Kellerman v. United States, 128-73.

• Decision Date: 23 October 1974
• Docket Number: No. 128-73.,128-73.
• Citation: 504 F.2d 1128
• Parties: Karl F. KELLERMAN v. The UNITED STATES.
• Court: U.S. Claims Court

504 F.2d 1128

Karl F. KELLERMAN v. The UNITED STATES.

No. 128-73.

United States Court of Claims.

October 23, 1974.

John I. Heise, Jr., Silver Spring, Md., attorney of record, for plaintiff.

Peter A. T. Sartin, Washington, D. C., with whom was Asst. Atty. Gen. Carla A. Hills, for defendant; Karen A. Berndt, Washington, D. C., of counsel.

Before COWEN, Chief Judge, and SKELTON and KUNZIG, Judges.

ON DEFENDANT'S MOTION AND PLAINTIFF'S CROSS MOTION FOR SUMMARY JUDGMENT

KUNZIG, Judge:

We face in this suit for back pay and ancillary relief the question of whether the Air Force Systems Command (Systems Command) properly exercised its discretion in refusing to adjust plaintiff's salary to take advantage of the lifting of a Congressional wage ceiling. We conclude that defendant either had no discretion to act as it did or, alternatively, abused the discretion it exercised. Consequently, we hold for plaintiff.

The material facts are not disputed. Plaintiff, a career Civil Service employee and a preference eligible, was approved on January 10, 1965 as a Public Law 80-313 (P.L. 313) employee in Systems Command. P.L. 313, codified in 10 U.S.C. § 1581 (1970), authorizes the Secretary of Defense to establish up to 530 specialized civilian positions to carry out research and development relating to the national defense. Within the Air Force, this law was put into effect as the Air Force Executive Assignment Program.

The positions thus created are in the classified Civil Service, but are not included in the General Schedule (GS) for grade and salary purposes. P.L. 313 authorizes the Secretary of Defense, with the approval of the Civil Service Commission (CSC), to fix the rates of compensation for positions in the program, provided that he keep within the General Schedule pay ranges between GS-16, step 1 and GS-18, step 10. 10 U.S.C. § 1581(b) (1970).

Applying this statute, Air Force Manual (AFM) 40-2, § 4-6b provides:

Initial PL 313 position salaries are established within the salary range of the first step of GS-17 and the maximum salary rate of GS-18. Salaries are established to coincide with one of the General Schedule step rates for these grade levels and in consideration of:

(1) The value of the position to the organization.

(2) The salary alignment with comparable PL 313 positions.

(3) The recognized standing of the candidate in his scientific and professional field. (emphasis added)

AFM 40-2, § 4-6c(1) goes on to direct that, as a general rule, Air Force commands are to review P.L. 313 salaries at least once a year to recommend pay increases, based on contribution of the position to its organization.

In conformity with these statutory and regulatory guides, the analysis substantiating plaintiff's appointment at GS-18 read in part:

The level of difficulty, the high degree of originality and ingenuity necessary to properly perform the duties and the overall importance of this position in the policymaking structure of the Command, along with the responsibilities for planning and directing of a specialized scientific and technical program of national significance allocates this position at the GS-18 level.

Accordingly, plaintiff's grade level was established at the GS-18, step 1 level, with a salary of $27,055.

In July 1968, Congress increased the wage rate for GS-18 employees across the board to $30,239. Due to a limitation in the Federal Salary Act of 1967, however, no GS employee could be paid more than $28,000, and P.L. 313 employees were frozen at that limit. On July 14, 1968, pursuant to a regular agency wage review, the salaries of P.L. 313 employees in Systems Command slotted at the GS-18 level, including plaintiff, were raised to the $28,000 ceiling.

In January 1969, a decision was taken in Systems Command to abolish plaintiff's position because the need for the position no longer existed. Approximately one month later, Congress lifted the ceiling on executive GS levels. The salaries of all P.L. 313 employees, save plaintiff, were accordingly adjusted to the authorized GS-18 level previously blocked by the 1967 ceiling. As a result of the adjustment, the salaries of P.L. 313 executives at the GS-18, step 1 level were raised to $30,239, while those at the GS-17, step 3 level rose to $28,014. In explaining to Air Force Headquarters why plaintiff's salary alone was being retained at the former ceiling, the Director of Systems Command Civilian Personnel wrote:

In view of the pending abolishment of Mr. Kellerman's position, General Ferguson Commander, Systems Command felt his salary should remain at $28,000.

By notice of reduction in force (RIF) dated May 29, 1969, plaintiff was informed he was to be released effective June 30. In lieu of separation, plaintiff was offered a non-P.L. 313 position as general engineer, GS-15, at a salary of $25,711. On June 13, 1969, this offer was amended to one as supervisory general engineer, but with no increase in proffered salary. Because plaintiff's salary was at this point lower than that of any other P.L. 313 employee in Systems Command, he was not offered the chance to displace any such employee slotted at a lower grade. Ten days later, plaintiff was notified that his failure to reject the offered GS-15 position constituted his acceptance.

Plaintiff's administrative appeal of this Air Force action followed a long and complicated procedure through the CSC. Ultimately, on September 1, 1972, the CSC Board of Appeals and Review (BAR) sustained the Air Force, holding plaintiff was properly deprived of a salary increase in February 1969, which would have allowed him to "bump" another P.L. 313 employee at the time of his RIF. The BAR concluded that no statute or Air Force regulation required the Air Force to grant plaintiff a salary increase pursuant to the Congressional lifting of the 1967 salary ceiling. Specifically, the BAR held that AFM 40-2 required P.L. 313 wages to coincide with General Schedule salaries only initially, and that no subsequent adjustment was mandated.

Plaintiff's request for review of this administrative determination is before the court on cross-motions for summary judgment. We conclude that the BAR decision is erroneous as a matter of law and that plaintiff is entitled to judgment.

Plaintiff asserts that the controversy at hand does not involve whether he was entitled to a salary increase in February 1969: that decision had been taken the previous July when Systems Command applied Congress' across-the-board increase in General Schedule wages to all P.L. 313 employees including plaintiff. According to plaintiff, his case turns on whether the Air Force acted arbitrarily and capriciously in denying him the benefit of the salary increase by refusing to let him take advantage of the February 1969 wage ceiling removal. Plaintiff argues the Air Force had no discretion under its own regulations and practices to refuse lifting the ceiling on plaintiff's wages. Indeed, plaintiff suggests the Air Force sought to discriminate against him in not lifting the ceiling on his salary.

Defendant responds that the statutory and regulatory scheme under which plaintiff was employed leaves salary adjustments to the discretion of the employing agency, and that judicial review of plaintiff's plight is consequently inappropriate.

No Discretion

While we find the issue thus joined a close one, we believe plaintiff's argument carries the day. The Air Force regulations cited above, which put P.L. 313 into operation, make clear that both the initial pegging and subsequent review of P.L. 313 wage levels are to be undertaken in the light of the particular position's value to its organization. Defendant argues the Air Force refusal to allow plaintiff the benefit of the 1969 wage ceiling increase was justified by this regulatory authority since the impending RIF of plaintiff's position reflected the position's reduced value to Systems Command.

Without attempting to define comprehensively the scope of the Air Force's discretion regarding salaries of P.L. 313 employees, we conclude that the question of whether to grant plaintiff the benefit of the February 1969 wage ceiling removal was not a matter of departmental discretion. The...