United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

G.L., Appellant

and

DEPARTMENT OF TRANSPORTATION, 

FEDERAL AVIATION ADMINISTRATION, 

Renton, WA, Employer

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Docket No. 17-1367

Issued: August 17, 2018

Appearances: Case Submitted on the Record

Howard L. Graham, Esq., for the appellant1

Office of Solicitor, for the Director

ORDER REMANDING CASE

Before:

CHRISTOPHER J. GODFREY, Chief Judge

PATRICIA H. FITZGERALD, Deputy Chief Judge

ALEC J. KOROMILAS, Alternate Judge

On June 12, 2017 appellant, through counsel, filed a timely appeal from a January 25, 2017 

merit decision of the Office of Workers’ Compensation Programs (OWCP). The appeal was 

docketed as No. 17-1367.

By decision dated April 25, 2016, OWCP determined that appellant had forfeited his right 

to compensation for the period September 23, 1997 to December 10, 2013 because he “knowingly”

failed to report employment and earnings on CA-8 and EN1032 forms covering these periods.

2

 It

indicated that appellant had income from a rental property and noted that the wording of the CA-8 

 

1

In all cases in which a representative has been authorized in a matter before the Board, no claim for a fee for legal 

or other service performed on appeal before the Board is valid unless approved by the Board. 20 C.F.R. § 501.9(e). 

No contract for a stipulated fee or on a contingent fee basis will be approved by the Board. Id. An attorney or 

representative’s collection of a fee without the Board’s approval may constitute a misdemeanor, subject to fine or 

imprisonment for up to one year or both. Id.; see also 18 U.S.C. § 292. Demands for payment of fees to a 

representative, prior to approval by the Board, may be reported to appropriate authorities for investigation.

2 OWCP accepted that on July 9, 1997 appellant, then a 50-year-old aviation safety inspector, sustained multiple 

upper and lower extremity conditions due to a slip and fall at work. Appellant stopped work on July 10, 1997. He 

received disability compensation on the daily rolls beginning July 31, 1998. 
2

and EN1032 forms advised him of the need to report earnings and his employment activities related 

to the rental property.

In an April 25, 2016 notice, OWCP advised appellant of its preliminary determination that 

he received a $557,577.17 overpayment of compensation because he failed to declare income from 

a rental property from September 23, 1997 to December 10, 2013 and compensation from this 

period was forfeited. It also informed appellant of its preliminary determination that he was at 

fault in the creation of the overpayment because he “knowingly accepted compensation to which 

[he was] not entitled.”

3

 OWCP advised appellant that he could submit evidence challenging the 

overpayment in writing or at prerecoupment hearing, but that a prerecoupment hearing must be 

requested within 30 days of the preliminary determination.

Appellant requested a telephonic prerecoupment hearing with a representative of OWCP’s 

Branch of Hearings and Review. During the hearing held on December 7, 2016, counsel argued 

that appellant did not engage in “knowing avoidance” of reporting income.

By decision dated January 25, 2017, OWCP’s hearing representative determined that 

appellant received a $306,919.56 overpayment of compensation for the periods September 23, 

1997 to April 24, 1999 and December 6, 2005 to December 10, 2013.

4

 The hearing representative

found that appellant was at fault in the creation of the overpayment because he “knowingly failed 

to report his self-employment activity income on [EN1032] and [CA-8] forms.” Therefore, he 

determined that waiver of recovery of the overpayment was precluded.

5

The Board finds that OWCP failed to provide adequate facts and findings in support of its 

January 25, 2017 decision and that the case must be remanded to OWCP for further development.

In deciding matters pertaining to a given claimant’s entitlement to compensation benefits, 

OWCP is required by statute and regulation to make findings of fact.6 It procedure further specifies 

that a final decision of OWCP “should be clear and detailed so that the reader understands the 

 

3 OWCP’s April 25, 2016 cover letter that accompanied the preliminary finding noted that appellant was at fault 

because he “failed to furnish information which [he] should have known to be material.”

4 OWCP’s hearing representative determined that an overpayment of compensation could not be found for the entire 

period September 23, 1997 to December 10, 2013 because appellant had not completed forms covering the period 

April 25, 1999 to December 5, 2005.

5 The hearing representative required repayment of the overpayment by deducting $6,000.00 from appellant’s 

continuing compensation payments every month.

6 5 U.S.C. § 8124(a) provides that OWCP “shall determine and make a finding of facts and make an award for or 

against payment of compensation.” 20 C.F.R. § 10.126 provides in pertinent part that the final decision of OWCP 

“shall contain findings of fact and a statement of reasons.”
3

reason for the disallowance of the benefit and the evidence necessary to overcome the defect of 

the claim.”

7

 These requirements are supported by Board precedent.8

OWCP did not provide an adequate discussion of the basis of its finding that appellant 

received an overpayment of compensation in the amount of $306,919.56. As noted, it issued an 

April 25, 2016 decision in which it found that appellant forfeited his right to compensation 

between September 23, 1997 and December 10, 2013. While a forfeiture determination could 

ostensibly serve as a basis for a finding that an overpayment of compensation was created, it is 

important to note that in the only OWCP decision presently within the Board’s jurisdiction, i.e., 

the January 25, 2017 decision, OWCP’s hearing representative did not provide any discussion of 

OWCP’s earlier forfeiture determination.9 He did not provide any mention of the relevant 

standards for determining forfeiture or apply the facts of the present case to these standards.10 For 

example, the hearing representative did not discuss section 8106(b) of FECA which provides, in 

relevant part, that an employee who “knowingly” omits or understates any part of his or her 

earnings on an affidavit or report to OWCP forfeits his or her right to compensation with respect 

to any period for which the affidavit or report was required.11

The Board notes that 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, and it is not enough 

to merely establish that there were unreported earnings.12 OWCP’s procedures recognize that 

forfeiture is a penalty and, as a penalty provision, it must be narrowly construed.13 In OWCP’s 

regulations, “knowingly” is defined as: “with knowledge, consciously, willfully or 

intentionally.”

14

In the January 25, 2017 decision, OWCP’s hearing representative did not provide any 

discussion regarding whether, within the context of the forfeiture provision of 5 U.S.C. § 8106(b), 

appellant “knowingly” omitted or understated earnings. To meet this burden, OWCP is required 

 

7 See Federal (FECA) Procedure Manual, Part 2 -- Claims, Disallowances, Chapter 2.1400.5c(3)(e) 

(February 2013).

8 See James D. Boller, Jr., 12 ECAB 45, 46 (1960).

9 Although counsel referenced a prerecoupment hearing with respect to the April 25, 2016 preliminary overpayment 

determination, there is no indication in the record that either he or appellant explicitly appealed the April 25, 2016 

forfeiture determination. 

10 OWCP’s hearing representative provided discussion of appellant’s case under the headings “Fact and Amount of 

Overpayment,” “Fault,” and “Recovery.” He did not mention OWCP’s April 25, 2016 decision regarding forfeiture, 

or provide any indication that he was evaluating the sufficiency of that decision. OWCP’s hearing representative 

noted that counsel had referenced a Board case at the December 7, 2016 prerecoupment hearing (Anthony V. Knox, 50 

ECAB 402 (1999)), but he did not provide any discussion of the forfeiture principles delineated in the case or apply

these principles to the facts of the present case. 

11 5 U.S.C. § 8106(b).

12 See T.P., Docket No. 17-1717 (issued April 11, 2018).

13 See Federal (FECA) Procedure Manual, Part 2 -- Claims, Forfeiture, Chapter 2.1402.5 (May 2012).

14 20 C.F.R. § 10.5(n).
4

to examine closely appellant’s activities and statements.15 In the section of the decision entitled 

“Fact and Amount of Overpayment,” the hearing representative briefly discussed some of 

appellant’s activities with respect to a rental property, but he did not provide any discussion of 

how the specific language of the forms completed by appellant between 1997 and 2013 would 

have alerted him to a need to report rental income on these forms.16 Therefore, the hearing 

representative did not make a reasoned finding in this section of the decision that appellant 

forfeited compensation for “knowingly” omitting or understating earnings under the forfeiture 

provision of 5 U.S.C. § 8106(b).

17

In the section of the January 25, 2017 decision entitled “Fault,” the hearing representative 

did indicate the following: “The claimant knowingly failed to report his self-employment activity 

income on [EN1032] and [CA-8] forms. Consequently the claimant was at fault in the creation of 

the overpayment.” However, he did not provide any explanation for this conclusory statement. 

As noted above, it is not enough to merely establish that there were unreported earnings when 

making a forfeiture determination, and the hearing representative did not explain in this or any 

other section of the decision of how appellant “knowingly” omitted or understated earnings within 

the meaning of the forfeiture provision of 5 U.S.C. § 8106(b).18 Moreover, he made the abovenoted statement in the context of determining whether appellant was at fault in the creation of an

overpayment. The Board notes that the standard for finding fault in the creation of an overpayment 

is different than the standard for finding forfeiture of compensation for a given period.19 

As the hearing representative failed to adequately discuss the sufficiency of OWCP’s 

determination that appellant forfeited his right to compensation between September 23, 1997 and

December 10, 2013, he did not adequately explain the basis for finding that an overpayment of 

compensation was created. For these reasons, OWCP has not adequately affirmed appellant 

regarding the specific reasons for its determination that he received a $306,919.56 overpayment 

of compensation during a portion of that period.

20

 

At present, appellant would not fully understand the reason for the disallowance of the 

benefit and the evidence necessary to overcome the defect of the claim.21 Therefore, the case shall 

 

15 See Terry A. Geer, 51 ECAB 168 (1999).

16 The hearing representative merely noted that “for periods where the claimant failed to report rental income on 

OWCP forms he is not entitled to compensation.”

17 See supra notes 11 through 14.

18 See supra note 12.

19 Section 10.433(a) of Title 20 of the Code of Federal Regulations provides, in relevant part, that an individual will 

be found at fault in the creation of an overpayment if he or she made an incorrect statement as to a material fact which 

he or she knew or should have known to be incorrect, failed to provide information which he or she knew or should 

have known to be material, or accepted a payment which he or she knew or should have known to be incorrect. 

20 C.F.R. § 10.433(a). The Board further notes that, prior to making a finding of fault in the creation of an 

overpayment, an adequate finding should be made that an overpayment was in fact created.

20 See supra notes 6 through 8.

21 See supra note 7.
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be remanded to OWCP for further development of appellant’s claim, including the issuance of a 

de novo decision which contains adequate facts and findings regarding the above-described 

forfeiture and overpayment matters.22

IT IS HEREBY ORDERED THAT the January 25, 2017 decision of the Office of 

Workers’ Compensation Programs is set aside, and the case is remanded to OWCP for further 

action consistent with this order.

Issued: August 17, 2018

Washington, DC

Christopher J. Godfrey, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Alec J. Koromilas, Alternate Judge

Employees’ Compensation Appeals Board

 

22 See R.U., Docket No. 16-0027 (issued March 24, 2016) (remanding case to OWCP to issue a decision containing 

adequate facts and findings with respect to the fact and amount of an overpayment of compensation).