a “longstand-

ing and consistent administrative interpretation”

(Zenith Radio Corp. v. United States, 437 U.S. 443,

450 (1978)) that “involves a contemporaneous construc-

tion of [the] statute by the [persons] charged with the

5 C.F.R. 25.104(a), 25 Fed. Reg. 7147 (1960) (“[t)he require-

ments of Section 802(b) of the [Classification] Act apply in re-

promotion actions and in transfers involving promotions be-

tween Classification Act grades”); 5 C.F.R. 531.204(a)(1), 28

Fed. Reg. 10948 (1963) (“{t]he requirements of Section 802(b) of

the [A]lct * * * apply in a transfer involving a promotion be-

tween Classification Act grades”); 5 C.F.R. 531.204(a), 33 Fed.

Reg. 12450 (1968) (“[t}he requirements of Section 5334(b) of title

5, United States Code, apply only (1) to a transfer from one

General Schedule position to a higher General Schedule position,

and (2) to a promotion from one General Schedule grade to a

higher General Schedule grade”).

12

responsibility of setting its machinery in motion” (An-

drus v. Shell Oil Co., No. 78-1815 (June 2, 1980), slip

op. 10, quoting Norwegian Nitrogen Co. v. United

States, 288 U.S. 294, 315 (1933)).

Moreover, judicial deference to the agency’s in-

terpretation of a statute is especially appropriate

“when Congress has refused to alter the administra-

tive construction.” Board of Governors of the Federal

Reserve System v. First Lincolnwood Corp., 439 U.S.

234, 248 (1978), quoting Red Lion Broadcasting Co. v.

FCC, supra, 395 U.S. at 381. “[O]nce an agency’s

statutory construction has been ‘fully brought to the

attention of the public and the Congress,’ and the lat-

ter has not sought to alter that interpretation although

it has amended the statute in other respects, then pre-

sumably the legislative intent has been correctly dis-

cerned.” United States v. Rutherford, 442 U.S. 544,

554 n. 10 (1979), quoting Apex Hosiery Co. v. Leader,

310 U.S. 469, 489 (1940). And, in examining the stat-

ute and its administrative construction, “the views of

subsequent Congresses * * * are entitled to significant

weight.” Seatrain Shipbuilding Corp. v. Shell Oil

Co., 444 U.S. 572, 596 (1980).

As originally enacted, the Classification Act re-

quired a one-step salary increase for pronioted em-

ployees (see page 10 and note 9, supra). In 1962, the

statute was amended to provide for a two-step in-

crease. See Pub. L. No. 87-793, Section 604(a), 76

Stat. 847-848, 5 U.S.C. (1964 ed.) 1132(b). The con-

gressional hearings preceding this legislation clearly

evince the understanding that the automatic step in-

crease was not applicable to employees promoted from

a prevailing-rate position to the General Schedule.

Thus, as Chairman Dulski stated in opening the hear-

ings, “(t]hese bills would provide a formula for guaran-

teeing employees under the Classification Act a

minimum salary increase when promoted from one

13

grade to another. The purpose of this legislation is to

require that, when a classified employee is promoted,

he will receive an increase in compensation that is

more realistic and more commensurate with the in-

creased responsibilities he must assume in the higher

grade.” Hearings on Formula for Guaranteeing a

Minimum Increase When a» Employee Is Promoted

Before The House Comm. on Post Office and Civil

Service, 87th Cong., lst Sess. 2 (1961) (emphasis

added).!! Representative Lesinski, the sponsor of one

of the bills, explained that “[uJnder present law, a

classified employee who is promoted or transferred to

a higher grade, in most cases, receives a pay increase

equal to at least a one-step increase in the grade from

which promoted. * * * The simple objective of [the

bill] is to make more realistic and more meaningful

promotions from one grade to a higher grade for em-

ployees under the Classification Act” (id. at 3; em-

phasis added). Similarly, O. Glenn Stahl, testifying on

behalf of the Civil Service Commission, emphasized

that “[w]e are speaking now only of employees whose

positions are subject to the Classification Act.

* * * [The bill is] limited to the Classification Act. It

has no applicability to jobs not under the Classification

Act” (id. at 6, 10). In a later discussion, Mr. Stahl

again stated that employees excluded from the Clas-

sification Act would not benefit from the bill (id. at 16,

17), reiterating that “[i]t is only applicable to employ-

ees under the Classification Act” (id. at 18).

The bills under consideration at the hearings—H.R. 1010,

87th Cong., Ist Sess. (1961), and H.R. 2015, 87th Cong., Ist

Sess. (1961)—were indistinguishable in terms of coverage from

the provision enacted into law as Section 604(a). See H.R. Conf.

Rep. No. 2532, 87th Cong., 2d Sess. 61 (1962); S. Rep. No. 2120,

87th Cong., 2d Sess. 25 (1962). However, while H.R. 1010, like

Section 604(a), called for a two-step increase, H.R. 2015 re-

quired that the salary be increased by the difference between

the minimum rates of the new grade and the former grade.

14

In 1972, Congress again considered the pay systems

for federal employees when it enacted Pub. L. No.

92-392, 86 Stat. 564, 5 U.S.C. 5341 et seq. The pur-

pose of this legislation was to codify and standardize

the prevailing-rate system, which had theretofore

been governed largely by administrative regulation

and practice. See S. Rep. No. 92-791, 92d Cong., 2d

Sess. 2 (1972); H.R. Rep. No. 92-339, 92d Cong., Ist

Sess. 6 (1971). Comparable to the authority granted by

5 U.S.C. 5334(a) with respect to the General Schedule,

the statute authorized the Civil Service Commission to

prescribe regulations under the Wage System “gov-

erning the administration of pay for individual employ-

ees on appointment, transfer, promotion, demotion,

and other similar changes in employment status.” 5

U.S.C. 5343(¢)(5). In adopting this provision, Congress

“intended to grant to the Commission the same au-

thority which it now has under 5 United States Code

5334 with respect to employees paid under the General

Schedule” (H.R. Rep. No. 92-339, supra, at 14). In

particular, it was contemplated that “(t]he Commis-

sion’s regulations [for the Wage System] may cover

matters such as * * * application of the highest pre-

vious rate rule * * *” (ibid.). Thus, Congress ex-

pressly approved the “highest previous rate” rule,

which the Commission had consistently used for more

than 20 years to determine the salary level of an em-

ployee transferred or promoted from a prevailing-rate

position to a GS position. This specific congressional

endorsement of the Commission’s practice is com-

pletely at odds with the Court of Claims’ conclusion

that the provision for an automatic two-step increase,

rather than the “highest previous rate” rule, was ap-

plicable to respondents’ prometions from the Wage

System to the General Schedule.

In sum, the Court of Claims’ construction of 5

U.S.C. 5334(b) is contrary to the unambiguous lan-

15

guage of the statute, the longstanding and consistent

administrative interpretation, and the understanding

of Congress.

2. The Court of Claims’ decision, if allowed to stand,

will impose substantial monetary liability on the

United States. Based on the decision below, the Gen-

eral Accounting Office has already received approxi-

mately 4300 claims that are conservatively estimated

to involve $22 million in back pay.!? Most of these

claims have been submitted by employees of the Navy,

the agency involved in this litigation, and GAO expects

that more than 10,000 claims will be made once the

Court of Claims’ decision is fully publicized. Moreover,

potential claimants are not limited to employees who

were promoted from the Wage System to the General

Schedule within the six-year limitations period pro-

vided by 31 U.S.C. 7la, but also include employees

whose salary during that time was affected by a pro-

motion that occurred more than six years before the

claim was filed. And, with respect to all timely claims,

the government’s liability would extend beyond salary

awards to various other items that are based on an

employee’s rate of pay, such as overtime compensa-

tion, differentials for night work or hazardous duty,

annuities and lump-sum payments for annual leave,

and government contributions to life insurance and re-

tirement funds.**

In addition, the decision of the Court of Claims is

not confined to former Wage System employees. 5

U.S.C. 5102(c) lists 25 other categories of federal em-

ployees that are outside the General Schedule, and

therefore these employees, like those in the Wage Sys-

12The recovery of the six respondents in this case exceeded

$36,600.

13Tndeed, almost 20% of respondents’ total recovery in this

case consisted of non-salary elements.

16

tem, have not previously been given the automatic

step increase of 5 U.S.C. 5334(b). Under the court’s

reasoning, however, such employees may now claim

the benefits of that provision. Furthermore, the Court

of Claims stated (App. A. infra, 7a), albeit errone-

ously (see page 9 note 8, supra} that promotions

within the Wage System and promotions from the

General Schedule to the Wage System also fall within

Section 5334(b).

Finally, the United States will be required to make

significant continuing expenditures to comply with the

Court of Claims’ interpretation of 5 U.S.C. 5334(b).

In light of the court’s construction of that provision,

the government is obligated to give an automatic two-

step increase to employees who are promoted in the

future. And, as the court made clear in invalidating

existing OPM regulations (App. A, infra, 8a), this ob-

ligation rests directly on the statute and cannot be

modified by administrative promulgation. '4

Pursuant to the Tucker Act (28 U.S.C. 1346(a),

1491), all subsequent suits involving salary increases

under Section 5334(b) may be brought in the Court of

Claims. A conflict among the lower courts therefore is

unlikely to develop. Thus, the panel decision in the in-

stant case, which the Court of Claims declined to re-

hear en banc, represents controlling precedent on the

'4Apart from the direct monetary liability imposed on the

United States, the Court of Claims’ decision will also result in a

serious administrative burden for the government to process the

thousands of claims involved. This burden will be particularly

onerous with respect to promotions occurring many years ago

that had an effect on payments to employees within the six-year

limitations period; in these cases, old (and often inactive) rec-

ords must be located or, if no longer in existence, reconstructed,

and the necessary computations carried forward over several

years in accordance with intervening changes in the personnel

systems.

17

issue in the absence of this Court’s intervention. Given

the manifest error of the ruling below and the substan-

tial and continuing monetary liability imposed on the

United States, the decision of the Court of Claims

should not go unreviewed.

CONCLUSION

The petition for a writ of certiorari should be

granted. The Court may wish to consider summary re-

versal of the judgment of the Court of Claims.

Respectfully submitted.

WADE H. MCCREE, JR.

Solicitor General

ALICE DANIEL

Assistant Attorney General

MARK I. LEVY

Assistant to the Solicitor General

ROBERT S. GREENSPAN

FREDERIC D. COHEN

Attorneys

JANUARY 1981

APPENDIX A

Yn the United States Court of Claims

No. 26-76

(Decided May 16, 1979)

JOSEPH J. CLARK, ET AL.

Uv.

THE UNITED STATES

Before KUNZIG, BENNETT, AND SMITH, Judges.

ON CROSS MOTIONS FOR SUMMARY JUDGMENT

KUNZIG, Judge, delivered the opinion of the court:

This civilian pay case of first impression involves the

proper salary rate for a person promoted from a Wage

System (WS) classification position to a General

Schedule (GS) position. Plaintiffs claim they are en-

titled to a salary rate set at an amount equal to two

step-increases.! The Government argues that this two

'The mechanics of the two step-increase is as follows: If the

employee’s rate in his old position was equal to a rate in the new

position, he would be paid at the rate two steps above the step

which was equal to his old rate.

If the employee’s rate in his old position fell between two

rates in the new position, he would be paid at the rate two steps

above the higher of the rates that his old rate fell between.

Thus an employee receives a minimum of two steps, but it

may be more if his old rate fell between two new rates.

la

2a

step-increase does not apply to promotions from a WS

position to a GS position. We agree with plaintiffs.

The six plaintiffs in this case are or were employed

on the staff of the Supervisor of Shipbuilding, Conver-

sion and Repair, Department of the Navy. Between

July 1973 and October 1974, all were promoted from

various positions under the prevailing rate system (or

WS) to positions covered under the GS. Plaintiff

LiBretto was employed as a Ship Surveyor, Grade 8,

level 4 of the WS, earning $7.92 per hour or $16,473.60

per year. His old salary fell between step 4 ($16,138)

and step 5 ($16,627) of the GS-11 scale to which he had

been promoted. His salary was set at a GS-11, step 5,

the higher of the two rates.

The other five plaintiffs had also been promoted?

from Ship Surveyor to GS positions. However, they

had received the benefits of two step-increases at the

time of their respective promotions.

LiBretto, believing he was entitled to a GS-11, step

7 (instead of a GS-11, step 5) filed a complaint. That

complaint touched off a Navy investigation into the

method of calculating LiBretto’s salary and the

salaries of others who had been promoted in a similar

manner. The Navy determined that it had correctly

calculated LiBretto’s salary and incorrectly calculated

the salaries of the other five plaintiffs. The five then

received a salary step downgrading in April 1975.

However, any possible withholdings to recoup the al-

leged overpayments have been deferred pending a re-

quest by plaintiffs for a waiver. Plaintiffs’ six-man

Group Grievance was unsuccessful, and they now have

2 All six plaintiffs were promoted following application, selec-

tion, and appointment under the Department of the Navy Merit

Promotion Program.

3a

filed a petition in this court. Defendant counterclaimed

for the alleged overpayments.*

We hold for plaintiffs.

This case turns on the meaning of 5 U.S.

and various regulations contained in 5 C.

531.

*Defendant’s counterclaim has been dismissed on its own mo-

tion, which was made after oral argument.

*Section 5334(a) states in pertinent part:

(a) The rate of basic pay to which an employee is entitled

is governed by regulations prescribed by the Civil Service

Commission in conformity with this subchapter and chap-

ter 51 of this title when—

(1) he is transferred from a position in the legisla-

tive, judicial, or executive branch to which this sub-

chapter does not apply;

(2) he is transferred from a position in the legisla-

tive, judicial, or executive branch to which this sub-

chapter applies to another such position;

(3) he is demoted to a position in a lower grade;

(4) he is reinstated, reappointed, or reemployed in

a position to which this subchapter applies following

service in any position in the legislative, judicial, or

executive branch;

(5) his type of appointment is changed;

(6) his employment status is otherwise changed; or

(7) his position is changed from one grade to

another grade.

The Civil Service Reform Act of 1978, Pub.L. No. 95-454, 92

Stat. 1111, substituted the “Office of Personnel Management”

for “Civil Service Commission.”

Although the word “promotion” does not expressly appear in

5334(a), it seems clear that it falls within one of the seven

categories, as the legislative history of an earlier version of this

subsection referred to promotion. See H.R. Rep. No. 1264, 81st

Cong., Ist Sess., reprinted in [1949] U.S. Code Cong. Ser.

2363, 2374-75.

53344

C. §

F.R. Part

4a

Section 5334(b) states in pertinent part:

(b) An employee who is promoted or trans-

ferred to a position in a higher grade is entitled to

basic pay at the lowest rate of the higher grade

which exceeds his existing rate of basic pay by not

less than two step-increases of the grade from

which he is promoted or transferred. . . .

Plaintiffs therefore argue that since it is undisputed

that they did receive “promotions,”® they are entitled

to a two step-increase under section 5334(b).

However, the Government points to 5 C.F.R.

§ 531.204(a),® a regulation which purports to limit the

above statute (§ 5334(b)) to promotions within the GS.

The Government further argues that plaintiffs’ salary

rate is governed by 5 C.F.R. § 531.203(c), which

states that:

. when an employee is reemployed, trans-

ferred, reassigned, promoted, or demoted, the

5Both plaintiffs and defendant have termed these actions

promotions. Furthermore, 5 C.F.R. § 531.202(h) states:

(h) “Promotion” means a change of an employee, while

continuously employed, from:

(1) One General Schedule grade to a higher General

Schedule grade; or

(2) A lower rate paid under authority other than

subchapter III of chapter 53 of title 5, United States

Code, to a higher rate within a General Schedule

grade.

Clearly, plaintiffs were promoted under the definition of

5 C.F.R. § 531.202(h)(2).

65 C.F.R. § 531.204(a)(1) reads:

(1) The requirements of section 5334(b) of title 5, United

States Code, apply only (i) to a transfer from one General

Schedule position to a higher General Schedule position,

and (ii) to a promotion from one General Schedule grade to

a higher General Schedule grade.

5a

agency may pay him at any rate of his grade which

does not exceed his highest previous rate; how-

ever, if his highest previous rate falls between

two rates of his grade, the agency may pay him at

the higher rate... .

We are, therefore, confronted with:

(1) a statute that says “promotions” entitle the em-

ployee to two step-increases (5 U.S.C. § 5334(b));

(2) a regulation that puts plaintiffs’ situation within

the definition of “promotion” (5 C.F.R. § 531.202

(h)(2) );

(3) another regulation that says that statutory en-

titlement of a “promotion” does not apply to plaintiffs’

situation (5 C.F.R. § 531.204(a)); and

(4) a regulation that says an agency can pay a “pro-

moted” employee at his existing rate, or, if he falls be-

tween two rates, at the higher rate (i.e., no step-

increases) (5 C.F.R. § 531.203(c)). The three regula-

tions, apparently contradictory among themselves and

with the statute, appear on three consecutive pages in

C.F.R. and are all within Part 531, Subpart B of 5

C.F.R.7

The Government attempts to argue that, at least to

these plaintiffs, the regulations do not conflict.

The old rates of all six plaintiffs fell between tw

GS-11 steps, and they received the higher of the two

rates.* Thus, all the plaintiffs in this case received

7Just how incredibly confusing the regulations were is cer-

tainly obvious since the Government paid five claimants, then

changed its mind, then refused to pay another, reneged on the

five, counterclaimed for a refund, and finally moved to dismiss

on its own counterclaim.

*Some plaintiffs had been promoted further prior to the April

1975 salary downgrading, and their current rate was therefore

adjusted.

6a

some increase in compensation due to their promo-

tions.

However, this theory of the Government’s does not

explain why the statutory entitlement to two step-

increases for a “promotion” does not apply to plaintiffs

since they have received a “promotion” under the defi-

nition used by both plaintiffs and defendant. (See note

5, supra.)

The concept of step-increases for promotions had its

origins in section 802 of the Classification Act of 1949,

ch. 782, 63 Stat. 954, 969. Section 802(a) of that Act is

almost identical to the current 5334(a) (see note 4,

supra). Section 802(b) contains language virtually the

same as the present 5334(b), except that the earlier

statute only provided for one step-increase.? Although

this 1949 statute is no clearer than its current version,

the House Report?® leaves little doubt as to what

Congress intended:

Subsection (b) of section 802 provides that any

officer or employee who is promoted or trans-

ferred to a position in a higher class or grade shall

receive basic compensation at the lowest rate of

the higher class or grade which is at least one step

increase above his existing rate of basic compen-

sation.

4 a 4 Be #

At present, a promoted employee receives no

immediate increase if he is already receiving a

*The second step-increase for promotions was added by the

Act of October 11, 1962, Pub.L. No. 87-798, 76 Stat. 832,

847-48,

‘©The House Bill was passed in lieu of the Senate Bill, and the

Conference Report did not mention section 802. See H.Rep. No.

1264, 8lst Cong., Ist Sess., reprinted in [1949] U.S. Code

Cong. Ser. 2363, 2375.

7a

rate in the lower grade that also occurs in the

higher grade. If he is receiving a rate in the lower

grade that falls between two rates of the higher

grade, he is promoted at the higher of these two

rates.

In too many cases, accordingly, an employee

who is promoted to greater responsibilities or

more difficult duties receives no immediate in-

crease in pay. This is not in accord with the com-

monly accepted principle that a promotion in pay

should concurrently accompany a promotion in

duties and responsibilities.

Subsection (b) of section 802 corrects this situa-

tion.** (emphasis added).

Congress thus intended that a promotion mean addi-

tional compensation of at least a certain amount (in

1949 one step; now two steps (see note 9, supra)).

Applying 5 C.F.R. § 531.203(c), as the Government

urges, would, in some instances, leave a promoted em-

ployee with no additional pay. The Government argues

that that is not this case. However, neither plaintiffs,

nor a hypothetical employee with no increase at all,

would receive under the Government’s theory the kind

of increase in pay that section 5334(b) requires.

Section 5334(a) authorizes the preparation of “a

comprehensive, unified set of rules.”'* An employee

promoted within the GS receives the benefit of two

step-increases. An employee promoted within the WS

receives a comparable benefit; even an employee pro-

moted “criss-cross” from GS to WS receives the bene-

fit.!° See FPM Supplement 532-1, Subchapter S 8,

7)

12See id. (purpose of parent subsection in 1949 Act).

'SThe Government concedes this point.

8a

§ 8-3(d); § 8-2(a)(7). But, surprisingly, promotions

from WS to GS (the other criss-cross), the Govern-

ment argues, give the employee no such benefit. We

do not agree, however, that Congress meant promo-

tions to include only certain kinds of promotions,'* nor

has defendant cited any statute or case mandating

such a mixed result.

Therefore, we hold that 5 U.S.C. § 5334(b) requires

that a GS employee who has been promoted from the

WS is entitled to two step-increases.'5 Because the

regulations (5 C.F.R. § 531.204(a) and 5 C.F.R.

§ 531.203 (c)) as they pertain to promotions are incon-

sistent with the statute, they cannot, to that extent,

stand. See Hart v. United States, 218 Ct.Cl. , 585

F.2d 1025 (1978); Farrell Lines, Inc., v. United

States, 204 Ct. Cl. 482, 499 F.2d 587 (1974).

Accordingly, after careful consideration of all the

parties’ submissions, and oral argument, we grant

plaintiffs’ motion for summary judgment. Defendant’s

motion for summary judgment is denied. The case is

remanded to our Trial Division for proceedings in ac-

cordance with Rule 131(c)(2).

14See Allstate Insurance Co. v. United States, 213 Ct.Cl. 96,

550 F.2d 629 (1977) (absent an indication to contrary, court as-

sumes Congress intended to convey ordinary meaning of the

language it used).

15Tt could be argued that the language in § 5334(b) which re-

fers to pay exceeding by two step-increases the “grade from

which he is promoted” implies that the employee must have

been at a GS grade to be promoted from. However, the House

Report of the 1949 Act, supra (an Act which had the same lan-

guage), used the phrase “above his existing rate of basic com-

pensation.” /d. This negates any suggestion that Congress may

have subtly limited this provision to promotions within the GS.

9a

APPENDIX B

In the United States Court of Claims

No. 26-76

FILED AUG 8 1980

JOSEPH J. CLARK, ET AL.

U~.

THE UNITED STATES

ORDER

On May 16, 1979, the court rendered an opinion

holding that the plaintiffs were entitled to recover and

entering judgment to that effect. The determination of

the amount of recovery was reserved pending further

proceedings pursuant to Rule 131(c).

On August 5, 1980, the trial judge of this court filed

a memorandum report recommending that, in accord-

ance with the opinion of the court and the stipulation

of the parties, judgments be entered for the plaintiffs

as provided on the attached sheet.

IT IS THEREFORE ORDERED that judgments be

and the same are entered for the plaintiffs whose

names appear on the attached sheet in the amounts

listed and as computed therein.

BY THE COURT

| Pee ea er eas eee eee Se

PHILIP NICHOLS, JR.

Acting Chief Judge

10a

ATTACHMENT TO MEMORANDUM REPORT FOR

JUDGEMENT FILED AUGUST 5, 1980

1. The back salary entitlement for plaintiff, Joseph

J. Clark, covers the period August 18, 1974 to and in-

cluding October 7, 1978, when plaintiff Clark retired.

During this period, his gross additional back pay en-

titlement was $4,112.00. Such amount includes a lump

sum leave payment. Such gross additional back pay

entitlement is subject to Civil Service Retirement de-

duction of $287.94, and Federal Employees Group Life

Insurance (FEGLI) premiums of $38.70. The United

States Government is responsible for contributions on

behalf of plaintiff of $287.94 to the Civil Service Re-

tirement Fund, and $19.35 for FEGLI premiums. In

addition, plaintiff Clark is entitled to additional re-

tirement annuity payments in the amount of $584.00

for the period through August 30, 1979, and $340.00 as

additional survivor annuity through May 30, 1980.

Since the date of the court’s decision in this case,

plaintiff, Joseph J. Clark, died. Accordingly, a motion

for substitution, under Rule 66, of his surviving

widow, Mrs. Margaret Devine Clark, was filed and al-

lowed by the court. It is stipulated and agreed that

plaintiff's entitlement and any additional service bene-

fits for plaintiff, Joseph J. Clark, shall be paid to Mrs.

Margaret Devine Clark. Judgment may therefore be

entered pursuant to the decision of Ma: 16, 1979 in

favor of plaintiff, Joseph J. Clark, and against defend-

ant, in the total amount of $5,036.00, with the provi-

sion that the sum of $287.94 be paid from said judg-

ment to plaintiff's Civil Service Retirement fund, and

the sum of $38.70 be paid to plaintiffs Federal Em-

ployees Group Life Insurance fund. A net payment is

lla

to be made to Mrs. Margaret Devine Clark, surviving

widow of plaintiff, Joseph J. Clark, in the amount of

$4,709.36 for back salary to October 7, 1978, retire-

ment entitlement through August 30, 1979, and addi-

tional survivor annuity through May 30, 1980.

2. The gross salary differential for plaintiff, Frank

D’Aversa, for the period of his employment from May

26, 1974 to May 17, 1980 is $8,900.80, with an alloca-

tion of $622.77 to the Civil Service Retirement fund,

and $70.63 to Federal Employees Group Life Insur-

ance premiums. The United States Government is re-

sponsible for contribution on behalf of plaintiff of

$622.77 to the Civil Service Retirement fund, and

$35.32 to FEGLI premiums. Judgment may therefore

be entered pursuant to the decision of May 16, 1979 in

favor of plaintiff, Frank D’Aversa, and against defend-

ant, in the total amount of $8,900.80, with the provi-

sion that the sum of $622.77 be paid from said judg-

ment to plaintiff's Civil Service Retirement fund ac-

count, and the sum of $70.63 be paid to plaintiff's Fed-

eral Employees Group Life Insurance fund. A net

payment is to be made to plaintiff, Frank D’Aversa, in

the amount of $8,207.40 for back salary entitlement to

May 17, 1980.

3. The gross salary differential for plaintiff,

Nicholas J. Libretto, for the period of his employment

from October 12, 1974 to May 17, 1980, is $8,249.60,

with an allocation of $577.64 to plaintiff's Civil Service

Retirement fund, and $84.20 to plaintiff's Federal Em-

ployees Group Life Insurance fund. In addition, plain-

tiff is entitled to overtime under the Fair Labor

Standards Act for the period of January 1974 through

May 17, 1980, in the amount of $1,139.95. The United

States Government is responsible for contributions on

behalf of plaintiff of $577.64 to the Civil Service Re-

tirement fund, and $42.10 to FEGLI premiums. Judg-

12a

ment may therefore be entered pursuant to the deci-

sion of May 16, 1979 in favor of plaintiff, Nicholas J.

Libretto, and against defendant, in the total amount of

$9,389.55, with the provision that the sum of $577.64

be paid from said judgment to plaintiff's Civil Service

Retirement fund, and the sum of $84.20 be paid to

plaintiffs Federal Employees Group Life Insurance

fund. A net payment is to be made to plaintiff,

Nicholas J. Libretto, in the amount of $8,727.71 for

back salary entitlement to May 17, 1980.

4. The gross salary differential for plaintiff,

Nicholas J. Proto, for the period of his employment

from July 2, 1973 to and including June 26, 1979, the

date of his death, is $4,498.52, with an allocation of

$309.59 to the Civil Service Retirement fund, and

$37.39 to Federal Employees Group Life Insurance

premiums. In addition, plaintiff Proto, or his succes-

sor, is entitled to additional survivor annuity through

May 30, 1980 of $263.00. The United States Govern-

ment is responsible for contributions on behalf of plain-

tiff of $309.59 to Civil Service Retirement fund, and

$18.70 to FEGLI premiums. Since the date of the

court’s decision in this matter, plaintiff, J. Proto, died.

Accordingly, a motion for substitution, under Rule 66,

of his surviving widow, Mrs. Annette Kurtzman Proto,

was filed and allowed by the court. It is stipulated and

agreed that plaintiff's entitlement and any additional

service benefits for plaintiff, Nicholas J. Proto, shall

be paid to Mrs. Annette Kurtzman Proto. Judgment

may therefore be entered pursuant to the decision of

May 16, 1979 in favor of plaintiff, Nicholas J. Proto,

and against defendant, in the total amount of

$4,761.52, with the provision that the sum of $309.59 is

to be paid to plaintiff's Civil Service Retirement fund,

and $37.39 is to be paid to FEGLI premiums. A net

payment is to be made to plaintiff, Nicholas J. Proto,

13a

or his successor, in the amount of $4,414.54 for back

salary entitlement to June 26, 1979, and survivor an-

nuity through May 30, 1980.

5. The gross salary differential for plaintiff, Carlo

Scialpi, for the period of his employment from Sep-

tember 15, 1974 to and including December 30, 1977,

the date of his retirement, is $1,884.40, with an alloca-

tion of $123.32 to plaintiff's Civil Service Retirement

fund, and $22.64 to plaintiff's Federal Employees

Group Life Insurance premiums. Such gross salary en-

titlement includes lump sum leave payments. In addi-

tion, plaintiff is entitled to increased retirement bene-

fits through May 30, 1980 of $1,077.00. The United

States Government is responsible for contributions on

behalf of plaintiff of $123.32 to Civil Service Retire-

ment fund, and $11.32 to FEGLI premiums. Judgment

may therefore be entered pursuant to the decision of

May 16, 1979 in favor of plaintiff, Carlo Scialpi, and

against defendant, in the total amount of $2,961.40,

with the provision that the sum of $123.32 be paid to

plaintiff's Civil Service Retirement fund, and $22.64 is

to be paid to plaintiffs FEGLI fund. A net payment is

to be paid to plaintiff, Carlo Scialpi, in the amount of

$2,815.44 for back salary entitlement to December 30,

1977, and retirement benefits through May 30, 1980.

6. The gross salary differential for plaintiff, Albert

Wolfus, for the period of his employment from

November 11, 1973 to and including July 1, 1978, the

date of his retirement, is $4,184.20, with an allocation

of $285.68 to plaintiffs Civil Service Retirement fund,

and $34.68 to plaintiff's Federal Employees Group Life

Insurance premiums. In addition, plaintiff is entitled

to increased retirement benefits through May 30, 1980

in the amount of $1,400,000. The United States Gov-

ernment is responsible for contributions on behalf of

plaintiff of $285.68 to Civil Service Retirement fund,

l4a

and $17.34 to FEGLI premiums. Judgment may

therefore be entered pursuant to the decision of May

16, 1979 in favor of plaintiff, Albert Wolfus, and

against defendant, in the total amount of $5,584.20,

with the provision that the sum of $285.68 be paid to

plaintiff's Civil Service Retirement fund, and $34.68 is

to be paid to plaintiffs FEGLI fund. A net payment is

to be made to plaintiff, Albert Wolfus, in the amount

of $5,263.84 for back salary entitlement to July 1,

1978, and retirement benefits through May 30, 1980

15a

APPENDIX C

In the United States Court of Claims

No. 26-76

FILED SEP 28 1979

JOSEPH J. CLARK, ET AL.

vU.

THE UNITED STATES

Before KUNZIG, Judge, Presiding, BENNETT and

SMITH, Judges.

ORDER

This case comes before the court on defendant’s mo-

tion, filed June 19, 1979, for rehearing en banc pur-

suant to Rules 7(d) and 151, with reference to the deci-

sion entered herein on May 16, 1979. Upon considera-

tion thereof, together with the response in opposition

thereto, without oral argument, by the seven active

Judges of the court as to the suggestion for rehearing

en banc under Rule 7(d), which suggestion is denied,

16a

and further having been so considered by the panel

listed above as to the motion for rehearing under Rule

151,

IT IS ORDERED that defendant’s said motion for

rehearing is denied.

BY THE COURT

SS ee

ROBERT L. KUNZIG

Judge, Presiding

17a

APPENDIX D

1. 5 U.S.C. 5102 provides in pertinent part:

(a) For the purpose of this chapter—

* *# * * 6

(5) “grade” includes all classes of positions

which, although different with respect to kind or

subject-matter of work, are sufficiently equivalent

as to—

(A) level of difficulty and responsibility;

and

(B) level of qualification requirements of

the work;

to warrant their inclusion within one range of

rates of basic pay in the General Schedule.

* * 3 * *

(c) This chapter does not apply to —

6 * 2% * *

(7) employees in recognized trades or crafts, or

other skilled mechanical crafts, or in unskilled,

semiskilled, or skilled manual-labor occupations,

and other employees including foremen and

supervisors in positions having trade, craft, or la-

boring experience and knowledge as the

paramount requirement, and employees in the

Bureau of Engraving and Printing whose duties

are to perform or to direct manual or machine op-

erations requiring special skill or experience, or to

perform or direct the counting, examining, sort-

ing, or other verification of the product of manual

or machine operations * * *

18a

2. 5 U.S.C. (& Supp. IID 5331 provides:

(a) For the purpose of this subchapter,

“agency”, “employee”, “position”, “class”, and

“grade” have the meanings given them by section

5102 of this title.

(b) This subchapter applies to employees and

positions, other than Senior Executive Service po-

sitions, to which chapter 51 of this title applies.

3. 5 U.S.C. (& Supp. IIT) 5334 provides in pertinent

part:

(a) The rate of basic pay to which an employee

is entitled is governed by regulations prescribed

by the Office of Personnel Management in

conformity with this subchapter and chapter 51 of

this title when—

(1) he is transferred from a position in the

legislative, judicial, or executive branch to

which this subchapter does not apply;

(2) he is transferred from a position in the

legislative, judicial, or executive branch to

which this subchapter applies to another such

position;

(3) he is demoted to a position in a lower

grade;

(4) he is reinstated, reappointed, or reem-

ployed in a position to which this subchapter

applies following service in any position in the

legislative, judicial, or executive branch;

(5) his type of appointment is changed;

(6) his employment status is otherwise

changed; or

(7) his position is changed from one grade

to another grade.

* * * *

19a

(b) An employee who is promoted or trans-

ferred to a position in a higher grade is entitled to

basic pay at the lowest rate of the higher grade

which exceeds his existing rate of basic pay by not

less than two step-increases of the grade from

which he is promoted or transferred. If, in the

case of an employee so promoted or transferred

who is receiving basic pay at a rate in excess of

the maximum rate of his grade, there is no rate in

the higher grade which is at least two step-

increases above his existing rate of basic pay, he

is entitled to—

(1) the maximum rate of the higher grade;

or

(2) his existing rate of basic pay, if that

rate is the higher.

If an employee so promoted or transferred is re-

ceiving basic pay at a rate saved to him under

subchapter VI of this chapter on reduction in

grade, he is entitled to—

(A) basic pay at a rate two steps above the

rate which he would be receiving if subchap-

ter VI of this chapter were not applicable to

him; or

(B) his existing rate of basic pay, if that

rate is the higher.

4. 5 C.F.R. 531.201 provides:

This subpart and sections 5333 and 5334 of title

5, United States Code, apply in fixing and adjust-

ing rates of basic pay of each employee subject to

the General Schedule.

5. 5 C.F.R. 531.202(h) provides:

“Promotion” means a change of an employee,

while continuously employed, from:

20a

(1) One General Schedule grade to a higher

General Schedule grade; or

(2) A lower rate paid under authority other

than subchapter III of chapter 53 of title 5, United

States Code, to a higher rate within a General

Schedule grade.

6. 5 C.F.R. 531.203(c) provides:

Position or appointment changes. Subject to

§$§ 531.204, 531.515, 539.201 of this chapter, and

section 5334(a) of title 5, United States Code,

when an employee is reemployed, transferred,

reassigned, promoted, or demoted, the agency

may pay the employee at any rate of the grade

which does not exceed his or her highest previous

rate; however, if the employee’s highest previous

rate falls between two rates of his or her grade,

the agency may pay him or her at the higher rate.

When an employee’s type of appointment is

changed in the same position, the agency may con-

tinue to pay the employee at his or her existing

rate or may pay the employee at any rate of the

grade which does not exceed his or her highest

previous rate; however, if the employee’s previous

rate falls between two rates of the grade, the

agency may pay him or her at the higher rate.

7. 5 C.F.R. 531.204(a)(1) provides:

The requirements of section 5334(b) of title 5,

United States Code, apply only (i) to a transfer

from one General Schedule position to a higher

General Schedule position, and (ii) to a promotion

from one General Schedule grade to a higher Gen-

eral Schedule grade.

8. Federal Personnel Manual System, Federal Wage

System, Supplement 532-1, Subchapter S8-2a(7) (Apr.

14, 1980), provides

2la

Promotion means a change of an employee, while

continuously employed, from:

—QOne grade to a higher grade under the same

type wage schedule, for example, from a grade

9 under the non-supervisory wage schedule to

grade 10 under the non-supervisory wage

schedule, whether in the same or different wage

areas.

—A job or grade under a wage schedule to a job

or grade with a higher representative rate

under a different wage schedule.

—A job or grade paid under the General Schedule

or other statutory pay schedule to a job or

grade with higher representative rate under a

wage schedule.

9. Federal Personnel Manual System, Federal Wage

System, Supplement 532-1, Subchapter S8-3c (Inst. 17

Apr. 14, 1980), provides:

Position or appointment change. Subject to S8-3d,

and to pay retention provisions in subchapter S9, when

an employee is reemployed, transferred, reassigned,

promoted, or changed to lower grade, an agency may

pay him/her at any rate of his/her grade which does

not exceed his/her highest previous rate; however, if

his/her highest previous rate falls between two rates of

his/her grade, the agency may pay him/her at the

higher rate. When an employee's type of appointment

is changed in the same job, an agency may continue to

pay him/her at his/her existing scheduled rate or may

pay him/her at any higher rate of his/her grade which

does not exceed his/her highest previous rate; how-

ever, if his/her highest previous rate falls between two

rates of his/her grade, the agency may pay him/her at

the higher rate.

10. At the time of the events leading to this litiga-

tion, Federal Personnel Manual System, Federal

22a

Wage System, Supplement 532-1, Subchapter S8-3d

(Inst. 8 Jan. 16, 1973), provided:

Promotion. Upon promotion an employee is en-

titled to be paid at the lowest scheduled rate of

the grade which exceeds his existing rate of pay

by no less than one step-rate increment of the

grade from which he is promoted. An employee

promoted from a single rate job under a special

schedule to a multistep-rate job under the regular

schedule is paid at the lowest scheduled rate of the

new grade which exceeds his existing rate by no

less than four percent. If, for any employee so

promoted, there is no rate in the higher grade

which is at least one step-increase (four percent)

above his existing rate of pay he shall receive (1)

the maximum scheduled rate of the higher grade

or (2) his existing rate of pay, if the existing rate

of pay is the higher. (This rule is not applicable to

actions involving changes of employees between

positions paying single rates.)

# U.S. GOVERNMENT PRINTING OFFICE 1980 334304 190