Court Opinion

ID: 819993
Source: CourtListenerOpinion
Date Created: 2013-02-08 17:23:28.13814+00
Date Added: 2024-06-11T09:03:01.743724
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
              __________________________

               SHERI LYNN DENNEY,
                     Petitioner,
                          v.
    OFFICE OF PERSONNEL MANAGEMENT,
                Respondent.
              __________________________

                      2012-3094
              __________________________

   Petition for review of the Merit Systems Protection
Board in no. DC0842100846-I-1.
              ___________________________

              Decided: February 8, 2013
             ___________________________

      RICHARD L. SWICK, Swick & Shapiro, P.C., of Wash-
ington, DC, argued for petitioner.

      HILLARY A. STERN, Senior Trial Counsel, Commer-
cial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for
respondent. With her on the brief were STUART F.
DELERY, Acting Assistant Attorney General, JEANNE E.
DAVIDSON, Director, and TODD M. HUGHES, Deputy Direc-
tor.
               __________________________
DENNEY   v. OPM                                           2

  Before MOORE, SCHALL, and BRYSON, 1 Circuit Judges.
MOORE, Circuit Judge.
    Sheri Lynn Denney appeals from the decision of the
Merit Systems Protection Board (Board) sustaining the
Office of Personnel Management’s (OPM) determination
that “availability pay” should not be included in the
calculation of Ms. Denney’s retirement annuity. Denney
v. OPM, 117 M.S.P.R. 269 (2012). For the reasons set
forth below, we affirm.
                       BACKGROUND
    Ms. Denney served as a criminal investigator or spe-
cial FBI agent from 1983 until her retirement in 2008.
From 1983 until early 2001, Ms. Denney was eligible for
and received “availability pay” under 5 U.S.C. § 5545a.
Availability pay is a form of premium pay equal to “25
percent of the rate of basic pay for the position.” 5 U.S.C.
§ 5545a(b), (h)(1). To be eligible for availability pay, a
criminal investigator must work at least forty hours per
week (full-time) and actually work or be available to work
an additional two hours per regular workday. 5 U.S.C. §
5545a(d). Further, both the investigator and her supervi-
sor must annually certify that “the investigator has met,
and is expected to meet,” these additional work require-
ments. Id. § 5545(e)(1). Beginning February 25, 2001,
Ms. Denney began working part-time and was no longer
eligible for, and no longer received, availability pay.
Although Ms. Denney worked full-time from May 20, 2001
to August 26, 2001, she was not eligible for and did not
receive availability pay at any time after February 25,
2001. Ms. Denney retired on December 31, 2008.

   1    Judge Bryson assumed senior status on January
7, 2013.
3                                             DENNEY   v. OPM

    The basic method for calculating an annuity for an
employee with some full-time service and some part-time
service like Ms. Denney is a two-step process:
    In computing an annuity under this subchapter
    for an employee whose service includes service
    performed on a part-time basis--
    (A) the average pay of the employee, to the extent
    that it includes pay for service performed in any
    position on a part-time basis, shall be determined
    by using the annual rate of basic pay that would
    be payable for full-time service in the position;
    and
    (B) the benefit so computed shall then be multi-
    plied by a fraction equal to the ratio which the
    employee’s actual service, as determined by pro-
    rating the employee’s total service to reflect the
    service that was performed on a part-time basis,
    bears to the total service that would be creditable
    for the employee if all of the service had been per-
    formed on a full-time basis.
5 U.S.C. § 8415(f)(1) (2006) 2. The first step (subpart A) is
to calculate “average pay”—using the “annual rate of
basic pay that would be payable for full-time service in
the position”—of the employee for any period of three
consecutive years of service that produces the highest
average (“high three” years). Id. §§ 8415(f)(1), 8331(4).
“Basic pay” in the context of a retirement annuity calcula-
tion includes various forms of additional pay that certain
employees may receive. See generally § 8331(3). These
forms of additional pay are over and above the base pay
for the position and include overtime pay, special expense
allowances, physicians comparability allowances, premi-

    2   Section 8415 was amended in 2009; the relevant
provision is now § 8415(g)(1).
DENNEY   v. OPM                                           4

um pay, hazard pay, and “availability pay . . . received by
a criminal investigator under section 5545a of this title.”
Id. §§ 8331(3), 8331(3)(E)(i). The second step of the
annuity calculation (subpart B) is to prorate the calculat-
ed average pay in accordance with the employee’s ratio of
full-time to part-time service. Id. § 8415(f)(1)(B).
     In this case, OPM determined that Ms. Denney’s last
three years of service, 2006-2008, were her “high three”
years because those were the three consecutive years of
creditable service during which she earned the most using
annualized full-time basic pay rates. In calculating
average pay over the high three years, OPM did not
include availability pay because Ms. Denney was not
eligible for and did not receive availability pay during
that period of time. For the second step, OPM calculated
the ratio of Ms. Denney’s time spent in full-time service to
time spent in part-time service at 85%. Ms. Denney does
not challenge OPM’s “high three” determination or its
full-time to part-time ratio calculation.
    Ms. Denney appealed OPM’s average pay calculation
and the administrative judge reversed, concluding that
OPM erred by not including availability pay during Ms.
Denney’s high three years of service. OPM appealed to
the Board, which sustained OPM’s annuity calculation.
Ms. Denney’s appeal to this court presents a single ques-
tion: whether or not her “average pay” calculation should
include availability pay. We have jurisdiction under 28
U.S.C. § 1295(a)(9).
                       DISCUSSION
    We affirm Board decisions unless they were “(1) arbi-
trary, 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). We review the Board’s statutory interpretation
5                                           DENNEY   v. OPM

de novo. Wallace v. OPM, 283 F.3d 1360, 1361 (Fed. Cir.
2002).
                            A.
    Ms. Denney argues that every full-time special agent
is required to work ten-hour days and is automatically
entitled to availability pay under 5 U.S.C. § 5545a. Ms.
Denney argues that because the average pay calculation
under § 8415(f)(1)(A) is based on full-time service, her
average pay calculation should have included availability
pay because she would have been entitled to it during her
high three years of service had she worked full-time.
     We disagree. Ms. Denney’s argument hinges on the
notion that availability pay is automatically part of basic
pay. The relevant statutory language as well as the facts
of this case, however, demonstrate that the forms of
additional pay enumerated in § 8331(3), including availa-
bility pay, are not “automatically” part of basic pay for
retirement annuity purposes. Rather, the plain meaning
of the relevant statutes demonstrates that the forms of
additional pay enumerated in § 8331(3) are part of basic
pay for retirement annuity purposes only when an em-
ployee was eligible for and received such additional pay
during the employee’s high three years of service.
    Section 8415(f) defines the two-step annuity calcula-
tion process for “an employee whose service includes
service performed on a part-time basis.” It provides that
“average pay . . . shall be determined by using the annual
rate of basic pay that would be payable for full-time
service in the position.” 5 U.S.C. § 8415(f)(1)(A). It does
not follow that availability pay, or any other form of
additional pay defined in § 8331(3), should be included in
the calculation of average pay in cases in which the
employee was not eligible for and did not receive such pay
during the pertinent period of time.
DENNEY   v. OPM                                             6

    It is clear that § 8415(f)’s reference to “annual rate of
basic pay” does not automatically include the various
forms of additional pay enumerated in § 8331(3) because
those forms of additional pay relate to different employ-
ment positions and conditions. It is also clear that the
forms of additional pay enumerated in § 8331(3) do not
naturally flow from the respective employment position
alone because they also include eligibility requirements.
     For example, § 8813(3)(D) includes, as part of basic
pay, “with respect to a law enforcement officer, premium
pay under section 5545(c)(2) of this title.”        Section
5545(c)(2) provides premium pay of 10-25% above the
“rate of basic pay for the position” on an annual basis for
an employee whose position “requires substantial
amounts of irregular, unscheduled overtime duty.” Quite
clearly, this premium pay does not naturally flow from
the law enforcement position by itself but rather is avail-
able in addition to the “rate of basic pay for the position”
only to those law enforcement officers who work substan-
tial amounts of irregular, unscheduled overtime. Similar-
ly, § 8331(3)(G) discusses additional pay for customs
officers. The referenced eligibility statute (the Act of
February 13, 1911, as amended and codified at 19 U.S.C.
§ 267) provides overtime compensation for certain cus-
toms officers:
    Subject to [certain limitations], a customs officer
    who is officially assigned to perform work in ex-
    cess of 40 hours in the administrative workweek
    of the officer or in excess of 8 hours a day shall be
    compensated for that work at an hourly rate of
    pay that is equal to 2 times the hourly rate of the
    basic pay of the officer.
19 U.S.C. § 267(a)(1). This form of additional pay likewise
does not naturally flow from the position of customs
officer but instead is available to customs officers only for
7                                              DENNEY   v. OPM

the overtime hours they are actually required to work.
These examples illustrate that the additional pay items
enumerated in § 8331(3) are over and above §
8514(f)(1)(A)’s “annual rate of basic rate . . . for full-time
service in the position” and are considered retirement
annuity “basic pay” for employees who were eligible for
and received the additional pay. Such additional pay is
not, however, automatic because it does not naturally flow
from an employment position alone.
     The form of additional pay at issue in this case, avail-
ability pay, is addressed in § 8331(3)(E)(i). That section
states that availability pay “received by a criminal inves-
tigator under section 5545a” is considered basic pay for
retirement annuity purposes. The “received by” language
in this particular section expressly confirms that availa-
bility pay, like the forms of additional pay previously
discussed, is not automatic. Rather, for availability pay to
be included in Ms. Denney’s retirement annuity calcula-
tion, she must have “received” it. This is entirely logical
given that, to be eligible for such pay, Ms. Denney had to
meet the requirements of § 5545a, which specifies (1)
working a full-time forty-hour week, (2) working or being
available to work unscheduled duty for an average of two
additional duty hours per workday, and (3) certifying and
obtaining a supervisor’s certification of such availability.
    For a large part of her service, Ms. Denney met the
requirements of § 5545a and, therefore, was eligible for
and received availability pay. However, for the three-
consecutive-year period of employment during which Ms.
Denney’s annual pay was the highest, 2006-2008, she was
not eligible for and did not receive availability pay.
During this period of time, Ms. Denney was not required
to work a forty-hour week and was not required to certify
and obtain supervisory certification of her availability to
work an additional two hours per day of unscheduled
service. Because availability pay was not “received by
DENNEY   v. OPM                                           8

[Ms. Denney] under section 5545a” during these “high
three” years, OPM appropriately excluded availability pay
from her annuity calculation.
    Additional facts present in this case confirm that
availability pay for Ms. Denney was not automatic. For
approximately three months in 2001, Ms. Denney re-
turned to a full-time work schedule but was not eligible
for and did not receive availability pay. This fact demon-
strates that availability pay was not automatically part of
Ms. Denney’s basic pay. This conclusion is entirely con-
sistent with our prior opinions that have addressed avail-
ability pay in different employment contexts. See Caven
v. Merit Sys. Prot. Bd., 392 F.3d 1378, 1381 (Fed. Cir.
2004) (“[A]vailability pay . . . is not automatic, however,
but requires compliance with section 5545a, which in-
cludes certification by both the law enforcement officer
and his superior that the officer has met the statutory
requirements.”); Martinez v. Merit Sys. Prot. Bd., 126 F.3d
1480, 1482 (Fed. Cir. 1997) (“Since availability pay is
premium pay, it is not part of the ‘rate of basic pay’ for a
criminal investigator.”).
    It is unfortunate that Ms. Denney’s high three years
of service occurred when she was not eligible for and did
not receive availability pay. But the language of the
relevant statutory provisions and facts of this case per-
suade us that availability pay is not automatic and should
not be included in the calculation of retirement annuity
“average pay” when the employee was not eligible for and
did not receive availability pay during her high three
years of service.
                            B.
    Ms. Denney contends that excluding availability pay
from her annuity calculation is inequitable because it
penalizes her for working part-time during her high three
years of service. Ms. Denney argues that she “is not
9                                           DENNEY   v. OPM

asking for ‘bonus’ or ‘overtime’ pay to be added; she is
asking that the regulations requiring the addition of
premium pay be followed to achieve equal pay for equal
service.” Pet’r Br. 12.
    We find Ms. Denney’s argument lacks merit. She is
not being penalized for working part-time during her high
three years of service. In determining Ms. Denney’s high
three years, OPM included availability pay during the
period of time that Ms. Denney received it. Oral Arg. at
7:20-11:13,        26:55-30:28,         available        at
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
12-3094.mp3; see App’x to Resp’t Br. 4. OPM found,
however, that Ms. Denney’s “high three” years occurred
during a period of time when she was not eligible for and
did not receive availability pay. In other words, Ms.
Denney’s full-time pay during her high three years, 2006-
2008, was greater without availability pay than any of her
previous years of service with availability pay. Therefore,
including availability pay during her high three years,
when she was not required to meet the eligibility re-
quirements for receiving availability pay, would result in
an anomaly because Ms. Denney’s rate of “average pay”
for annuity purposes would be based on an adjusted
salary level greater than she received at any point during
her employment. The statutory language does not sup-
port calculating her average salary during her “high
three” years based on pay for which she was not eligible
and which she did not receive. That result would not
achieve “equal pay for equal service” as Ms. Denney
contends, and there is no evidence that Congress intended
that result.
                       CONCLUSION
    We have considered all of Ms. Denney’s remaining ar-
guments and find them to be without merit. For the
reasons set forth above, the decision of the Board is
DENNEY   v. OPM               10

                  AFFIRMED.
                    COSTS
   No costs.