Gallo v. Dep't of Transp., 2011–3094.

CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit
Citation689 F.3d 1294
Docket NumberNo. 2011–3094.,2011–3094.
PartiesJane L. GALLO, Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent.
Decision Date01 August 2012


William L. Bransford, Shaw, Bransford & Roth, PC, of Washington, DC, argued for petitioner. With him on the brief was Maria N. Coleman.

David D'Alessandris, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Harold D. Lester, Jr., Assistant Director. Of counsel on the brief was Theresa D. Dunn, Office of the Regional Counsel, Federal Aviation Administration, of Fort Worth, TX.

Before BRYSON, CLEVENGER, and LINN, Circuit Judges.

LINN, Circuit Judge.

Appellant Jane L. Gallo (Gallo) appeals the final decision of the Merit Systems Protection Board (“Board”) denying her restoration rights under 5 U.S.C. § 8151(a). See Gallo v. Dep't of Transp., 116 M.S.P.R. 1 (2011) (“Board Decision ”). Because the Board erred in interpreting “resumes employment with the Federal Government” under § 8151(a), and because any pay increases that Gallo would have received based on her creditable service time with the federal government are “benefits based on length of service” under 5 U.S.C. § 8151(a), this court reverses the decision of the Board and remands for further proceedings consistent with this opinion.

I. Background

In 1982, Gallo began her career at the Department of Transportation (Department) Federal Aviation Administration (“FAA” or “Agency”) as an air traffic control specialist (“ATCS”). She served as an operational ATCS through January 1995 when she experienced a compensable job-related injury for which she received Office of Workers' Compensation Program (“OWCP”) benefits under the Federal Employee's Compensation Act (“FECA” or the Act). In March 1995, Gallo had sufficiently recovered to return to her ATCS position on light duty status. In January 1996, however, Gallo lost her medical certification that was required for her to continue as an operational ATCS. Despite her injury, Gallo then applied for and was assigned to a full-time “non-operational” position as an automation specialist, a position in the same grade and step with the General Schedule (“GS”) (GS–14, Step 7), but which did not provide the same retirement service credit or night and weekend pay as the operational ATCS position. Gallo worked for the government as an automation specialist from April 14, 1996, through June 18, 2000, the entire time during which she received OWCP benefits under FECA to account for the pay differential in her reassigned position. During Gallo's reassignment to the automation specialist position, the Agency converted its operational ATCS employees to a new “AT” pay plan as a result of negotiations between the Agency and the union representing operational ATCS employees. The conversion did not apply to the automation specialist position.

Gallo fully recovered from her 1995 injury in 2000. Prior to her recovery, on December 27, 1999, Gallo applied for a supervisory ATCS position. The selecting official selected Gallo on March 1, 2000, to be effective August 13, 2000. In April 2000, Gallo received medical clearance for reinstatement as an operational ATCS, and the Agency terminated her OWCP benefits on June 18, 2000. Immediately thereafter, on June 22, 2000, Gallo applied for restoration under 5 U.S.C. § 8151(b)(2), which provides the right to priority consideration for restoration to the “former or equivalent position” for Federal employees who have overcome a compensable injury “within a period of more than one year after the date of commencement of compensation.” On August 13, 2000, the Agency assigned Gallo to the supervisory ATCS position for which she had previously been selected. In setting her salary, the Agency did not take into account pay increases that had been granted exclusively to operational ATCS employees during the period when Gallo was working as an automation specialist. Gallo v. United States, 76 Fed.Cl. 593, 595 (2007). “These pay increases came about as a result of the 1998 [ATCS] pay reform.” Id. “The FAA, likewise, did not credit [ ] Gallo for the time she has spent in her automation specialist job when it calculated her seniority in the new position.” Id. at 595–96 (emphasis added); accord Appellee Br. 10.

On September 8, 2000, Gallo filed an appeal to the Board asserting that the Agency violated 5 U.S.C. § 8151(a) by failing to adjust her salary to provide pay benefits that the Agency granted to operational ATCS employees while she served as an automation specialist. The administrative judge (“AJ”) dismissed her appeal for lack of jurisdiction based on the conclusion that the Office of Personnel Management (OPM) regulations do not afford employees, whose full recovery from a compensable injury takes longer than one year, the right to appeal an alleged ‘improper restoration’ to the Board.” Gallo v. Dep't of Transp., No. AT–0353–00–0909–I–1, slip op. at 5 (M.S.P.B. Jan. 3, 2001). Gallo did not appeal this decision or seek reconsideration at that time, but rather: (1) in September 2005, filed a discrimination complaint with the Department of Transportation, which was ultimately dismissed; and (2) in August 2006, filed a complaint in the U.S. Court of Federal Claims (“Claims Court) for improper restoration under § 8151(a). The Claims Court dismissed Gallo's claim for lack of jurisdiction on the grounds that, inter alia, the Board has exclusive jurisdiction over actions arising under § 8151(a). Gallo, 76 Fed.Cl. at 610. On appeal, this court affirmed, and encouraged the Board to reopen Gallo's earlier appeal in light of that holding. Gallo v. United States, 529 F.3d 1345, 1352 (Fed.Cir.2008)( Gallo I ) (“Given our decision ... that the Board's limited view of its jurisdiction over claims under section 8151(a) is incorrect, we assume that the Board would look favorably on a motion to reopen.”).

Accordingly, on February 20, 2009, the Board granted Gallo's motion to reopen her previous appeal. On reconsideration, the Board nevertheless dismissed Gallo's appeal for failure to state a claim because it held that, based on Gallo's continued employment with the federal government, Gallo did not resume employment with the Federal Government” as required for rights and benefits under § 8151(a). Board Decision at 6 (emphasis added). In the alternative, the Board held that “even if [Gallo] had resumed employment with the Federal Government, she would not be entitled to the relief she seeks” because “the benefits she seeks are not based upon length of service.” Id. Gallo appeals, and this court has jurisdiction pursuant to 5 U.S.C. § 7703(b)(1) and 28 U.S.C. § 1295(a)(9).

II. Discussion
A. “resumes employment with the Federal Government”

Gallo argues that the Board erred by construing “resumes employment with the Federal Government” in 5 U.S.C. § 8151(a) to require the employee to physically leave the federal government upon a compensable injury. This court reviews the Board's statutory interpretations de novo. Jones v. Dep't of Transp., 295 F.3d 1298, 1304 (Fed.Cir.2002).

Section 8151(a) provides that:

In the event the individual resumes employment with the Federal Government, the entire time during which the employee was receiving compensation under this chapter shall be credited to the employee for the purposes of within-grade step increases, retention purposes, and other rights and benefits based upon length of service.

5 U.S.C. § 8151(a) (emphases added). Section 8151(b), relevant to the interpretation of subsection (a), provides:

Under regulations issued by the [OPM]

(1) [Full recovery within 1 year:] the department or agency which was the last employer shall immediately and unconditionally accord the employee, if the injury or disability has been overcome within one year after the date of commencement of compensation ..., the right to resume his former or an equivalent position, as well as all other attendant rights which the employee would have had, or acquired, in his former position had he not been injured or disabled, including the rights to tenure, promotion, and safeguards in reductions-in-force procedures, and

(2) [Full recovery after 1 year:] the department or agency which was the last employer shall, if the injury or disability is overcome within a period of more than one year after the date of commencement of compensation, make all reasonable efforts to place, and accord priority to placing, the employee in his former or equivalent position within such department or agency, or within any other department or agency.

5 U.S.C. § 8151(b) (emphases added).

Gallo argues that § 8151(a) provides restoration rights to federal employees, such as herself, who resume employment in their former positions, or in positions equivalent thereto, after recovering from a compensable injury, regardless of whether the employee remains otherwise employed by the federal government while receiving OWCP benefits under FECA. Gallo cites FECA's legislative history as evidence that Congress intended that “Federal employees ... who are injured on the job and receiving disability compensation ... will incur no loss of benefits which they would have received absent the injury or disease. Appellant's Br. 17 (quoting S.Rep. No. 93–1081, reprinted in 1974 U.S.C.C.A.N. 5341, 5344) (emphasis added). According to Gallo, the Board was required to interpret FECA liberally to “to effectuate its humanitarian purposes, with exemptions and exceptions narrowly construed and doubts resolved in favor of the employee.” Id. (quoting Brown v. Jefferson, 451 A.2d 74, 77 (D.C.1982)). Gallo argues that, instead of resolving doubts in her favor, the Board “recognize[d] the apparent unfairness in the fact that an employee who remains off duty while injured potentially has greater...

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