In re Federal Reserve Board, B-195418

• Decision Date: 30 July 1979
• Docket Number: B-195418
• Citation: 58 Comp.Gen. 687
• Parties: IN THE MATTER OF FEDERAL RESERVE BOARD - APPLICABILITY OF SENIOR EXECUTIVE SERVICE.
• Court: Comptroller General of the United States

58 Comp.Gen. 687

IN THE MATTER OF FEDERAL RESERVE BOARD - APPLICABILITY OF SENIOR EXECUTIVE SERVICE.

No. B-195418

Comptroller General of the United States

July 30, 1979

Federal reserve - board of governors - employees - civil service reform act of 1978 - applicability federal reserve act, as amended, expressly excepts the appointment and compensation of all employees of the board of governors, federal reserve system, from the provisions of the civil service laws and regulations. The act must be given priority over a subsequently enacted statute applicable to federal agencies generally, absent a clear indication that the congress intended otherwise. Hence, the provisions of civil service reform act of 1978 establishing a senior executive service do not apply to the employees of the board.

By letter dated July 10, 1979, the general counsel of the office of personnel management (OPM) has requested our opinion whether the employees of the board of governors of the federal reserve system are subject to the provisions of title IV of the civil service reform act of 1978, public law no 95-454, October 13, 1978, 92 Stat. 1111, 5 U.S.C. 3131 et seq., establishing a government-wide senior executive service (SES), designed to insure the high quality of government executives.

Is the position of OPM that the employees of the board of governors of the federal reserve system ("federal reserve board") are subject to the provisions of title IV of the civil service reform act governing the senior executive service. OPM has found that the board falls under the SES criteria contained in 5 U.S.C. 3132(a), and thus is included under SES, unless excluded by the president pursuant to 5 U.S.C. 3132(c). OPM points to executive order no. 9004, dated December 30, 1941, which placed all positions under the board of governors in schedule a, positions excepted from examination, which thereby excluded all board employees from the competitive service. OPM argues that but for this executive order, the board's employees would have been swept into the competitive service by executive order no 8743, dated April 23, 1941. Executive order no. 8743 provided that all offices and positions in the executive civil service are covered into the classified civil service, unless excepted under schedule a of the civil service rules (and other exceptions not applicable).

Opm believes that the provisions in section 11(l) of the federal reserve act of 1913, 12 U.S.C. 248(l), which states that "nothing herein shall prevent the president from placing said employees in the classified service, " made the board's independent status conditional and provided the statutory authority for a subsequent change in that status. As stated in a letter of June 15, 1979, to the board opm's position is as follows:

Under the condition, the board positions could have been brought into the competitive service well before the reach of the ramspeck act (54 Stat. 1211, November 26, 1940) and executive order no. 8743, had the president elected to do So. The terms of the executive order no. 8743 superseding the board's independent authority to place board employees in the competitive service left the president no choice but the need to exercise his presidential authority under the federal reserve act's conditional provision if he wanted to avoid the competitive service reach of executive order no. 8743.

Opm concludes that the placement of the board employees in schedule a unequivocally placed them in the civil service and "owing to the excepted service schedule a status of the board's employees, their positions would qualify as SES positions under the definition in 5 U.S.C. 3132(a)."

The board of governors disagrees with the conclusions reached by opm. Concluding that its employees are not subject to the senior executive service, the board relies on section 11(l) of the federal reserve act of 1913, and section 6(b) of the banking act of 1933, 12 U.S.C. 244, both of which are set out below.

Section 11(l) of the federal reserve act of 1913, 38 Stat. 251, 262 as enacted authorized the board:

(1) to employ such attorneys, experts, assistants, clerks, or other employees as May be deemed necessary to conduct the business of the board. All salaries and fees shall be fixed in advance by said board and shall be paid in the same manner as the salaries of the members of said board. All such attorneys, experts, assistants, clerks, and other employees shall be appointed without regard to the provisions of the act of January sixteenth, eighteen hundred and eighty- three (volume twenty- two, United States statutes at large, page four hundred and three), and amendments thereto, or any rule or regulation made in pursuance thereof: provided, that nothing herein shall prevent the president from placing said employee in the classified service. (italic supplied.)

In 1933, congress moved to strengthen the independence of the federal reserve board. Section 6(b) of the banking act of 1933, 48 Stat. 162, 167, amended section 10 of the federal reserve act, 12 U.S.C. 244, to read in pertinent part as follows:

* * * the board shall determine and prescribe the manner in which its obligations shall be incurred and its disbursements and expenses allowed and paid, and May leave on deposit in the federal reserve banks the proceeds of assessments levied upon them to defray its estimated expenses and the salaries of its members and employees, whose employment, compensation, leave, and expenses shall be governed solely by the provisions of this act, specific amendments thereof, and rules and regulations of the board not inconsistent therewith; and funds derived from such assessments shall not be construed to be government funds or appropriated moneys * * *.

The board points out that these provisions expressly empowered the board to appoint employees without regard to the provisions of the civil service act of 1883 (5 U.S.C. 1101) "and amendments thereto or any rule or regulation made pursuant thereof." Further, section 6(b) states that the "employment, compensation, leave, and other expenses" of employees of the board "shall be governed solely by the provisions"of the federal reserve act, or "specific amendments thereof, and rules and regulations of the board not inconsistent therewith." The board's letter of March 12, 1979, to OPM states:

The purpose of this amendment to the act was to reinforce the importance of the board's independence within the government and in particular to insure that the board is able to exercise control over its own internal management policies. H. Rep. No. 150, 73d cong., 1st Sess. (2) (1933) * * *. Furthermore, it is the board's view that, under generally accepted rules of statutory construction, civil service legislation enacted after the federal reserve act and applying to all federal employees in general does not repeal by implication the express language of that act, which confers on the board the sole authority to manage its own employees * * *. It should be noted that congress has never acted to revoke those provisions of the federal reserve act that established the board's independent status, nor has any such revocation been contained in any legislation dealing with the federal civil service in general.

We are of the opinion that the board of governors of the federal reserve system is not subject to title IV, senior executive service, of the civil service reform act for the following reasons.

The provisions of the federal reserve act of 1913, 12 U.S.C. 226 as amended by the banking act of 1933, show a clear intent to give the board independence in regard to its own personnel system. This intent is also reflected in the events that occurred in 1940 and 1941 following the passage of the ramspeck act of November 26, 1940, 5 U.S.C. 5102. The understandings between the president, the federal reserve board, and the civil service...