United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

G.U., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Oakland, CA, Employer 

__________________________________________ 

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Docket No. 14-1705 

Issued: June 5, 2015 

Appearances: Case Submitted on the Record

Geraldine Manzo, for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On July 4, 2014 appellant filed a timely appeal from the January 16, 2014 merit decision 

of the Office of Workers’ Compensation Programs (OWCP). Pursuant to the Federal 

Employees’ Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has 

jurisdiction over the merits of this case.2

ISSUES 

The issues are: (1) whether OWCP properly found that appellant forfeited her right to 

compensation for the period November 30, 2009 to August 15, 2011 because she knowingly 

 1

 5 U.S.C. §§ 8101-8193. 

2

 Under the Board’s Rules of Procedure, an appeal must be filed within 180 days from the date of issuance of an 

OWCP decision. An appeal is considered filed upon receipt by the Clerk of the Appellate Boards. See 20 C.F.R. 

501.3(e)-(f). One hundred and eighty days from January 16, 2014, the date of OWCP’s last decision, was 

July 15, 2014. Since using August 4, 2014, the date the appeal was received by the Clerk of the Appellate Boards 

would result in the loss of appeal rights, the date of the postmark is considered the date of filing. The date of the 

U.S. Postal Service postmark is July 4, 2014, rendering the appeal timely filed. See 20 C.F.R. 501.3(f)(1). 
2

failed to report her employment activities for this period; and (2) whether it properly found an 

overpayment in the amount of $72,782.49. 

FACTUAL HISTORY 

On October 5, 1999 appellant, then a 28-year-old clerk, filed an occupational disease 

claim (Form CA-2) alleging that she sustained an injury due to the repetitive work duties she 

performed. OWCP accepted that appellant sustained a right wrist strain, bilateral tendinitis, and 

an aggravation of bilateral Keinbock’s disease. 

On January 30, 2002 appellant underwent a left lunate graft and carpectomy and, on 

April 28, 2003, she underwent a left proximal carpectomy. On December 5, 2003 appellant 

underwent a lunate graft on the right. These procedures were authorized by OWCP. Appellant 

stopped work on April 28, 2003 and returned to work on a part-time basis on June 9, 2003. She 

stopped working completely on December 4, 2003 and received total disability compensation on 

the periodic rolls beginning December 28, 2003. 

On February 1, 2005 OWCP granted appellant a schedule award for 10 percent 

permanent impairment of her right arm and 33 percent permanent impairment of her left arm. 

The award ran for 134.16 weeks from October 31, 2004 to May 28, 2007. After the schedule 

award stopped running, appellant received disability compensation on the daily rolls beginning 

November 30, 2009. She later returned to the periodic rolls. 

By decision dated February 24, 2012, OWCP determined that, after failing to participate 

in vocational rehabilitation efforts, appellant had the wage-earning capacity of a customer 

complaint clerk and it reduced her compensation to reflect this wage-earning capacity. In a 

September 20, 2012 decision, an OWCP hearing representative affirmed OWCP’s February 24, 

2012 decision. 

Appellant completed and signed EN1032 forms on May 24, 2010 and August 15, 2011. 

She signed the forms and marked “no” to attest that she had not worked for any employer and 

was not self-employed or involved in any business enterprise for the 15 months prior to the date 

that she signed each form.3

 The EN1032 forms required appellant to report all self-employment 

or involvement in business enterprises. These included but were not limited to farming, sales 

work, operating a business, including a store or a restaurant, and providing services in exchange 

for money, goods, or other services. The kinds of services appellant was required to report 

included keeping books and records, or managing and/or overseeing a business of any kind, 

including a family business. 

The EN1032 forms further provided that, even if appellant’s activities were part time or 

intermittent, she was required to report them. Appellant had to report as her “rate of pay” what 

she was paid, including the value of such things as housing, meals, clothing, and reimbursed 

expenses, if they were received as part of her employment. She was required to report any work 

or ownership interest in any business enterprise, even if the business lost money or if profits or 

income were reinvested or paid to others. If appellant performed any duties in any business 

 3

 Appellant also responded “no” on both to the question about whether she was performing volunteer work. 
3

enterprise for which she was not paid, she was required to show as rate of pay what it would 

have cost the employer or organization to hire someone to perform the work or duties she did, 

even if her work was for herself or a family member or relative. 

In a September 21, 2012 report, the Office of Inspector General (OIG) for the employing 

establishment found after an investigation in August 2011 that appellant was actively involved in 

a business. The report contained evidence showing that appellant worked at a Quiznos sandwich 

restaurant in Antioch, CA, ostensibly as a manager, from the time of the opening through around 

the time that the report was completed. Internet advertisements from May and June 2008 stated 

that the Quiznos restaurant was a family-owned franchise run by appellant and her sister. 

Appellant’s sister was interviewed by an OIG agent in May 2012 and indicated that appellant 

worked as a manager at the Quiznos restaurant and would work a few hours, five to six times per 

week. An employee at the Quiznos restaurant was questioned by an OIG agent in May 2012 and 

reported that appellant tended to come in on a daily basis at 11:00 a.m. to check on the operation, 

fill out forms, and work on the computer. Appellant occasionally delivered party trays. The 

employee, who had worked at the restaurant for five years, stated that she considered appellant to 

be the daytime manager of the restaurant and appellant’s sister to be the night manager. 

The September 21, 2012 investigative report of the OIG includes a business card which 

listed appellant as “owner/manager” of the restaurant. It also contains records of surveillance of 

appellant between late 2011 and early 2012. Appellant was observed entering through the 

employee’s entrance of the restaurant, engaging with customers from behind the counter, and 

leaving the premises with trays of food for the purpose of delivery to customers. The OIG report 

also notes that on February 16, 2011 appellant signed a City of Antioch Business License 

Renewal. In a May 2012 interview, appellant stated to an OIG agent that she watched the 

Quiznos restaurant to make sure everything was going okay and oversaw the employees. She 

indicated that she had been at the Quiznos restaurant since it opened in 2007. Appellant stated 

that it was a family business owned by her parents, but that she did not have a title or receive 

pay. She stated that she sometimes handed customers their orders and delivered sandwiches two 

or three times a day when she was at the Quiznos restaurant. 

By decision dated June 20, 2013, OWCP determined that appellant’s entitlement to 

compensation paid during the period November 30, 2009 to August 15, 2011, which totaled 

$72,782.49, was forfeited. It determined that appellant knowingly failed to report her work 

activities at a Quiznos restaurant on the two EN1032 forms that she signed on May 24, 2010 and 

August 15, 2011. Each form covered a reporting period of 15 months prior to the signing of each 

form.4

 An investigative memorandum produced by the OIG for the employing establishment 

showed that appellant had engaged in work activity during this period which she should have 

reported. 

In a June 20, 2013 letter, OWCP advised appellant that it had made a preliminary 

determination that she was overpaid $72,782.49 for the period November 30, 2009 to August 15, 

2011 and was at fault in the creation of the overpayment because she knowingly accepted 

 4

 OWCP noted that the May 24, 2010 Form EN1032 actually covered a period that began prior to November 30, 

2009, but that the period of forfeiture was declared to November 30, 2009 to August 15, 2011 because appellant did 

not begin to receive disability compensation from OWCP until November 30, 2009. 
4

compensation to which she was not entitled. Appellant disagreed with the preliminary 

overpayment decision and requested a conference with OWCP which was held on 

August 13, 2013. 

By decision dated September 12, 2013, OWCP finalized the overpayment determination 

and determined that $300.00 should be deducted from appellant’s continuing periodic 

compensation payments. 

Appellant disagreed with the June 20, 2013 forfeiture decision and requested a hearing 

with an OWCP hearing representative. At the November 13, 2013 hearing, it was argued that 

appellant had not made an incorrect statement on a Form EN1032 because appellant did not 

know that she had made an incorrect statement until after speaking with a claims examiner. 

Appellant did not own the restaurant where she was alleged to have worked. Regarding the 

business license which reflected her as the owner, she explained that she only signed the 

documents for her sister. Appellant stated that appellant’s father was the owner of the restaurant 

and that she often interpreted for him. It was explained that the Form EN1032 requested that all 

employment activities be reported even if pay was not received. It was argued that appellant had 

legitimately answered “no” on the EN1032 forms with respect to work for an employer, selfemployment, and involvement in any business enterprise. Appellant believed, given the manner 

in which the forms were written, that she did not have to report work activity if, as in her case, 

she did not earn any income while working. She allegedly completed the EN1032 forms in an 

appropriate manner based on the way the EN1032 forms were written. 

In a decision dated January 16, 2014, an OWCP hearing representative finalized the 

June 20, 2013 preliminary finding that she had forfeited her right to compensation for the period 

November 30, 2009 to August 15, 2011. He found that appellant knowingly failed to report 

work activities as required by the EN1032 forms she completed which covered the period of 

forfeiture. 

LEGAL PRECEDENT 

Section 8106(b) of FECA5 provides in pertinent part: 

“The Secretary of Labor may require a partially disabled employee to report his 

earnings from employment or self-employment, by affidavit or otherwise, in the 

manner and at the times the Secretary specifies.... An employee who -- 

 (1) fails to make an affidavit or report when required; or 

(2) knowingly omits or understates any part of his earnings; 

forfeits his right to compensation with respect to any period for which the 

affidavit or report was required. Compensation forfeited under this 

subsection, if already paid, shall be recovered by a deduction from the 

 5

 5 U.S.C. § 8106(b). 
5

compensation payable to the employee or otherwise recovered under 

section 8129 of this title, unless recovery is waived under that section.”6

 An employee can only be subjected to the forfeiture provision of 5 U.S.C. § 8106(b) if he 

or she “knowingly” omitted or understated earnings. It is not enough to merely establish that 

there were unreported earnings. OWCP procedures recognize that forfeiture is a penalty,7

 and, 

as a penalty provision, it must be narrowly construed.8 In its regulations, “knowingly” is defined 

as: “with knowledge, consciously, willfully or intentionally.”9

 To meet this burden, OWCP is 

required to examine closely appellant’s activities and statements. It may meet this burden 

without an admission by an employee if the circumstances of the case establish that he or she 

failed to reveal fully and truthfully the full extent of his or her employment activities and 

earnings.10

Section 10.5(g) of OWCP regulations define earnings from employment or selfemployment as follows: 

“(1) Gross earnings or wages before any deductions and includes the value of 

subsistence, quarters, reimbursed expenses and any other goods or services 

received in kind as remuneration; or 

“(2) A reasonable estimate of the cost to have someone else perform the duties of 

an individual who accepts no remuneration. Neither lack of profits, nor the 

characterization of the duties as a hobby, removes an unremunerated individual’s 

responsibility to report the estimated cost to have someone else perform his or her 

duties.”11

ANALYSIS 

 The Board finds that OWCP properly found that appellant forfeited her right to 

compensation from November 30, 2009 to August 15, 2011. In the present case, the record 

establishes that appellant knowingly omitted employment activities on EN1032 forms covering 

the period November 30, 2009 to August 15, 2011. In these forms, signed on May 24, 2010 and 

August 15, 2011, OWCP notified appellant of her responsibility to complete the forms and 

 6

 While section 8106(b)(2) refers only to partially disabled employees, the Board has held that the test for 

determining partial disability is whether, for the period under consideration, the employee was in fact either totally 

disabled or merely partially disabled, and not whether she received compensation for that period for total or partial 

loss of wage-earning capacity. Ronald H. Ripple, 24 ECAB 254, 260 (1973). The Board explained that a totally 

disabled employee normally would not have any employment earnings and therefore a statutory provision about 

such earnings would be meaningless. Id. at 260. 

7

 Federal (FECA) Procedure Manual, Part 2 -- Claims, Forfeiture, Chapter 2.1402.8 (May 2012). 

8 Christine P. Burgess, 43 ECAB 449 (1992). 

9

 20 C.F.R. § 10.5(n); see Anthony A. Nobile, 44 ECAB 268 (1992). 

10 Terry A. Geer, 51 ECAB 168 (1999). 

11 20 C.F.R. § 10.5(g); see Monroe E. Hartzog, 40 ECAB 329 (1988). 
6

provide relevant information concerning her employment status and earnings during the periods 

covered by the forms. 

 The record reflects that appellant performed substantial unreported work activity during 

the period of the forfeiture. In a September 21, 2012 report, the OIG for the employing 

establishment indicated that an investigation established that appellant was actively involved in a 

business. The report contained substantial evidence showing that appellant worked at a Quiznos 

sandwich restaurant in Antioch, CA, ostensibly as a manager, from the time of the opening 

through around the time that the report was completed. In a May 2012 interview, appellant 

stated to an OIG agent that she watched the Quiznos restaurant to make sure everything was 

going okay and that she oversaw the employees. She indicated that she had been at the Quiznos 

restaurant since the place opened in 2007. Appellant stated that she sometimes handed 

customers their orders and delivered sandwiches two or three times a day when she was at the 

Quiznos restaurant. 

 The EN1032 forms signed by appellant used such terms as “business” and “enterprise” to 

explain the obligation for reporting all forms of employment, self-employment, and earnings. 

They noted that she was required to report involvement in a business enterprise including 

working in a store or a restaurant. The explicit language of the EN1032 forms advised appellant 

that the nature of her work at Quiznos would require her to report such employment activities on 

the forms. Appellant’s signing of strongly-worded certification clauses on the EN1032 forms 

further shows that she was aware of the materiality of the failure to report her employment. 

 Under these circumstances, the Board concludes that appellant “knowingly” omitted her 

earnings under section 8106(b)(2) of FECA by failing to report her employment activities at the 

Quiznos restaurant on the applicable EN1032 forms covering the period November 30, 2009 to 

August 15, 2011.12 At a hearing with an OWCP hearing representative, appellant’s 

representative argued that appellant legitimately answered “no” on the EN1032 forms with 

respect to work for an employer, self-employment, and involvement in any business enterprise 

because she believed, given the manner in which the forms were written, that she did not have to 

report work activity if, as in her case, she did not earn any income while working. On appeal, 

appellant offered a similar argument for not reporting her work activity. However, the forms 

require that, if she was not paid, appellant was required to show as rate of pay what it would 

have cost the employer or organization to hire someone to perform the work or duties she did. 

Appellant did not report her work activities despite the unambiguous requirement that she report 

them even if she was not paid or the activities were intermittent or sporadic. Accordingly, the 

Board finds that OWCP properly determined that appellant forfeited her right to compensation 

from November 30, 2009 to August 15, 2011. 

Appellant may submit new evidence or argument with a written request for 

reconsideration to OWCP within one year of this merit decision, pursuant to 5 U.S.C. § 8128(a) 

and 20 C.F.R. §§ 10.605 through 10.607. 

 12 See supra notes 6 through 10. 
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CONCLUSION 

The Board finds that OWCP properly found that appellant forfeited her right to 

compensation for the period November 30, 2009 to August 15, 2011 because she knowingly 

failed to report her employment activities for this period. 

ORDER 

IT IS HEREBY ORDERED THAT the January 16, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: June 5, 2015 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board