Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-03160/USCOURTS-ca13-15-03160-0/pdf.json

Parties Involved:
Daniel A. Grover
Petitioner
Office of Personnel Management
Respondent

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

DANIEL A. GROVER,

Petitioner

v.

OFFICE OF PERSONNEL MANAGEMENT,

Respondent

______________________ 

2015-3160

______________________ 

Petition for review of the Merit Systems Protection 

Board in No. CH-0831-13-2586-B-1.

______________________ 

Decided: July 15, 2016

______________________ 

NORMAN JACKMAN, Jackman & Roth, LLP, Cambridge, MA, argued for petitioner. 

ANTHONY F. SCHIAVETTI, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, argued for respondent. Also 

represented by BENJAMIN C. MIZER, ROBERT E.

KIRSCHMAN, JR., REGINALD T. BLADES, JR. 

______________________ 

Before TARANTO, CLEVENGER, and CHEN, Circuit Judges.

TARANTO, Circuit Judge.

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2 GROVER v. OPM

Daniel Grover applied for a retirement annuity under 

the Civil Service Retirement System after he retired as a 

customs officer. By statute, the annuity must reflect the 

highest average annual pay based on three consecutive 

years of specified service, and for a customs officer like 

Mr. Grover in the years in question, the calculation must 

include overtime pay up to $17,500. The Office of Personnel Management, in calculating Mr. Grover’s pay for the 

years in question, did not include anything close to 

$17,500 in overtime pay, although Mr. Grover asserted 

that he received more than $17,500 in overtime pay in 

those years. The Merit Systems Protection Board rejected 

Mr. Grover’s challenge to OPM’s calculation. 

OPM relied on a particular official record for its calculation. But neither OPM nor the Board recognized that 

the record is internally contradictory about what overtime 

pay Mr. Grover received. Accordingly, neither OPM nor 

the Board sought further information—such as pay 

stubs—that might definitively resolve the uncertainty and

determine what overtime pay Mr. Grover actually received. Moreover, the Board and OPM relied on a legal 

ground that seems to make the factual issue immaterial 

even in the face of internally conflicting information in 

the official record used by OPM for its calculation. 

That ground, as OPM now agrees, is incorrect, and 

the key official record, OPM also now agrees, is in fact 

internally inconsistent. Although OPM points to a regulation as independently supporting the result challenged 

in this appeal, by authorizing it to rely on the official 

record it used, that regulation does not address what to do 

when the record is internally contradictory. In this case, 

moreover, we have been shown no reason why objective 

documentation (pay stubs) should not be available to 

resolve the issue (the amount of overtime pay) definitively. At least in this circumstance, the regulation does not 

permit the Board to affirm OPM’s calculation without 

resolving the amount-of-overtime-pay factual issue. We 

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GROVER v. OPM 3

vacate the Board’s decision and remand for a determination of that issue.

BACKGROUND

Mr. Grover worked for many years as an officer within the Customs and Border Protection service, now located within the Department of Homeland Security. During 

his tenure, he participated in the Civil Service Retirement 

System (CSRS), which is defined in subchapter III of 

chapter 83 (within Part III, subpart G) of Title 5, U.S. 

Code. See 5 U.S.C. §§ 8331–8351. He retired in August 

2008.

Mr. Grover applied to OPM for a retirement annuity. 

The statute provides that OPM “shall administer [the 

CSRS] subchapter.” 5 U.S.C. § 8347(a). It directs OPM to 

“perform, or cause to be performed, such acts and prescribe such regulations as are necessary and proper to 

carry out this subchapter.” Id. As OPM stated in its 

April 3, 2014 letter to Mr. Grover (April 2014 Letter), 

“OPM is charged with the administration of the Civil 

Service Retirement law and is expected to pay benefits as 

provided by law.” J.A. 32.

Under 5 U.S.C. § 8339(a), Mr. Grover is entitled to an 

annuity based on his length of service and on his “average 

pay.” The statute defines “average pay” as “the largest 

annual rate resulting from averaging an employee’s . . . rates of basic pay in effect over any 3 consecutive 

years of creditable service.” 5 U.S.C. § 8331(4). That 

amount has been referred to as the “high-three” average. 

Critically for purposes of the dispute in this case, for a 

customs officer like Mr. Grover, the “basic pay” used for 

calculating the “average pay” includes overtime pay up to 

a prescribed amount. Specifically, 5 U.S.C. § 8331(3)(G) 

requires inclusion in “basic pay” of certain authorized 

“compensation for overtime inspectional services” (overtime pay), “not to exceed 50 percent of any statutory 

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4 GROVER v. OPM

maximum in overtime pay for customs officers which is in 

effect for the year involved.” Mr. Grover was covered by 

the Customs Officer Pay Reform Act of 1993 (COPRA), a 

part of the Omnibus Budget Reconciliation Act of 1993, 

Pub. L. No. 103-66, §§ 13811–13812, 107 Stat. 312, 668–

71, which provided for overtime pay for customs officers 

like Mr. Grover up to a specified cap. See 19 U.S.C. § 267. 

For the years in question, that cap was $35,000. J.A. 5 

n.5 (citing Department of Homeland Security Appropriations Bill, 2005, Pub. L. No. 108-334, 118 Stat. 1298 

(2004)). Accordingly, Mr. Grover was entitled to have up 

to $17,500 in overtime pay included in the calculation of 

the high-three average pay—if he received that much. 

When Mr. Grover retired, OPM turned for information about his pay to the National Finance Center, 

which “was the servicing payroll office for Customs and 

Border Protection.” J.A. 32 (April 2014 Letter). It did so 

in accord with its general practice under an OPM regulation, 5 C.F.R. § 831.103, which states:

(a) Standard Form 2806 (Individual Retirement Record) is the basic record for action on all 

claims for annuity or refund, and those pertaining 

to deceased employees, deceased Members, or deceased annuitants.

(b) When the records of the department or 

agency concerned are lost, destroyed, or incomplete, the department or agency shall request the 

General Accounting Office, through OPM, to furnish the data that it considers necessary for a 

proper determination of the rights of the claimant. 

When an official record cannot develop the required information, the department, agency, or 

OPM should request inferior or secondary evidence which is then admissible.

The National Finance Center prepared and certified 

Mr. Grover’s Individual Retirement Record (IRR), StandCase: 15-3160 Document: 58-2 Page: 4 Filed: 07/15/2016
GROVER v. OPM 5

ard Form 2806, though—seemingly with some involvement from OPM—it had to prepare more than one version 

until it arrived at a final one. J.A. 3; J.A. 18 n.1; Oral 

Arg. at 27:00–27:20. OPM, for its part, made calculations 

of average pay, revised them, and revised them some 

more before arriving—in Mr. Grover’s second Board 

appeal—at a final calculation of average pay. J.A. 3–4. 

The alterations involved details of the calculation that are 

not the focus of the current dispute. Also not in dispute is 

that the three years in question are Mr. Grover’s final 

years on the job, from August 2005 to August 2008. OPM 

provided its final explanation in its April 2014 Letter, 

during Mr. Grover’s second Board appeal. J.A. 32–59 

(letter and attachments).

The dispute here is whether Mr. Grover actually received at least $17,500 in overtime pay in those years. 

Mr. Grover has consistently urged that he did receive 

such overtime pay throughout the relevant 2005–2008 

period. But as is now undisputed, OPM did not include

anything close to that amount of overtime pay when 

calculating the high-three average. The result was an 

OPM-calculated high-three average significantly lower 

than what it would be if $17,500 in overtime pay were 

included for each of the three years at issue.

In making its calculations, OPM relied on the final 

Form 2806. J.A. 49. But OPM has itself now described 

that Form as containing “contradict[ory],” “inconsistent,” 

and “conflicting” information on the issue of what amount 

of overtime Mr. Grover earned. Dep’t of Justice Letter to 

Federal Circuit, May 26, 2016, at 1, 3 (DOJ Letter). OPM 

chose to use one side of the facial informational conflict 

without any evident recognition there was such an internal contradiction. 

Thus, one piece of information on Form 2806 (and on 

earlier versions, see J.A. 39–41) consists of Remarks in

the right-hand column that strongly appear to indicate

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6 GROVER v. OPM

that, for the years in question, Mr. Grover’s pay did 

include $17,500 in overtime pay. On the other hand, 

other information on the same Form reported the dollar 

value of retirement deductions taken from pay during 

employment and the rates that generated those deductions. OPM used that deduction-and-rate information for 

its average-pay calculation. By dividing the deduction 

amounts by rates, OPM found the amounts to which the 

rates were applied, which OPM treated as the amount of 

pay: it converted deductions to earnings. See J.A. 49–58.1 

It is arithmetically clear, and OPM now agrees, that

relying on the deduction information in that way produces 

pay amounts that include nothing close to $17,500 in 

overtime pay for the full period at issue. See Oral Arg. at

30:50–31:15. 

In choosing to rely on the deduction information of 

Form 2806 and not use the Remarks information, OPM

followed a general practice reflected in a sentence of 

OPM’s CSRS and FERS Handbook for Personnel and 

Payroll Offices at Chapter 81, Section 81A2.2-2, Paragraph E (April 1998): “OPM computes Customs Service 

cases using deductions to determine the average salary.” 

In this case, OPM in its April 2014 Letter did not state 

that the Remarks in Mr. Grover’s Form 2806 were inaccurate, or otherwise explain them, and it did not even 

 

1 To simplify: If D is the dollar amount of the deduction in a year, and R is the rate, then D/R is the 

amount of pay (P) from which the deduction was taken (R 

x P = D). The actual calculations include a few complications. For example, different portions of pay were subject 

to different deduction rates, and separate deduction 

amounts and deduction rates are given on the Form—

both of which must be converted to pay, with the results 

then added together. But those details are unimportant 

to the issue presented here.

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GROVER v. OPM 7

recognize that there was a striking internal disparity

between the Remarks and deduction information on the 

Form. Accordingly, it did not recognize that the disparity 

might be addressed by seeking more information such as 

the actual pay stubs.

OPM simply asserted that it was calculating earnings 

by using the retirement deductions reported on Form 

2806 and converting them to earnings. J.A. 33. OPM 

said, “Only pay subject to retirement deductions can be 

used to compute an average salary for an annuity,” id., 

seemingly as a legal rule, applicable without inquiry into 

whether the deduction amounts stated on Form 2806 

might be inaccurate. OPM told Mr. Grover: “We used 

retirement deductions for every year to compute your 

average salary.” J.A. 34. 

On that basis, OPM calculated a high-three average 

pay of $88,964. J.A. 35. In contrast, as early as February 

4, 2011, Mr. Grover’s counsel had submitted a detailed 

letter to OPM citing pay stubs as the basis for a detailed 

calculation producing a high-three average of 

$106,278.57.

Mr. Grover appealed to the Board, which had jurisdiction to review OPM’s annuity determination under 5 

U.S.C. § 8347(d)(1). The Board’s assigned administrative 

judge affirmed OPM, and the Board affirmed the administrative judge. Neither the administrative judge nor the 

Board, however, recognized the (now conceded) fact that 

Form 2806 is internally contradictory about the amount of 

overtime pay included in the annual pay counted for the 

retirement annuity in the years in question. Neither 

focused on what OPM or the Board may, could, or should

do in the face of such self-contradictory evidence. 

The administrative judge said that the deductions reported on Form 2806 “necessarily would have included 

any allowable overtime pay” and added: “In fact, [Mr. 

Grover’s] IRR states in the ‘Remarks’ column that the 

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8 GROVER v. OPM

deductions include the relevant yearly statutory maximums of $17,500 per year since 2005.” J.A. 21–22 (emphasis added). But it is now beyond dispute that the 

$17,500 figure was not included in the reported deductions. And the “necessarily would have included” statement disregards the possibility of error.

The Board, for its part, recognized that Mr. Grover 

was “argu[ing] that, based on his pay stubs for the years 

2005 through 2008, his high-three average pay should be 

$106,278.57.” J.A. 5. But the Board made the same pair 

of assertions that the administrative judge made: “retirement deductions . . . would have necessarily included all 

allowable overtime pay,” and Form 2806 “states that 

overtime pay up to the statutory maximums was included 

in [Mr. Grover’s] retirement deductions.” J.A. 6. The 

Board then repeated OPM’s legal ground suggesting that 

the deductions taken are dispositive of the high-three 

average pay calculation even if the amount of the deductions taken was mistaken: “only pay subject to retirement 

deductions may be used to compute average pay for 

retirement purposes.” J.A. 6 n.7. 

Mr. Grover appeals. We have jurisdiction under 28 

U.S.C. § 1295(a)(9).

DISCUSSION

We review the Board’s decision to determine whether 

it is “(1) arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having 

been followed; or (3) unsupported by substantial evidence.” 5 U.S.C. § 7703(c); see Terban v. Dep’t of Energy, 

216 F.3d 1021, 1024 (Fed. Cir. 2000). Applying those 

standards, we must vacate the Board’s decision.

The Board’s decision, following OPM’s April 2014 Letter, strongly appears to rely on an incorrect legal ground. 

The Board asserted that “only pay subject to retirement 

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GROVER v. OPM 9

deductions may be used to compute average pay for 

retirement purposes,” J.A. 6 n.7, just as OPM had stated 

that “[o]nly pay subject to retirement deductions can be 

used to compute an average salary for an annuity,” J.A. 

33. The Board, like OPM, relied on that assertion as a 

basis for using the Form 2806 deductions (converted to 

earnings) without any inquiry into their accuracy, even 

into their consistency with other information on Form 

2806. We therefore read the Board’s statement, and 

OPM’s, as a legal proposition that average-pay calculation 

must be based on information about the deductions reported on Form 2806 as having been taken. That proposition is incorrect, as OPM now recognizes. See DOJ Letter

at 3.

At most, OPM has a “long-standing, OPM-wide practice,” reflected in the Handbook. DOJ Letter at 2. That 

“practice” does not and cannot override the clear statutory 

annuity standard, which provides no room for “excluding 

from the calculation of average salary for retirement 

annuity purposes any pay, including overtime pay under 

COPRA, that is actually received and is properly part of 

the average salary computation.” Id. The deductionconverted-to-earnings method used by OPM will generally 

produce the statutorily required calculation “[p]rovided 

that the employing agency deducts the correct retirement 

contributions as required by law and properly certifies the 

amount of those deductions to OPM.” Id. at 3. But in this 

court OPM now correctly declines to defend the idea, 

reflected in its April 2014 Letter and in the Board’s opinion, that the reported-deduction method is automatically 

legally correct, even when those assumptions do not hold 

true. See Oral Arg. at 15:33–16:32, 23:20–23:40, 26:20–

26:30, 28:00–28:20. 

The Board’s decision is also unsupported by substantial evidence—evidence that a reasonable mind may take 

as sufficient to establish a conclusion. See Dickinson v. 

Zurko, 527 U.S. 150, 162 (1999); Consolo v. Fed. Mar. 

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10 GROVER v. OPM

Comm’n, 383 U.S. 607, 620 (1966). The Board (like the 

administrative judge) read Form 2806 as establishing 

that $17,500 was in fact included in the amounts from 

which deductions had been taken. But OPM now recognizes that the numbers on Form 2806 indicate the opposite. Indeed, OPM now states in plain terms that the 

information on Form 2806 is contradictory, inconsistent, 

and conflicting. The Board, like OPM until recently, 

failed to so recognize. Its contrary premise is conceded by 

OPM to be incorrect.

We have no basis for saying that the errors made by 

the Board, following OPM’s earlier presentations, were 

harmless. They led the Board, like OPM, to see no need 

for further inquiry into the amount of Mr. Grover’s overtime pay. And this is hardly the kind of case in which 

there is no reason to think that further inquiry is likely to 

have been fruitless or unenlightening. Here, it is reasonable to expect that pay stubs could be retrieved that 

would objectively resolve the factual issue. 

OPM makes one argument for nevertheless affirming. 

It points to the regulation we have quoted above, 5 C.F.R. 

§ 831.103, and notes that, in several non-precedential 

decisions, this court has deferred to OPM’s interpretation 

of the regulation as requiring OPM to follow an Individual 

Retirement Record (Form 2806), rather than question its 

accuracy. See Thomas v. Office of Pers. Mgmt., 350 F. 

App’x 448, 451 (Fed. Cir. 2009); Lee v. Office of Pers. 

Mgmt., 301 F. App’x 926, 928 (Fed. Cir. 2008); Rainone v. 

Office of Pers. Mgmt., 249 F. App’x 823, 825 (Fed. Cir. 

2007); see also O’Connell v. Office of Pers. Mgmt., 103 

M.S.P.R. 579, 580–81 (2006). We have no occasion here to 

question OPM’s general view of the regulation. But 

neither the regulation nor any of our non-precedential 

decisions tells OPM what to do when the Form 2806 is 

internally contradictory on the matter in dispute. In such 

a situation, “follow the Form” is not an answer-producing 

directive. Further inquiry is required.

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GROVER v. OPM 11

The case must be remanded to the Board. We do not 

know whether the record before the Board already contains the pay stubs that promise to be dispositive. At oral 

argument before this court, Mr. Grover’s counsel—reading 

from a paper he was holding that he said was such a pay 

stub—stated that he believed the pay stubs were in the 

record. Oral Arg. at 11:20–13:40. Regardless, as OPM 

noted at oral argument before us, the record in the Board 

was not developed with a focus on the apparent need for 

pay stubs as clarification. Oral Arg. at 28:20–28:40. At 

this stage, more than eight years after Mr. Grover retired, 

we have been offered no reason why such pay stubs, if 

authentic, should not, if necessary, be added to the record

to resolve this matter. Indeed, now that the focus has 

been placed on the factual question, perhaps the answer 

will prove sufficiently clear that the parties can quickly 

agree, and no further adversarial proceedings will be 

needed. 

CONCLUSION

The decision of the Board is vacated and the matter 

remanded for further proceedings. 

Costs awarded to Mr. Grover. 

VACATED AND REMANDED

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