Petition for review of the Merit Systems Protection Board in No. AT0353000909-B-1.
The opinion of the court was delivered by: Linn, Circuit Judge.
Before BRYSON, CLEVENGER, and LINN, Circuit Judges.
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.
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).
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 ...