United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

N.D., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

East Brunswick, NJ, Employer 

__________________________________________ 

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Docket No. 13-108 

Issued: September 17, 2014 

Appearances: Case Submitted on the Record

Jason S. Lomax, Esq., for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

MICHAEL E. GROOM, Alternate Judge 

JURISDICTION 

On October 15, 20121 appellant, through counsel, filed a timely appeal of an April 16, 

2012 merit decision of the Office of Workers’ Compensation Programs (OWCP). Pursuant to 

the Federal Employees’ Compensation Act2 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the 

Board has jurisdiction over the merits of this case. 

ISSUES 

The issue are: (1) whether appellant forfeited her right to compensation for the periods 

May 24 through June 17, 2011 and July 16 through 29, 2011 because she knowingly failed to 

 1

 By order dated February 12, 2014, the Board dismissed appellant’s appeal finding that it was not filed within the 

requisite 180 days, pursuant to 20 C.F.R. § 501.3(e). See Order Dismissing Appeal, Docket No. 13-108 (issued 

February 12, 2014). Appellant’s counsel timely filed a petition for reconsideration and submitted evidence of timely 

mailing. See 20 C.F.R. § 501.3(f)(1). By order dated July 22, 2014, the Board granted appellant’s petition for 

reconsideration and reinstated the appeal docketed as No. 13-108. See Order Granting Petition for Reconsideration ̧

Docket No. 13-108 (issued July 22, 2014). 

2

 5 U.S.C. § 8101 et seq. 
2

report earnings from self-employment; (2) whether appellant received an overpayment of 

compensation in the amount of $4,322.37 because she knowingly failed to report earnings from 

self-employment; and (3) whether OWCP properly determined that appellant was at fault in the 

creation of the overpayment, thereby precluding waiver of the recovery. 

On appeal counsel contends that the decision was based on flawed conclusions of law and 

findings of fact. 

FACTUAL HISTORY 

On March 19, 2011 appellant, then a 37-year-old city carrier, filed a traumatic injury 

claim alleging that she injured her right shoulder that day when she closed the door of her postal 

vehicle and heard her shoulder pop. OWCP accepted the claim for right shoulder and upper arm 

sprain. 

On June 3, 17 and July 29, 2011 appellant completed CA-7 forms to claim compensation 

for the periods May 24 through June 17, 2011 and July 16 through 29, 2011. Each form asked 

her to respond to the following: 

“You must report all earnings from employment (outside your federal job); 

include any employment for which you received a salary, wages, income, sales 

commissions, piecework, or payment of any kind during the period(s) claimed in 

Section 2. Include self-employment, involvement in business enterprises, as well 

as service with the military forces. Fraudulent concealment of employment or 

failure to report income may result in forfeiture of compensation benefits and/or 

criminal prosecution. Have you worked outside your federal job for the 

period(s) claimed in Section 2?” (Emphasis in the original.) 

If appellant had worked outside her federal job, the form asked her to provide the name and 

address of the business, the dates worked and the type of work performed. On each form she 

answered “No.” 

In computer printouts dated June 13 and 27, 2011, OWCP issued supplemental roll 

payments to appellant for the period May 24 to June 3, 2011 in the amount of $1,118.73 and for 

the period June 4 to 17, 2011 in the amount of $1,601.82. 

In a July 13, 2011 letter, postal investigators stated that an investigation of appellant 

revealed that she performed in a band called the “Take 5” band as a singer. The investigation 

covered the period April 15 to July 13, 2011 during which appellant performed at various 

restaurants and clubs on the dates of May 21, June 1 and July 7, 2011 based on information 

obtained from a social media page for “Take 5” band and surveillance by the postal investigators. 

The report noted that she completed three claims in which she represented that she earned no 

income and was not involved in any business activity. Appellant was observed and videotaped 

moving her shoulders, twisting her body, singing, standing, dancing, clapping her hands and 

performing other activities. The investigation revealed that she performed at various locations in 

New Jersey during the period April 3 to June 24, 2011. 
3

OWCP also issued a supplemental rolls payment to appellant for the period July 16 to 

July 29, 2011 in the amount of $1,601.82. 

On August 31, 2011 postal investigators submitted a supplemental report which stated 

that appellant had provided false information on three CA-7 claims for compensation forms 

when she stated she was not involved in any business activity, employment or self-employment. 

The CA-7 forms were dated June 3, 17 and 29, 2011 and covered the periods May 24 through 

June 17, 2011 and July 16 through 29, 2011. Attached to the report were invoices and statements 

from managers of the places where appellant performed with her band on May 21, June 4 and 

July 29, 2011. 

On October 24, 2011 OWCP found that appellant had forfeited her entitlement to 

compensation for the periods May 24 through June 17, 2011 and July 16 through 29, 2011 on the 

grounds that she knowingly failed to report earnings as required on her CA-7 forms. It 

determined that appellant knowingly omitted her earnings from performing in the band on each 

of her CA-7 forms dated May 24 through June 17, 2011 and July 16 to July 29, 2011. Therefore 

she forfeited all compensation for that period. OWCP also issued a preliminary determination 

that an overpayment was created in the amount of $4,322.273

 due to appellant’s failure to report 

her earnings from outside employment on the CA-7 forms. It further found her with fault in the 

creation of the overpayment because she knowingly omitted her earnings from outside 

employment. OWCP informed appellant that, if she disagreed with the preliminary 

determination, she could, within 30 days, submit evidence or argument to OWCP, or request a 

prerecoupment hearing with the Branch of Hearings and Review. Appellant did not respond. 

On November 1, 2011 appellant’s counsel requested a hearing before an OWCP hearing 

representative, which was held on February 8, 2012. 

By decision dated April 16, 2012, an OWCP hearing representative affirmed the finding 

of forfeiture for the periods May 24 through June 17, 2011 and July 16 to 29, 2011 due to 

appellant’s failure to report her employment activities as required by the CA-7 forms. He 

finalized the overpayment in the amount of $4,322.37 overpayment as a result of the forfeiture. 

OWCP found appellant at fault in the creation of the overpayment and found the entire amount 

due and payable. 

LEGAL PRECEDENT -- ISSUE 1 

The Secretary of Labor may require a partially disabled employee to report her earnings 

from employment or self-employment, by affidavit or otherwise, in the manner and at the time 

the Secretary specifies. An employee who knowingly omits or understates any part of her 

earnings forfeits her right to compensation with respect to any period for which the affidavit or 

report was required.4 

 3

 There appears to be an error in addition as the correct total should reflect an overpayment in the amount of 

$4,322.37 not $4,322.27. 

4

 5 U.S.C. § 8106(b)(2); 20 C.F.R. § 10.529. See Joan Ross, 57 ECAB 694 (2006).
4

The employee, however, can only be subjected to the forfeiture provision of 5 U.S.C. 

§ 8106 if he or she knowingly failed to report employment or earnings. It is not enough merely 

to establish that there were unreported earnings. The Board has recognized that forfeiture is a 

penalty and thus must be narrowly construed.5

 The term knowingly is defined by regulations as 

with knowledge, consciously, willfully or intentionally.6

ANALYSIS -- ISSUE 1 

OWCP found that appellant forfeited her right to compensation from May 24 to June 17, 

2011 and July 16 to 29, 2011 on the basis that she knowingly failed to report employment 

activities and earnings on three CA-7 forms. 

On the CA-7 forms dated and signed by appellant on June 3, 17 and July 29, 2011, she 

answered “No” to section 3 which instructed her to report all earnings, whether from 

employment or self-employment or involvement in a business enterprise and not just salary or 

wages, but income, sales commissions, piecework or payment of any kind. The memoranda of 

the postal inspectors provided dates and places where appellant and her band performed on 

May 21, June 4 and July 29, 2011 and documented invoices and statements from the managers at 

locations where appellant and the band performed. The evidence establishes that appellant 

knowingly failed to report earnings from her self-employment from these periods. Therefore, 

she is subject to the forfeiture provision of section 8106(b). 

On appeal counsel contends that appellant did not consider the earnings her band 

received as earnings. He stated that her participation was limited, the bookings sporadic and the 

actual remuneration was minimal. Counsel also argued that the earnings were de minimis and, 

thus, insufficient to trigger the penalty provisions of section 8106(b)(2). The Board notes, 

however, that the plain language of Form CA-7, section 3, was sufficient to put appellant on 

notice that she was required to report all earnings outside her federal job even if considered de 

minimis.

7

 Appellant knew that she had earnings from her band engagements, but answered “No” 

to section 3 on the forms submitted to OWCP. 

The clear language of section 3 instructed appellant to report all earnings, whether from 

employment or self-employment or involvement in a business enterprise and not just salary or 

wages, but income, sales commissions, piecework or payment of any kind. The purpose was one 

of full disclosure so that OWCP could determine whether the earnings, under the circumstances, 

made any difference to the amount of compensation appellant should receive. Claimants must 

report all earnings outside their federal jobs, no matter the amount or source. The Board finds 

that appellant knowingly omitted her earnings from her singing in a band and thereby forfeited 

her entitlement to compensation for the period in question. 

 5 P.M., Docket No. 07-2169 (issued March 3, 2009); Anthony A. Nobile, 44 ECAB 268 (1992). 

6

 20 C.F.R. § 10.5(n). See J.J., 59 ECAB 542 (2008); Harold F. Franklin, 57 ECAB 387 (2006).

7 Cf. Kenneth T. Truhlar, Docket No. 05-1500 (issued January 12, 2006) (Have you worked outside your federal 

job during the period(s) claimed in [s]ection 2?) (Include salaried, self-employed, commissioned, volunteer, etc.); 

Karen Spurling, 56 ECAB 189 (2004); Billy J. McCamey, Docket No. 00-2725 (issued June 11, 2002) (finding that 

the Form CA-8s that the claimant completed were insufficient to support a forfeiture of compensation). 
5

LEGAL PRECEDENT -- ISSUE 2 

Section 10.529 of OWCP’s implementing regulations provide as follows: 

“(a) If an employee knowingly omits or understates any earnings or work activity 

in making a report, he or she shall forfeit the right to compensation with respect to 

any period for which the report was required. A false or evasive statement, 

omission, concealment or misrepresentation with respect to employment activity 

or earnings in a report may also subject an employee to criminal prosecution. 

“(b) Where the right to compensation is forfeited, OWCP shall recover any 

compensation already paid for the period of forfeiture pursuant to 5 U.S.C. § 8129 

[recovery of overpayments] and other relevant statues.”8 

ANALYSIS -- ISSUE 2 

If a claimant has any earnings during a period covered by CA-7 forms which she 

knowingly failed to report, she is not entitled to any compensation for any portion of the period 

covered by the report, even though, as here, she may only have had earnings during a small 

portion of that period.9 Statutory and regulatory provisions require that OWCP recover all 

compensation for the period of forfeiture.10 

CA-7 forms submitted by appellant for the periods May 24 through June 17, 2011 and 

July 16 to 29, 2011 reflected no other earnings from employment. OWCP paid her 

compensation in the amount of $4,322.37, for the periods May 24 to June 17, 2011 and July 16 

to 29, 2011. It properly found that appellant forfeited her entitlement to compensation during 

this time because she failed to report employment activities and earnings as a singer in a band. 

The record contains documentation of OWCP’s calculations and there is no contrary evidence. 

Therefore, there exists an overpayment of compensation, due to the forfeiture, in the amount of 

$4,322.37.11

LEGAL PRECEDENT -- ISSUE 3 

OWCP may consider waiving an overpayment only if the individual to whom it was 

made was not at fault in accepting or creating the overpayment. Each recipient of compensation 

benefits is responsible for taking all reasonable measures to ensure that payments appellant 

received from OWCP are proper. The recipient must show good faith and exercise a high degree 

of care in reporting events which may affect entitlement to or the amount of benefits. A recipient 

who has done any of the following will be found to be at fault with respect to creating an 

 8

 20 C.F.R. § 10.429. See Harold F. Franklin, supra note 6. 

9 Robert Ringo, 53 ECAB 258 (2001). 

10 5 U.S.C. § 8129; see M.C., Docket No. 10-881 (issued February 7, 2011); B.T., Docket No. 09-2190 (issued 

August 6, 2010); Joan Ross, supra note 4.

11 T.O., Docket No. 12-426 (issued July 23, 2012). 
6

overpayment: (1) Made an incorrect statement as to a material fact which he or she knew or 

should have known to be incorrect; (2) Failed to provide information which he or she knew or 

should have known to be material; or (3) Accepted a payment which he or she knew or should 

have known to be incorrect (this provision applies only to the overpaid individual).12 

Whether or not OWCP determines that an individual was at fault with respect to the 

creation of an overpayment depends on the circumstances of the overpayment. The degree of 

care expected may vary with the complexity of those circumstances and the individual’s capacity 

to realize that he or she is being overpaid.13

ANALYSIS -- ISSUE 3 

The Board finds that appellant is at fault in the creation of the overpayment. 

In this case, OWCP applied the first and second standards in determining that appellant 

was at fault in creating the overpayment. Appellant signed CA-7 forms dated June 3, 17 and 

July 29, 2011 where she indicated that she did not have any other earnings from employment. 

As she indicated that she had no employment or earnings from employment during the covered 

periods, she made an incorrect statement as to a material fact which she knew or should have 

known to be incorrect and failed to furnish information which she knew or should have known to 

be material to OWCP.14

CONCLUSION 

The Board finds that appellant forfeited her right to compensation for the periods May 24 

to June 17, 2011 and July 16 to 29, 2011 and that an overpayment was created in the amount of 

$4,322.37. The Board further finds that OWCP properly found her at fault in creating the 

overpayment, thereby precluding waiver of recovery. 

 12 20 C.F.R. § 10.433(a). 

13 Id. at 10.433(b).

14 Supra note 12. 
7

ORDER 

IT IS HEREBY ORDERED THAT the decision of the Office of Workers’ 

Compensation Programs dated April 16, 2012 is affirmed. 

Issued: September 17, 2014 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board