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AFGE v. CAMPBELL

UNITED STATES DISTRICT COURT, DISTRICT OF COLUMBIA


July 26, 1979

American Federation of Government Employees, AFL-CIO, et al., Plaintiffs,
v.
Alan K. Campbell et al., Defendants.

The opinion of the court was delivered by: GREEN

MEMORANDUM OPINION

Introduction

 This matter is before the Court on cross-motions for summary judgment. Upon consideration of these motions, memoranda in support thereof and the entire record, the Court concludes that there are no genuine issues of material fact and that both motions should be denied in part and granted in part.

 This action involves the consolidation of two cases concerning identical issues which were filed by two institutional plaintiffs, the American Federation of Government Employees, AFL-CIO (AFGE) and the Metal Trades Department, AFL-CIO (MTD) on behalf of their members and members of the class of employees similarly affected. After AFGE was certified as representative of the class by order of this Court dated March 27, 1979, the two actions were consolidated.

 Facts

 During July and August 1978, wage surveys in accordance with 5 U.S.C. § 5343 were conducted in the wage areas of Dothan, Alabama; Tulsa, Oklahoma; Little Rock, Arkansas; Madison, Wisconsin; and Columbus and Albany, Georgia. *fn1" As a result of these surveys and by operation of 5 U.S.C. § 5344(a), pay increases in excess of 5.5% Were to take effect on October 1, 1978 in the Dothan, Alabama wage area, and on October 8, 1978, in each of the other five wage areas. *fn2"

 On October 10, 1978, the President signed into law Pub.L. No. 95-429 (hereinafter pay cap legislation), which is set forth in the pertinent part in the margin. *fn3"

 On October 20, 1978, the Civil Service Commission issued CSC Bulletin 532-30. It provided that the 5.5% Cap on Federal wage increases mandated by the pay cap legislation applied retroactively to wage increases with effective dates between October 1, 1978 and October 10, 1978. As a result of CSC Bulletin 532-30, the employees herein have not received the full amount of the survey determined wage increases. Instead, they have received increases of 5.5%.

 The named plaintiffs and the members of the class they represent seek declaratory and mandamus relief challenging CSC Bulletin 532-30 in an effort to receive the full percentage increases determined pursuant to the aforementioned wage surveys. *fn4"

 Discussion

 The initial question the Court will discuss is whether the pay cap legislation may be applied retroactively to limit statutorily mandated wage increases. Plaintiffs contend that through the operation of 5 U.S.C. §§ 5343(a)(4) and 5344(a), plaintiffs became legitimately entitled to receive the full amount of the scheduled wage increases effective October 1, 1978 for the Dothan, Alabama wage area, and October 8, 1978 for the other wage areas. They further contend that defendants had a ministerial duty to implement these wage increases, and that the subsequent approval of the pay cap legislation may not displace their entitlement.

 Defendants assert that the statutory language "as is consistent with the public interest" in 5 U.S.C. § 5341 Et seq. (hereinafter the Act) provides broad agency discretion in implementing wage adjustments. Defendants argue that this broad discretion and the express statutory mandate of the pay cap legislation authorized agency heads to impose a 5.5% Limit on pay increases with effective dates on or after October 1, 1978.

 Defendants cite no authority in support of their contention that the government may decrease retroactively wage rates for services already performed. Indeed, defendants admit ignorance of any previous situation in which federal employees, by retroactive application of an Act of Congress or Presidential determination, have been denied, or suffered a diminution of, immediately receivable employment benefits such as pay, leave, insurance or health benefits.

 Plaintiffs have cited decisions of the Comptroller General, which hold that a federal employee who obtains an employee benefit under statutes existing at the time of the employment, obtains a vested right to that benefit which may not be disturbed retroactively. United States Civil Service Commission, B-150041, 42 Comp.Gen. 202 (1962); Director, Bureau of the Budget, B-10542, 31 Comp.Gen. 109 (1952).

 The Act evinces a Congressional policy of wage parity for specified federal employees with their colleagues in the private sector. *fn5" It sets forth detailed procedures and requirements for implementing this policy. The legislative history of the Act discloses criticism based on the rigidity of its requirements and the lack of agency discretion it affords. H.R. Report No. 92-339, 92 Cong.Sess. (1972). Additionally, in Blaha v. U. S., Cust. & Pat.App., 206 Ct. Cl. 183, 511 F.2d 1165 (1975), a case involving a wage determination affecting crews of marine vessels under a statutory scheme virtually identical to that of the Act herein, the Court discussed the proper role of the public interest exception at 1170:

 

. . . (T)he "public interest' exception was written to provide flexibility needed to eliminate anomalies and inequities that might arise from too literal conformity to industry pay practices. It was not written to authorize a complete frustration of the Congressional scheme.

 The Court concludes that the Act provides plaintiffs with a vested statutory right to receive the full amount of the survey determined wage increases, *fn6" effective October 1, 1978 for the Dothan, Alabama wage area, and October 8, 1978 for the other wage areas before the Court until October 10, 1978 when the President signed the pay cap into law. This right may not be retroactively disturbed by subsequent legislation nor the public interest exception of the Act itself. Plaintiffs' pay rates were adjusted in accordance with the mandate of s 5343(b). Plaintiffs' right to receive the adjusted pay rates vested on the effective date of the raises pursuant to § 5344(a), before the pay cap became law. Defendants' duty to implement the wage increases on the effective dates or to make retroactive payment some time thereafter pursuant to § 5344(b) *fn7" was ministerial. The public interest exception may not be applied retroactively to disrupt the entire wage scheme set forth in the Act. Moreover, for this Court to allow defendants to deprive plaintiffs of pay due for services already performed but still owing would present serious Constitutional questions. United States v. Larionoff, 431 U.S. 864, 97 S. Ct. 2150, 53 L. Ed. 2d 48 (1977).

 These Constitutional considerations are not present with regard to prospective application of the pay cap. The 5.5% Ceiling applies to all services performed on or after the effective date of the pay cap legislation, October 10, 1978. It is settled that Congress has the authority to reduce the pay of the plaintiffs prospectively without interfering with any of their Constitutional rights. See United States v. Larionoff, supra, 431 U.S. at 879, 97 S. Ct. 2150; Bell v. United States, 366 U.S. 393, 401, 81 S. Ct. 1230, 6 L. Ed. 2d 365 (1961); United States v. Dickerson, 310 U.S. 554, 60 S. Ct. 1034, 84 L. Ed. 1356 (1940); United States v. Yoshida International, Inc., Cust. & Pat.App., 63 C.C.P.A. 15, 526 F.2d 560 (1975).

 An appropriate order is entered herewith and this action is dismissed.

 ORDER

 Upon consideration of the parties' cross-motions for summary judgment, the supporting memoranda and the entire record herein, it is by the Court this 26th day of July 1979,

 ORDERED that plaintiffs' motion be granted and defendants' motion denied with regard to the time period from October 1, 1978 until the President signed P.L. No. 95-429 into law on October 10, 1978 with respect to the Dothan, Alabama wage area; it is further

 ORDERED that plaintiffs' motion be granted and defendants' motion be denied with regard to the time period from October 8, 1978 until the President signed P.L. No. 95-429 into law on October 10, 1978 for the Tulsa, Oklahoma; Little Rock, Arkansas; Madison, Wisconsin; and Columbus and Albany, Georgia wage areas; it is further

 ORDERED that defendants' motion be granted and plaintiffs' motion denied with regard to the time period after which the President signed P.L. No. 95-429 into law; it is further

 ORDERED that defendants make whole the plaintiffs for the loss of salary and any other benefits based on salary consistent with the above; and it is further

 ORDERED that this action be and hereby is dismissed.


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