DEBT COLLECTION ACT REMEDIES & ATTORNEY FEES
There have been a series of decisions recently highlighting those issues for which the Back Pay Act (BPA) remedies of interest and attorney fees do not apply. Few are any clearer than the Contract Board of Civilian Appeals (CBCA) decision ruling that BPA remedies are not available when a government agency reimburses an employee for a debt improperly collected under the Debt Collection Act (DCA). The employee in that case had been reimbursed by his agency for a debt it collected under procedurally incorrect rules. When he asked for interest on the reimbursement under the Back Pay Act, the CBCA traced the relationship between the DCA and BPA and concluded that the BPA does not apply when employees receive reimbursements on improperly collected debts to the agency. Consequently, none of the BPA remedies, such as interest or attorney fees, are available in those situations. (See In the Matter of JEFFREY E. KOONTZ, Civilian Board of Contract Appeals, No. 3436-TRAV (July 23, 2013))
While we cannot find a FLRA decision addressing the same set of facts, there are more and more indications that the reach of the BPA remedies is being reduced. For example, in Athey v. US, No. 99-2051 (Fed. Cl. 2015) former feds asked a court to grant them interest on monies owed them for incorrect lump sum annual leave checks they had received. The court ruled that lump sum payments are not “pay” under the Back Pay Act and therefore fail to meet the criteria of that Act which limit its remedies to “pay, allowances and differentials.” In short, it shut the door on BPA interest and attorney fees for incorrect lump sum annual leave payments. The court based its conclusion on the widely accepted precedent that any waiver of the government’s sovereign immunity against paying interest on an award, “…must be separate from the waiver as to underlying liability.”
Even the GAO has left the door open for those agencies looking for assistance to limit the entitlement to attorney fees. In its 2004 report entitled, “Principles of Federal Appropriations Law, 3rd Ed.,” it reviewed its own position on the entitlement to attorney fees, providing eight examples of where it denied fees. Most significantly, it stated, “While GAO will not ‘review’ such matters, it may provide its opinion on them, when requested by an agency or accountable officer.” (pg. 4-72) In other words, agencies faced with attorney fee claims or even orders might be able to enlist GAO’s help before the FLRA rules on the matter. After all, no matter what an arbitrator or even the FLRA rules, an agency may not distribute money if it does not have the authority under appropriation and other laws. For example, imagine that an arbitrator ordered an agency to stand in front of its HQ building and hand out $100.00 bills to passers-by—and that the FLRA upheld that remedy. The agency still has the option to, and is probably ethically bound to, refuse to pay pursuant to the FLRA denial of exceptions and force the matter into a compliance dispute over which a federal court will have final jurisdiction. As the FLRA has noted often, “… a sovereign immunity objection may be raised without regard to whether it was raised below. See Dep’t of the Treasury, IRS v. FLRA, 521 F.3d 1148, 1152 (9th Cir. 2008).” (See AFGE, 63 FLRA 188 (2009). See also AFGE, 68 FLRA 841 (2015) Even where an agency has already paid the money, it has the ability to notify the recipient that the monies were improperly paid and demand repayment.