United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.F., Appellant 

and 

DEPARTMENT OF VETERANS AFFAIRS, 

VETERANS ADMINISTRATION MEDICAL 

CENTER, St. Cloud, MN, Employer 

__________________________________________ 

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Docket No. 15-0980 

Issued: September 26, 2016 

Appearances: Case Submitted on the Record

Jesse C. Stewart, Esq., for the appellant1

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On March 31, 2015 appellant timely appealed a January 29, 2015 merit decision of the 

Office of Workers’ Compensation Programs (OWCP).2

 Pursuant to the Federal Employees’ 

Compensation Act3

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

the merits of the claim. 

 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) (2014). 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 (2006). Demands for 

payment of fees to a representative, prior to approval by the Board, may be reported to appropriate authorities for 

investigation. 

2

 Appellant initially filed this appeal pro se and then obtained legal representation on April 10, 2015. Her counsel 

subsequently requested oral argument. However, the Board exercised its discretion and denied the request pursuant 

to 20 C.F.R. § 501.5(a). See Order Denying Request for Oral Argument, Docket No. 15-0980 (issued 

August 17, 2016). 

3

 5 U.S.C. § 8101 et seq. 
2

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $141,365.35 for the period June 17, 2005 through August 2, 2008; and (2) whether 

she was at fault in creating the overpayment, thereby precluding waiver of recovery. 

FACTUAL HISTORY 

Appellant, a 76-year-old former quality assurance clinical reviewer, sustained injuries to 

her neck, low back, right shoulder, and right knee/leg when she slipped and fell at work on 

September 9, 1990 (File No. xxxxxx004). Her accepted conditions include low back strain, right 

knee/leg strain, right shoulder impingement, aggravation of preexisting cervical strain, 

aggravation of spinal stenosis, and permanent aggravation of lumbar degenerative joint disease. 

Appellant sustained another work-related traumatic injury on July 26, 1993, which OWCP 

initially accepted for left knee degenerative arthritis (File No. xxxxxx039).4 On September 25, 

1995 she underwent left knee arthroscopic surgery, and on November 29, 1995 she had lumbar 

surgery. OWCP authorized both surgical procedures. 

Effective May 11, 2002 appellant accepted a disability retirement annuity from the Office 

of Personnel Management (OPM). However, she subsequently elected to receive FECA wageloss benefits in lieu of OPM benefits. 

On September 18, 2003 OWCP terminated appellant’s medical benefits with respect to 

her left knee condition and denied authorization for left knee arthroplasty. In a separate decision, 

also dated September 18, 2003, it terminated appellant’s medical benefits with respect to her 

right knee/leg strain and aggravation of preexisting cervical strain. However, appellant remained 

eligible for medical benefits with respect to her accepted lumbar and right shoulder conditions. 

By decision dated December 22, 2003, OWCP terminated appellant’s entitlement to 

wage-loss compensation and schedule award benefits because of her refusal to accept suitable 

work, pursuant to 5 U.S.C. § 8106(c)(2).5

 It issued its December 22, 2003 decision under File 

No. xxxxxx039. Appellant requested reconsideration. 

 4

 OWCP subsequently expanded the July 26, 1993 traumatic injury claim to include exacerbation of chronic pain 

of the left knee and right shoulder. Additionally, it combined the September 9, 1990 and July 26, 1993 traumatic 

injury claims and designated the latter claim as the master File No. (xxxxxx039). 

5

 On August 20, 2003 the employing establishment offered appellant a limited-duty assignment as a social 

services assistant, which appellant declined. On September 29, 2003 OWCP advised appellant that it considered the 

offered position suitable in accordance with the July 11 and September 28, 2001 medical restrictions identified by 

Dr. Teresa L. Gurin, a Board-certified physiatrist and impartial medical examiner. Additionally, it advised appellant 

that she had 30 days to either accept the job offer or submit factual and/or medical evidence explaining her 

continued refusal. Appellant did not accept the position citing medical evidence indicating an inability to resume 

work due to her orthopedic condition and chronic pain. On October 30, 2003 OWCP indicated that it had 

considered appellant’s reasons for refusing the position and did not find them to be valid. Consequently, it afforded 

appellant an additional 15 days to accept the offered position and arrange for a report date. Moreover, OWCP 

advised appellant that, if she did not accept the position by November 14, 2003, her entitlement to wage-loss 

compensation and schedule award benefits would be terminated in accordance with 5 U.S.C. § 8106(c)(2). 
3

On January 3, 2005 OWCP denied modification of its December 22, 2003 decision 

terminating appellant’s entitlement to wage-loss compensation and schedule award benefits 

pursuant to 5 U.S.C. § 8106(c)(2). 

On June 17, 2005 appellant underwent a left total knee arthroplasty, which OWCP 

authorized under her September 9, 1990 traumatic injury claim (File No. xxxxxx004). 

By letter dated September 14, 2005, OWCP advised appellant that she was eligible to 

receive compensation for her “left total knee replacement only.” (Emphasis in the original.) It 

specifically referenced appellant’s September 9, 1990 employment injury under File No. 

xxxxxx004. Appellant subsequently filed a claim for compensation (Form CA-7) referencing 

File No. xxxxxx004, which the employing establishment forwarded to OWCP on 

October 5, 2005. 

On November 22, 2005 OWCP advised appellant that she was entitled to wage-loss 

compensation beginning June 17, 2005. It placed her on the periodic compensation rolls 

effective October 30, 2005. Although appellant filed her Form CA-7 under the September 9, 

1990 claim (File No. xxxxxx004), OWCP’s November 22, 2005 award letter referenced File No. 

xxxxxx039 with a July 26, 1993 date of injury. Appellant had been receiving OPM retirement 

benefits, but elected instead to receive FECA wage-loss compensation effective June 17, 2005. 

OWCP continued to pay her wage-loss compensation for temporary total disability through 

August 2, 2008. For this period, June 17, 2005 through August 2, 2008, it paid appellant 

$141,365.35. 

Effective August 3, 2008 OWCP terminated appellant’s wage-loss compensation in light 

of its December 22, 2003 decision sanctioning her under 5 U.S.C. § 8106(c)(2).6

 OPM 

subsequently resumed payment of retirement benefits. 

More than five years elapsed before OWCP initiated overpayment proceedings. The 

action was prompted by a series of inquiries from the employing establishment beginning in 

October 2013. OWCP initially disagreed with the employing establishment’s position that an 

overpayment existed. Furthermore, it questioned whether it had properly suspended 

compensation benefits in August 2008, but the employing establishment was persistent in 

challenging appellant’s receipt of compensation for the period June 17, 2005 through 

August 2, 2008. 

On April 4, 2014 OWCP issued a preliminary determination of an overpayment of 

compensation in the amount of $141,365.35. It explained that because appellant had been 

sanctioned under 5 U.S.C. § 8106(c)(2) effective December 27, 2003, she was not entitled to the 

wage-loss compensation she received for the period June 17, 2005 through August 2, 2008. 

Additionally, OWCP determined that appellant was at fault in creating the overpayment as she 

knowingly accepted compensation she was not entitled to receive. 

Appellant timely requested a prerecoupment hearing before an OWCP hearing 

representative, which was held on November 13, 2014. She challenged the overpayment on the 

 6

 OWCP initially discovered the error in May 2007, but did not suspend compensation at the time. It revisited the 

issue more than a year later when responding to a July 21, 2008 Congressional inquiry. 
4

basis that OWCP advised her on September 14, 2005 that she was eligible to receive 

compensation for her left knee replacement.7 Additionally, appellant submitted an overpayment 

recovery questionnaire (Form OWCP-20), which revealed that her then-current monthly income 

($3,856.85) exceeded her monthly expenses ($3,154.69) by more than $700.00. 

In a January 29, 2015 decision, an OWCP hearing representative finalized the 

preliminary overpayment determination in all respects, including finding appellant at fault. 

Notwithstanding OWCP’s September 14, 2005 correspondence advising appellant that she was 

eligible to receive compensation, the hearing representative found that the December 22, 2003 

decision put appellant on notice that she was not entitled to additional compensation under File 

No. xxxxxx039. Because appellant was at fault in creating the overpayment, the hearing 

representative denied waiver of recovery. Additionally, she found that appellant’s monthly 

income exceeded her monthly expenses, and therefore, she could repay $500.00 each month.8

LEGAL PRECEDENT -- ISSUE 1 

A partially disabled employee who refuses or neglects to work after suitable work is 

offered to, procured by, or secured for him or her is not entitled to compensation.9

 It is the 

employee’s burden to show that this refusal or failure to work was reasonable or justified.10 

Whether an employee has the ability to perform an offered position is primarily a medical 

question that must be resolved by the medical evidence.11 In evaluating the suitability of a 

particular position, OWCP must consider the employment-related condition(s), as well as 

preexisting and subsequently acquired medical conditions.12 If medical reports in the file 

document a condition which has arisen since the compensable injury, and this condition disables 

the claimant from the offered job, the position will be considered unsuitable even if the 

subsequently acquired condition is not work related.13

When OWCP considers a job to be suitable, it shall advise the employee of its finding 

and afford her 30 days to either accept the job or present any reasons to counter OWCP’s finding 

of suitability.14 If the employee presents such reasons and OWCP determines that the reasons 

 7

 Appellant also noted that OWCP’s claims examiner who advised her of her eligibility on September 14, 2005 

was the same individual who issued the April 4, 2014 preliminary determination and found her at fault for accepting 

those payments. 

8

 OPM has been withholding funds from appellant’s federal retirement annuity. Because appellant is not 

currently receiving FECA compensation benefits, the manner in which OWCP recovers the overpayment is not an 

issue currently before the Board. See Judith A. Cariddo, 55 ECAB 348, 353 (2004). 

9

 5 U.S.C. § 8106(c)(2); 20 C.F.R. § 10.517. 

10 Id. at § 10.517. 

11 Gayle Harris, 52 ECAB 319, 321 (2001). 

12 Id.; Martha A. McConnell, 50 ECAB 129, 132 (1998). 

13 Federal (FECA) Procedure Manual, Part 2 -- Claims, Job Offers & Return to Work, Chapter 2.814.4c(7) 

(June 2013). 

14 20 C.F.R. § 10.516. 
5

are unacceptable, it will notify the employee of that determination and further inform the 

employee that she has 15 days within which to accept the offered work without penalty.15 If the 

employee declines the position after having received both a 30-day notice and a 15-day notice, 

OWCP will terminate entitlement to further wage-loss compensation and schedule award 

benefits.16 However, the employee remains entitled to medical benefits.17

ANALYSIS -- ISSUE 1 

By decision dated December 22, 2003, OWCP terminated appellant’s entitlement to 

wage-loss compensation and schedule award benefits pursuant to 5 U.S.C. § 8106(c)(2). On 

January 3, 2005 OWCP denied modification of its December 22, 2003 decision. Neither 

appellant nor her representative timely requested further review of OWCP’s January 3, 2005 

merit decision.18 Accordingly, the December 22, 2003 decision remains in effect to date, thereby 

precluding entitlement to compensation benefits on or after December 27, 2003. 

On appeal, counsel argues that the December 22, 2003 decision only pertained to File No. 

xxxxxx039, and therefore, appellant was eligible to receive wage-loss compensation under File 

No. xxxxxx004, as indicated by OWCP in its September 14, 2005 correspondence. Although 

OWCP’s September 14, 2005 correspondence advised that appellant was eligible to receive 

compensation for her “left total knee replacement only,” and specifically referenced her 

September 9, 1990 injury under File No. xxxxxx004, OWCP ultimately paid compensation under 

File No. xxxxxx039.19 The November 22, 2005 wage-loss compensation award letter 

specifically referenced File No. xxxxxx039 with a July 26, 1993 date of injury. 

Having refused an offer of suitable employment, appellant was not entitled to further 

compensation on all claims where the injury occurred prior to OWCP’s December 22, 2003 

termination decision.20 Despite OWCP’s authorization of the June 2005 left total knee 

arthroplasty, appellant was not entitled to wage-loss compensation she received for the period 

June 17, 2005 through August 2, 2008. The record reveals that OWCP overpaid her 

$141,365.35. Accordingly, the Board affirms OWCP’s findings with respect to the fact and 

amount of overpayment. 

 15 Id. The 15-day notification need not explain why OWCP found the employee’s reasons for refusal 

unacceptable. Id.

16 20 C.F.R. § 10.517(b). 

17 Id.

18 The propriety of OWCP’s December 22, 2003 suitable work termination is not an issue currently before the 

Board. See 20 C.F.R. § 501.3(e). 

19 Moreover, File No. xxxxxx004 involved appellant’s right knee, not her left. Counsel offered no plausible 

explanation for appellant’s purported entitlement to compensation for a left knee condition ostensibly unrelated to 

her September 9, 1990 injury under File No. xxxxxx004. 

20 20 C.F.R. § 10.517(b). 
6

LEGAL PRECEDENT -- ISSUE 2 

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

made was not at fault in either accepting or creating the overpayment.21 Each recipient of 

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

she receives from OWCP are proper.22 The recipient must show good faith and exercise a high 

degree of care in regard to receipt of their benefits.23 A recipient will be found to be at fault with 

respect to creating an overpayment if she “[a]ccepted a payment which [she] knew or should 

have known to be incorrect.”24

A benefits recipient may be found without fault where the overpayment resulted from an 

individual’s action or inaction based on misinformation supplied by either OWCP or the 

employing establishment.25

An individual who is without fault in creating or accepting an overpayment is nonetheless 

subject to recovery of the overpayment unless adjustment or recovery would defeat the purpose 

of FECA or would be against equity and good conscience.26 Recovery of an overpayment will 

defeat the purpose of FECA if such recovery would cause hardship to a current or former 

beneficiary because the beneficiary from whom OWCP seeks recovery needs substantially all of 

his current income, including compensation benefits, to meet current ordinary and necessary 

living expenses, and the beneficiary’s assets do not exceed a specified amount as determined by 

OWCP.27 Additionally, recovery of an overpayment is considered to be against equity and good 

conscience when an individual who received an overpayment would experience severe financial 

hardship in attempting to repay the debt or when an individual, in reliance on such payment or on 

notice that such payments would be made, relinquished a valuable right or changed his position 

for the worse.28 

The individual who received the overpayment is responsible for providing information 

about income, expenses, and assets as specified by OWCP.29 This information is necessary for 

 21 Id. at § 10.433(a). 

22 Id.

23 Id.

24 20 C.F.R. § 10.433(a)(3). 

25 In such cases, there must be documentation to show that misinformation was communicated. Furthermore, 

there cannot be any evidence that the individual knew or should have known the proper course of action to be 

followed. Federal (FECA) Procedure Manual, Part 6 - Debt Management, Initial Overpayment Actions, Chapter 

6.200.5b(2) (June 2009). 

26 5 U.S.C. § 8129(b); 20 C.F.R. §§ 10.433, 10.434, 10.436, 10.437. 

27 20 C.F.R. § 10.436(a), (b). For an individual with no eligible dependents the asset base is $4,800.00. The base 

increases to $8,000.00 for an individual with a spouse or one dependent, plus $960.00 for each additional dependent. 

Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 

6.200.6a(1)(b) (June 2009). 

28 20 C.F.R. § 10.437(a), (b). 

29 Id. at § 10.438(a). 
7

determining whether a waiver of recovery of the overpayment is warranted.30 The information is 

also used to determine an appropriate repayment schedule, if necessary.31 Failure to submit the 

requested information within 30 days of the request shall result in denial of waiver.32

ANALYSIS -- ISSUE 2 

Both the claims examiner and the hearing representative found appellant at fault because 

she accepted payments which she knew or should have known to be incorrect. Whether an 

individual is at fault in creating an overpayment depends on the circumstance of the 

overpayment.33 The degree of care expected may vary with the complexity of those 

circumstances and the individual’s capacity to realize that she is being overpaid.34 In 

determining fault OWCP applies a “reasonable person” standard.35

Although the December 22, 2003 decision clearly advised appellant that she was no 

longer entitled to receive compensation due to her refusal to accept suitable employment, OWCP 

subsequently misinformed appellant that she was “eligible to receive compensation for [her] left 

total knee replacement only.” OWCP’s claims examiner who misinformed appellant on 

September 14, 2005 is the same claims examiner who initially found appellant at fault for 

essentially following her advice to file a Form CA-7. As noted, a benefits recipient may be 

found without fault where the overpayment resulted from an individual’s action or inaction based 

on misinformation supplied by either OWCP or the employing establishment.36

By decision dated September 18, 2003, OWCP terminated medical benefits with respect 

to appellant’s July 26, 1993 left knee injury. At the time, there was a pending request for 

authorization for left knee arthroplasty, which it denied. However, in April 2005, OWCP 

reversed course and authorized a total knee arthroplasty under File No. xxxxxx004. After 

undergoing left knee surgery on June 17, 2005, appellant submitted an election of benefits form 

to OWCP requesting a transfer to FECA rolls effective June 17, 2005. She also noted that 

OWCP had authorized a total knee replacement. 

The September 14, 2005 correspondence from OWCP appears to have been in response 

to the election of benefits form appellant filed. As indicated, OWCP informed appellant that she 

was “eligible to receive compensation for [her] left total knee replacement only.” The claims 

examiner advised appellant that she needed to submit a Form CA-7 in order to receive 

compensation. The claims examiner further explained that OWCP could not pay benefits until it 

received confirmation from OPM that appellant’s retirement benefits had been suspended. 

 30 Id.

31 Id.

32 Id. at § 10.438(b).

33 Id. at § 10.433(b). 

34 Id.; J.S., 58 ECAB 515, 521-22 (2007). 

35 L.D., 59 ECAB 673, 679 (2008). 

36 Federal (FECA) Procedure Manual, supra note 25. 
8

Appellant subsequently filed the Form CA-7 as instructed, and OPM confirmed that her benefits 

were suspended effective September 1, 2005. On November 22, 2005 OWCP advised her of her 

entitlement to wage-loss compensation retroactive to June 17, 2005. Appellant received a lumpsum payment of $12,628.33, and OWCP placed her on the periodic compensation rolls, effective 

October 30, 2005. 

The Board finds that the $141,365.35 overpayment of compensation appellant received 

was the result of misinformation provided by OWCP. Appellant is precluded from receiving 

additional compensation based on the December 22, 2003 decision. However, OWCP’s 

April 2005 authorization of a total knee arthroplasty and the misinformation it provided her on 

September 14, 2005 regarding her eligibility for compensation ostensibly nullified the 

December 22, 2003 suitable work termination. One cannot reasonably conclude under these 

circumstances that appellant knew or should have known that the 5 U.S.C. § 8106(c)(2) sanction 

remained in effect at the time she began receiving wage-loss compensation on 

November 22, 2005.37 Accordingly, OWCP’s finding that appellant was at fault in creating the 

overpayment shall be reversed. The case will be remanded to OWCP for consideration of waiver 

of recovery of the overpayment and for a determination of whether recovery of the overpayment 

would defeat the purpose of FECA or would be against equity and good conscience. 

Additionally, OWCP shall provide appellant the opportunity to submit an updated Form OWCP20 with information regarding her current income, expenses, assets, and liabilities.38 After 

appropriate development, OWCP shall issue a de novo decision. 

CONCLUSION 

Appellant received an overpayment of compensation in the amount of $141,365.35 for 

the period June 17, 2005 through August 2, 2008. However, OWCP incorrectly found her at 

fault in creating the overpayment. 

 37 Even after suspending compensation in August 2008, OWCP questioned whether its decision was proper. 

38 The Board notes that for the period appellant was improperly paid FECA benefits, June 17, 2005 through 

August 2, 2008, she had voluntarily foregone receipt of OPM retirement benefits so as to avoid the receipt of a 

prohibited dual benefit. See supra note 28. 
9

ORDER 

IT IS HEREBY ORDERED THAT the January 29, 2015 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and reversed in part, and the case is 

remanded for further action consistent with this decision. 

Issued: September 26, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees' Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees' Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees' Compensation Appeals Board