This case is before this court on cross motions for summary judgment. Material
Although this is an Internal Revenue Service (hereafter IRS) case, it relates to an interesting phase of IRS work less known to the public. An IRS employee with the consent of the Secretary of the Treasury may be assigned as a Reserve officer by the Secretary of State under the Foreign Service Act of 1946 as amended, 22 U.S.C. § 921 et seq. As such Reserve officer, he is assigned to foreign posts. In the present case the IRS employee was assigned first to Bolivia and later to Honduras. The pay problem in the case arose after the employee completed his service of about five years and returned to the IRS.
Plaintiff while employed by the IRS in the capacity of a Supervisory Auditor, Regional Inspector's Office, Chicago, Illinois, at grade GS-14, step 3, accepted a limited assignment under the aforesaid Foreign Service Act to the position of Public Administration Advisor — Tax, FC-3, in the Office of the Director, Foreign Tax Assistance Staff (hereafter FTAS), with a duty station at La Paz, Bolivia. This assignment, effective August 2, 1964, began at a salary of $15,675, which was equivalent at the time of a grade GS-15, step 1. Plaintiff's limited assignment to La Paz, Bolivia, was extended several times; and on September 10, 1967, he received a change in duty station from Bolivia to Honduras.
Plaintiff served with the FTAS for a period slightly in excess of five years. During this time he received numerous within-grade increases as well as a "high quality increase" in salary. As a result of these pay elevations, coupled with a statutory increase, and the conversion of the Foreign Compensation (hereafter FC) salary schedule from 14 grades to 12, plaintiff held the position of FC-2, step 3, at a salary of $26,525, at the expiration of his limited assignment to the FTAS in September, 1969.
The conversion of the FC salary schedule from 14 grades to 12, effective July 13, 1969, was made pursuant to AID Notice No. 73, dated July 8, 1969. At the time of the conversion, plaintiff had been holding an FC grade 3, step 6 position since July 28, 1968. That grade and step were then converted on the FC salary schedule to FC grade 2, step 2, at a salary of $25,696. Plaintiff thus held an FC grade 3, step 6 position or its equivalent (in reslotting to FC-2, step 2) for at least one year. He even received another within-grade increase prior to the expiration of his assignment to the FTAS. As a result, the nearest position to plaintiff's FC-2, step 3 classification, with salary at $26,525 at the time of his return to a state-side assignment was General Schedule grade GS-15, step 8, with a salary of $26,629.
Instead of receiving the classification of GS-15, step 8, which plaintiff had anticipated he would receive and to which he believed he was entitled, he was assigned to the position of Auditor (Special Assistant), GS-14, step 10, at a salary of $24,093. This resulted in a reduction in salary upon his return to state-side duty of $2,432 per annum. In questioning the propriety of his salary reduction, he initiated a grievance concerning his assignment to a GS-14 position instead of the comparable GS-15, step 8 slot. The steps he took are listed in the margin.
We quote at the outset the regulations as set forth by the agency in MT 1800-92 (1-5-68) of the IR Manual, particularly Section 183(10).9 entitled "Procedures for Returning Employees from FTAS," which provides in subparagraph (2) as follows:
Defendant does not make a claim of exception predicated upon "the best interests" of the agency.
Plaintiff's entire suit is based on this regulation. He contends that the terms of this regulation were not complied with when the agency failed to assign plaintiff to the GS-15 grade upon completion of his overseas assignment. There is no question that plaintiff at all times satisfactorily performed his overseas assignment. He argues that he was entitled to a GS-15 slot based on his salary in the "highest FC grade held for one year."
Defendant's brief well sets out plaintiff's grades and salaries for the one year preceding the expiration of plaintiff's limited assignment. We reproduce the chronology herein:
Based on the above chronology, plaintiff argues that he held the grade of FC-3, step 6 or its equivalent (in reslotting FC-2/2), for at least one year and was entitled to receive a GS-15 position upon the expiration of his limited FTAS assignment.
Defendant argues that reversion to plaintiff's former or comparable GS-14 was a condition of his FTAS assignment. It is unable to point to any specific statute or regulation requiring such a condition. We hold that no such condition existed and such is not required by the language of the Foreign Service Act. The pertinent IRS regulation, Section 183(10).9(2), which is cited above, provides quite differently by assuring the employee that his new GS salary shall be "established on the basis of the salary of the highest FC grade held for one year."
The "plain meaning" rules of statutory construction
The decision of the Board of Appeals and Review of the Civil Service Commission (hereafter BAR) is erroneous and not in keeping with the mandate provided by the agency's own regulations. The decision states in part as follows (p. 3):
We find that the GS-14, step 10 slot assigned to plaintiff did not compensate him, to use the language of the BAR, with "a salary appropriate to the salary he was earning with FTAS" since it resulted in a reduction in pay of $2,432 per annum. Nor did it meet the more specific standard of the agency's own regulations providing for a new GS salary "established on the basis of the salary of the highest FC grade held for one year."
The binding force and effect of administrative regulations regarding personnel, and the adversely affected employee's right to corrective action (including salary lost) following violation or omissions thereof, were clearly defined by the Court in Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed.2d 1012 (1959), and Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403 (1957), as well as by this court in Jones v. United States, 203 Ct.Cl. 544 (1974); Cason v. United States, 200 Ct.Cl. 424, 471 F.2d 1225 (1973); Fletcher v. United States, 183 Ct.Cl. 1, 392 F.2d 266 (1968); Conn v. United States, 180 Ct.Cl. 120, 376 F.2d 878 (1967); Cole v. United States, 171 Ct.Cl. 178 (1965); Middleton v. United States, 170 Ct.Cl. 36 (1965); Smith v. United States, 155 Ct.Cl. 682 (1961); Daub v. United States, 154 Ct.Cl. 434, 292 F.2d 895 (1961); and Watson v. United States, 142 Ct.Cl. 749, 162 F.Supp. 755 (1958). When a Government official or agency lawfully prescribes rules and procedures, these are binding on the Government as well as on its citizens. Yellin v. United States, 374 U.S. 109, 83 S.Ct. 1828, 10 L.Ed.2d 778 (1963); Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954); Chapman v. Sheridan-Wyoming Coal Co., 338 U.S. 621, 70 S.Ct. 392, 94 L.Ed. 393 (1950); Bridges v. Wixon, 326 U.S. 135, 153 (1945); Bilokumsky v. Tod, 263 U.S. 149, 155, 44 S.Ct. 54, 68 L.Ed. 221 (1923).
In Morton v. Ruiz, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974), the Court stated at p. 235, 94 S.Ct. at p. 1074:
And in United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974), the Court stated at p. 696, 94 S.Ct. at p. 3101:
The claim here involves simply a slotting process stemming from the regulations
Just as in Kellerman, plaintiff had already received the promotion as a result of his meritorious service in the FTAS. This was an accomplished fact. The "automatic" salary slotting for the GS grade necessarily follows. The agency did not follow its own regulations. In affirming the decision of the agency and the Appeals Examining Office, the BAR erred.
BENNETT, Judge (concurring):
I deem it advisable and necessary to add a few words to the able opinion of Judge Kashiwa, in which I join. I agree that this case is ruled by a proper construction of IR Manual § 183(10).9(2), but would make that construction a bit more explicit.
The first sentence of subparagraph (2) reaches employees returning to the General Schedule from FTAS having satisfactorily completed tours of at least 1 year, such as the plaintiff. It states that the new salary of such an employee, on return, will be established by reference to the salary of the highest FC grade held for 1 year. The first sentence does not refer to the highest grade and step held for 1 year, a fact which seems occasionally to have escaped the parties. The second sentence goes on to discuss the step within grade, to which a returning employee will be assigned. Where the final FC-scale salary happens to fall between two steps within the appropriate GS grade, the returning employee will be entitled to the salary of the higher.
Given this construction we must decide whether the plaintiff held the grade of FC-2 or FC-3 for more than 1 year. The evidence indisputably shows that plaintiff's reslotting to FC-2 from FC-3 involved neither a promotion nor a demotion, but was merely the consequence of a reduction in the number of FC grades from 14 to 12. It is also true, however, that the FC-2 grade was assigned to plaintiff less than 1 year before his return to the General Schedule. On the peculiar facts of his case we have decided that in legal contemplation, the FC-2 grade does not differ from that of FC-3. Thus, we think it entirely permissible to say that for purposes of IR Manual § 183(10).9(2), plaintiff in effect held the grade of FC-2 for more than 1 year. The parties agree that FC-2 is equivalent to GS-15.
It remains only to determine the appropriate step within the grade of GS-15 to which plaintiff is entitled. The second sentence of subparagraph (2) makes this a simple matter—on return, plaintiff was entitled to the lowest step of GS-15 having a salary equal to or greater than that of his final FC grade and step.
The Internal Revenue Service clearly erred in applying its own procedures when it assigned this plaintiff to the grade and step of GS-14, step 10. I agree that plaintiff is entitled to recover.
LARAMORE, Senior Judge, agrees with Judge BENNETT's concurring opinion.
Defendant's motion for summary judgment is denied and plaintiff's cross motion for summary judgment is granted.