[00:00:00] Speaker 01:
is number 25-11-01, Bennett versus OPM.

[00:00:06] Speaker 01:
Okay, Mr. Solomon.

[00:00:10] Speaker 02:
Good morning and may it please the Court.

[00:00:13] Speaker 02:
This case is mostly about the StatStore construction of 5 USC 83-31-3, which is the list of things that are included in basic pay of an annuit.

[00:00:26] Speaker 02:
In this case we have a postal service worker who became disabled.

[00:00:30] Speaker 02:
Per the board's guidance he was entitled to recalculation of his annuity as though it was calculated upon the date he would have retired at 62.

[00:00:40] Speaker 02:
There are various things that went into this calculation but many of the things that should have been considered as far as making him whole as though he's retired at 62 were not considered.

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Also we disagree with

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the OPM's determination regarding the definition of basic pay and what is and is not included.

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There is a distinction in this case or in the law between prevailing wage employees who earn money on an hourly basis and salaried employees.

[00:01:17] Speaker 02:
Though the petitioner is a salaried employee, he was a postal service worker.

[00:01:21] Speaker 03:
He was a salaried employee, not

[00:01:24] Speaker 03:
What is the other category?

[00:01:27] Speaker 02:
Prevailing wage.

[00:01:28] Speaker 03:
He was not a prevailing wage employee, right?

[00:01:31] Speaker 02:
Correct, Your Honor.

[00:01:33] Speaker 02:
But the distinction between the two, I think, is a pretty arbitrary one.

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And it's not rooted in the statute, nor is it rooted in any sort of discernible public policy interest.

[00:01:46] Speaker 03:
But you're not challenging the legitimacy of the distinction, are you, between prevailing wage and

[00:01:54] Speaker 03:
salaried employees.

[00:01:56] Speaker 02:
I don't know exactly what you mean by that, Your Honor.

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I do understand there's a distinction.

[00:02:00] Speaker 03:
In other words, the statutes say prevailing wage employees are entitled to certain calculations of their benefits, and salaried employees are entitled to different calculations.

[00:02:15] Speaker 03:
He falls into the second category, and I think indisputably correct,

[00:02:20] Speaker 03:
I don't believe that distinction is made in 83-31 as far as... There's a whole raft of statutes that I'm sure you know better than I do in which you bump down from 83-31 and you go through 84-01 and at one point there's a reference to prevailing wage in place and that

[00:02:47] Speaker 03:
ends up being important, and he's not in that category.

[00:02:50] Speaker 02:
Yes, that is correct.

[00:02:52] Speaker 03:
Right?

[00:02:52] Speaker 02:
Yes, that is correct.

[00:02:55] Speaker 01:
OK.

[00:02:56] Speaker 01:
What is your argument as to how he's entitled to this night pay differential under 83-31?

[00:03:07] Speaker 02:
Well, if you look at 83-31, skipping ahead to that,

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It says it does not include bonuses.

[00:03:15] Speaker 02:
My differential pay is not a bonus.

[00:03:17] Speaker 02:
It does not include overtime, military pay.

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And just looking at those categories of pay thus far, you can see that those are things that are not modifying the salary for the actual hours contemplated under a salaried employee.

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Those are hours worked in addition.

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Bonuses are completely gratuitous and not necessarily a reflection of hours worked.

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And military pay is a completely separate category of pay.

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Bennett goes on to say that it does not include pay given in addition to the basic pay as fixed by law or regulation.

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And as far as his entitlement, that is something that is fixed, depending on how we look at the word fixed.

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So as far as scheduled employees, there is a fixed salary for scheduled employees.

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It says that if you are a

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For example, in the general schedule, if you're a GS5, you make this much money as part of basic pay.

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But as far as when it says fixed by law or regulation, if we contemplate the fact that this is an employee who worked half his time during the night and half his time during the day, we can look at laws, rules, and regulations and say that based on that, he is entitled to night differential pay of an extra 10%.

[00:04:28] Speaker 02:
So that is a number that can be- Now, open P.M.'

[00:04:31] Speaker 03:
's fact sheet, which you cited to us,

[00:04:34] Speaker 03:
Actually, it says relationship to basic pay for general schedule employees.

[00:04:40] Speaker 03:
Night pay is not basic pay for any purpose.

[00:04:43] Speaker 03:
So why is that not, does that not state the rule that applies to this individual?

[00:04:50] Speaker 02:
I'm sorry, can you repeat the beginning of the question?

[00:04:52] Speaker 03:
Yeah, I'm reading from the fact sheet that

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You, I believe, were cited in your briefing.

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You may have been cited in the government's briefing.

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I believe it was in yours.

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And one of the provisions, it says deciding, stating what benefits people can assign to basic pay, says night pay is not basic pay for any purpose.

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And that seems pretty conclusive.

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Why is there an exception to that principle here?

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So I agree it's not part of basic pay.

[00:05:29] Speaker 03:
Isn't that fatal to your claim that he was entitled a credit for night differential?

[00:05:36] Speaker 02:
Well, no, Your Honor, just because 8331 then goes on to list exceptions.

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And as we argue in our briefs, I don't believe it's an exhaustive list of things that are specifically accepted from it.

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But as I was just stating with

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section three it says pay given in addition to the basic pay as fixed by law or regulation.

[00:06:00] Speaker 01:
It says it does not include pay in addition to base pay.

[00:06:06] Speaker 02:
It's fixed by law, except it's provided in some parameters being through L. Yes, Your Honor, but as far as the night differential pay,

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As I was stating, there's two different definitions, and I didn't get through the entire point I was making.

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But I was starting off with kind of a concessionary point that if you look at it as fixed by law, rule, or regulation, yes, you can calculate exactly how much you use O. But that's not sufficient.

[00:06:36] Speaker 01:
It says you have to come within one of the exceptions, right?

[00:06:41] Speaker 01:
In B through L.

[00:06:43] Speaker 02:
My point is it doesn't fall under as far as the first part here where it says that it does not include pay given addition to the basic pay as fixed by law or regulation There is no law or regulation stating that

[00:07:04] Speaker 02:
that all employees that work for that position must work at some point in their life.

[00:07:10] Speaker 01:
I'm simply not understanding what you're saying.

[00:07:12] Speaker 01:
The statute says it does not include pay given in addition to base pay of the position as fixed by law regulation except as provided by subparagraphs B through L. So don't you have to fit yourself in one of the exceptions in B through L?

[00:07:28] Speaker 02:
Well, Your Honor, I was stating that as far as the first part, it's pay given in addition to the basic pay as fixed by law or regulation.

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And as I stated, there is certainly an argument to be made that the basic pay or the night differential pay is fixed because it can be calculated.

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But it's not necessarily something that employees

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guaranteed to work or required to work.

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So it is something that is variable.

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If he took sick leave that day, he would not receive night differential pay.

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They could change his work at any time.

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So I do not believe it falls into these first category of things that you would need an exception to.

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As I stated, if you look at the other types of things that are not included, things like bonuses over time and military pay,

[00:08:20] Speaker 02:
Those are things that are kind of unrelated to the salary that the employee receives.

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But if you look at something like basic pay, and then you look at night differential pay, that is something that is modifying

[00:08:43] Speaker 02:
The night the entitlement to basic pay depending on whether you work or you don't work during those night hours, so it's not fixed and therefore it's not included in the in the original 83 31 3 and therefore doesn't need to fall under one of the exceptions that's

[00:09:04] Speaker 02:
To move on, though, there's other parts that, as I discussed, he was not given full consideration of the amount of money he would have been making upon retirement at 62.

[00:09:18] Speaker 02:
His position was automatically recategorized to a higher-level position, higher-rated position, and that wasn't contemplated in the final wage determination.

[00:09:30] Speaker 03:
This is your high three argument, right?

[00:09:32] Speaker 02:
Yes, right.

[00:09:33] Speaker 03:
What you're saying that he should have been given a high three, which is at the rate he would have been paid had he stayed on the job as opposed to retiring on disability through 2021, whatever it was.

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And that at that point,

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In addition to the colas, which he did get credit for, he would have had promotions and would have moved up so that his high threes should be calculated according to the last three years before 2021, before his retirement age.

[00:10:07] Speaker 03:
Is that correct?

[00:10:08] Speaker 02:
I wouldn't use the word promotion as far as the step increases so that as part of their employment.

[00:10:14] Speaker 03:
He would have had a higher salary had he kept working, but he didn't.

[00:10:19] Speaker 03:
So they calculated his high three by the last three years that he actually worked, correct?

[00:10:25] Speaker 02:
Yes, Your Honor.

[00:10:25] Speaker 02:
And I believe that if it wasn't something that was an automatic entitlement, then that wouldn't be contemplated.

[00:10:32] Speaker 02:
If that was something that was, we're not arguing that as a result of exemplary work, he would have received promotions based on applying for new jobs.

[00:10:43] Speaker 02:
His position was automatically reclassified in the salary increase.

[00:10:46] Speaker 02:
So if you look at the board's case law saying that you're entitled to payment,

[00:10:51] Speaker 02:
As though you've retired at the date of 62 If you calculated based on the idea that he would have retired at 62 in the same position, which was You know reclassified and then he's also entitled to automatic step increases You know every so often is kind of scheduled out in the briefs that he really didn't receive money as though he retired at 62 Had he but had he kept working he would have had a larger retirement is what you're saying.

[00:11:19] Speaker 03:
Yes, you're right, but

[00:11:21] Speaker 03:
It seemed to me, reading the statutes, that the calculation of the high three is the calculation of the highest three years in which you worked, not the highest three years in which you would have worked had you continued to work until your time for retirement.

[00:11:37] Speaker 03:
I don't see where there's a statutory provision that's contrary to that view of the matter.

[00:11:42] Speaker 02:
I would agree that I don't think there's anything over there, but just reading it in concert with the MSPB's decisions interpreting that statute, saying that you have to interpret it as though the employee is entitled to pay as though they had retired at 62.

[00:11:57] Speaker 02:
That's kind of, we're applying that reading of the statute and saying that he would have been entitled to a greater amount.

[00:12:07] Speaker 03:
And which MSPB cases say that you calculate the high three

[00:12:12] Speaker 03:
according to the last three years of his disability, by calculating what he would have been paid had he not been retired on disability.

[00:12:23] Speaker 02:
I don't believe there's any MSPB cases that include that first part of what you just stated.

[00:12:27] Speaker 02:
There are MSPB cases as cited in our brief, and I apologize if I don't have the

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Citation on the front of my mind here, but there are cases that state that you're entitled to Retirement as though you had continued working until 62.

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That's how it's calculated and and I don't believe that we should be essentially penalizing employees for for taking disability and retirement and not giving them you know a

[00:12:55] Speaker 02:
the compensation they would have received had they stayed in the position, not done anything exemplary, just maintained doing exactly what they did and received the increases in salary they were naturally entitled to.

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And on that note, as far as the public policy, I think if we're looking at how to read 8331, it should be put through the lens of what is the difference between a

[00:13:20] Speaker 02:
a prevailing wage employee and a salaried employee.

[00:13:23] Speaker 02:
I don't know if it's a perception that these employees are more blue collar or they make less money, but the idea is that they should be entitled to the pay that they actually worked for and received based on the market rate.

[00:13:37] Speaker 02:
For night differential pay, for example, if you were to go to the private sector, people are paid more for working the night shift.

[00:13:44] Speaker 02:
That's just part of it.

[00:13:46] Speaker 03:
As far as... The prevailing wage in place, if I understand it, are people like VA doctors.

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And every now and then the VA looks out at the universe of physicians in the same specialties and decides, well, the prevailing pay for doctors in that specialty is X and they adjust the doctors that they have.

[00:14:08] Speaker 03:
That's a very unusual category, I think.

[00:14:10] Speaker 03:
Is that not right?

[00:14:11] Speaker 02:
I believe there are other categories of prevailing wage in place.

[00:14:14] Speaker 03:
Yeah, there are others, but I think it's

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It's a pretty limited of the many civil servants that are out there.

[00:14:22] Speaker 03:
Most of them are not prevailing wage employees.

[00:14:24] Speaker 03:
I think it's fair to say.

[00:14:25] Speaker 02:
Most of them aren't.

[00:14:26] Speaker 02:
But there's also prevailing wage employees, I believe, on the lower end, especially for the part-time employees that work hourly.

[00:14:35] Speaker 02:
They charge them hourly.

[00:14:37] Speaker 02:
There's also full-time employees that, in certain positions, are charged hourly, including both appropriated and non-appropriated funds positions.

[00:14:46] Speaker 02:
As far as the VA doctors, for example, that brings up an example where they're allowed to look at the competitive rate for VA doctors and adjust salaries accordingly.

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And they can look at what people are making out there in the market.

[00:15:00] Speaker 02:
So if you have somebody like a night working physician, they can look and just adjust your pay based on the idea of how much would this person be making if they were out in the private sector.

[00:15:09] Speaker 02:
And that contemplates the inclusion.

[00:15:11] Speaker 02:
of something like night differential pay right into the salary.

[00:15:14] Speaker 02:
And there's no distinction as to why that should be considered for that type of employee, but not for somebody like Mr. Bennett who's working for less than $50,000 as a postal worker who became disabled and then went on disability retirement and is now seeking annuity.

[00:15:29] Speaker 02:
The fact that his annuity was recalculated and it actually decreased after being out of work and having all those COLA increases calculated in,

[00:15:41] Speaker 02:
I think just kind of shows the injustice of looking at it in terms of, well, technically, your salary on paper was this, even though you were making much more.

[00:15:52] Speaker 02:
And we are going to give you an annuity based on not your services that you're performing and the market rate of those, but on some arbitrary number of what we think the position is entitled to prior to those types of adjustments.

[00:16:08] Speaker 01:
OK, I think we're out of time.

[00:16:09] Speaker 01:
We'll give you two minutes for the model.

[00:16:20] Speaker 00:
Thank you, Your Honor.

[00:16:21] Speaker 00:
May it please the Court?

[00:16:24] Speaker 00:
OPM here clearly demonstrated what its calculations were for the redetermination of Mr. Bennett's retirement annuity.

[00:16:32] Speaker 00:
And we respectfully request that the decision affirming that calculation be affirmed.

[00:16:38] Speaker 00:
Specifically with respect to the question of night shift pay, I won't reiterate too much of what the Court just went over.

[00:16:50] Speaker 00:
looking at 5 USC 83313 where it explains all of the aspects of basic pay.

[00:17:02] Speaker 00:
I would just draw the Court's attention briefly to the inclusion in the list of premium pay under 5 USC 5545C1, which is the

[00:17:15] Speaker 00:
specific type of premium pay related to regular standby pay that is included as part of an annual salary.

[00:17:23] Speaker 00:
That is the same statute 5545A that includes entitlement to night shift pay for pay works during that period.

[00:17:31] Speaker 00:
The statute describing basic pay does not specifically include section A of that statute, which is sort of regular night shift pay.

[00:17:40] Speaker 00:
It only includes that one specific type of premium pay that is not at issue here.

[00:17:45] Speaker 00:
So that is further evidence that this definition of basic pay does not include all premium pays and specifically night shift pay in this case.

[00:17:55] Speaker 03:
Give me the statutes that you just walked through again, if you would, because I didn't catch them.

[00:18:00] Speaker 00:
Certainly, Your Honor.

[00:18:01] Speaker 00:
My apologies.

[00:18:01] Speaker 00:
So 5 UST 83313 is the definition of.

[00:18:08] Speaker 03:
That's basic pay.

[00:18:10] Speaker 00:
Yes, basic pay.

[00:18:10] Speaker 00:
Includes, and then, A through I. Yes.

[00:18:15] Speaker 00:
in that list of exceptions.

[00:18:19] Speaker 00:
Apologies, I lost it.

[00:18:21] Speaker 00:
Under 3C, this is basic pay includes, and then down to C, premium pay under section 5545C1 of this title.

[00:18:35] Speaker 00:
This is also for reference.

[00:18:36] Speaker 00:
We cited the fine case in our brief.

[00:18:38] Speaker 00:
It's a very similar case.

[00:18:39] Speaker 00:
This is a statute that was referenced in that as well.

[00:18:41] Speaker 00:
So 5545C1 is a very specific type of premium pay.

[00:18:48] Speaker 00:
In 5545, there is a separate section that covers night pay, that's A, which is not called out in that list of inclusions.

[00:18:57] Speaker 00:
And we do believe that the sort of catch-all exclusion of pay given in addition to the base pay for the position as fixed by law or regulation would cover your typical types of premium pays, like night shift differential.

[00:19:12] Speaker 01:
as an exclusion to basic pay.

[00:19:23] Speaker 00:
It's premised on the position, I believe, that the pay, the annuity should be calculated as though you had worked until age 62.

[00:19:35] Speaker 00:
And that is not what the statute says.

[00:19:37] Speaker 00:
And particularly if the court would look at 5 USC 8452B, which describes how that recalculation, the redetermination is to be done.

[00:19:47] Speaker 00:
It refers to the high three,

[00:19:53] Speaker 00:
and then it refers to the calculation that would be done under 8415 for someone who was just retiring generally and the only allowance that is made beyond that is one for the adjustment to the creditable service that is to the service that you actually worked we will add the years that you were on disability retirement to get a higher number for the determination of your rate.

[00:20:18] Speaker 03:
So he gets the years but he doesn't get the increase

[00:20:21] Speaker 03:
He would have gotten had he stayed on the job.

[00:20:24] Speaker 00:
That's correct your honor and then specifically you also get adjustments For what we've been referring to as coal as the cost of living adjustments specifically under 8462 B And those are very specific as to price index adjustments annually that are determined by OPM

[00:20:45] Speaker 01:
First specifically to call us but not to step increases.

[00:20:50] Speaker 00:
Yes, your honor So those are the two adjustments that are stated in that statute and the second one that says Let's track my subsections of 8452 B to Big B little Roman numeral to Refers to adjustments under 8462 B and then 8462 B specifically refers to this price index and

[00:21:14] Speaker 00:
the percent change in the price index year to year.

[00:21:17] Speaker 00:
And that's a specific calculation based on that index.

[00:21:19] Speaker 00:
It doesn't apply to anything else like step increases, like promotions or anything like that.

[00:21:30] Speaker 00:
The only other thing I want to say, Your Honor, is I appreciate the policy arguments that Mr. Bennett has raised in this case, both in the briefing and before the court.

[00:21:39] Speaker 00:
Those are arguments that should be addressed to Congress to change how these

[00:21:44] Speaker 00:
Calculations are done.

[00:21:45] Speaker 00:
They are not based in the statutory text that we have here And so for purposes of this particular recalculation.

[00:21:52] Speaker 00:
You don't believe they would apply Unless the corners any further questions, okay.

[00:21:58] Speaker 00:
Thank you.

[00:21:59] Speaker 01:
Thank you

[00:22:16] Speaker 02:
Thank you, Your Honor.

[00:22:17] Speaker 02:
I just wanted to briefly include the citation that was requested earlier.

[00:22:21] Speaker 02:
There's a case in the reply brief at page four.

[00:22:26] Speaker 02:
Unfortunately, I don't have the ECF numberings, but page four as I've numbered them.

[00:22:31] Speaker 02:
And it includes a case more VOPM.

[00:22:34] Speaker 02:
And it quotes something that I think is, I found in more than one MSPB case, and I can probably provide further citations, but it says, upon attaining age 62, the appellant's annuity should have been recomputed using an amount that represents the annuity she would have received if she continued working until the day before her birthday and retired under the non-disability provisions of FERS.

[00:22:57] Speaker 02:
I just wanted to very briefly go into

[00:23:01] Speaker 02:
the argument regarding sick leave and retroactivity.

[00:23:04] Speaker 02:
There is the National Defense Authorization Act, which did provide for the recomputation of the new.

[00:23:10] Speaker 01:
But the calculation was that he wasn't entitled to any sick leave, quite apart from the question of whether it was barred.

[00:23:18] Speaker 01:
Excuse me?

[00:23:20] Speaker 01:
The OPM calculation showed he wasn't entitled to any sick leave.

[00:23:24] Speaker 01:
So the whole question of whether you could get sick leave as part of basic pay is kind of moot, right?

[00:23:31] Speaker 02:
Well, Your Honor, as we forward in the briefs, I think one of the issues was that the board was not receptive to the argument.

[00:23:38] Speaker 02:
They stated that it was barred.

[00:23:41] Speaker 02:
And also, Mr. Bennett attempted to put somebody from OPM on the stand and question them on this, and that was denied.

[00:23:49] Speaker 03:
Wait a minute.

[00:23:50] Speaker 03:
On the person that he wanted to put on the stand, I think that was the agency representative, right?

[00:23:56] Speaker 03:
That was his opposing counsel.

[00:23:58] Speaker 03:
He wanted to cross-examine opposing counsel.

[00:24:01] Speaker 03:
board presiding judge said no, which I would think that would be as a matter of course.

[00:24:07] Speaker 03:
You don't need to cross-examine your opposing counsel.

[00:24:10] Speaker 02:
Well, Your Honor, it's my understanding that that was... That was Ms.

[00:24:14] Speaker 03:
Bell, right, who was the agency representative.

[00:24:17] Speaker 02:
Yes, Your Honor.

[00:24:18] Speaker 03:
He wanted to cross-examine her.

[00:24:20] Speaker 02:
Yes, sir.

[00:24:21] Speaker 02:
So that was after the agency had refused to provide a official point of contact from OPM as to answer how the calculations were provided.

[00:24:28] Speaker 03:
But he told the AJ that he didn't need any witnesses.

[00:24:34] Speaker 02:
I believe that's going to be more time than I have to get into.

[00:24:38] Speaker 02:
I believe that's somewhat covered in the brief.

[00:24:41] Speaker 03:
But I just wanted to... He did say that to the AJ, right?

[00:24:45] Speaker 02:
Yes.

[00:24:46] Speaker 02:
But I just wanted to end with the fact that we believe based on the same the logic that the Annuity is calculated as though they continued working to 62 the retroactivity under the ADA A would not apply Can I get the citation to that more against OPM case that you reference?

[00:25:05] Speaker 02:
Yes, so that's MSPB number DA

[00:25:09] Speaker 02:
hyphen oh eight four five hyphen twenty two hyphen oh four three two hyphen one hyphen one and and was that that's not an opinion by the board I take it was that no opinion by an administrative judge correct okay okay thank you thank both counsel in case it's submitted