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Scharf v. Department of Air Force

June 30, 1983


Bennett, Miller, and Smith, Circuit Judges.


BENNETT, Circuit Judge.

This is an appeal from a final decision of the Merit Systems Protection Board (MSPB). See MSPB No. SFO752B8110009 (July 14, 1982). The issue below was whether petitioner's optional retirement from the federal service was a voluntary or involuntary retirement. The MSPB, in reversing the decision of its Seattle Field Office, held petitioner's retirement to be voluntary because he was neither forced to retire nor intentionally deceived about his retirement options. Thus, the MSPB dismissed petitioner's appeal for lack of appellate jurisdiction. See 5 U.S.C. §§ 7511(b), 7512, 7513(d) (Supp. V 1981); 5 C.F.R. § 752.401(c)(3) (1982). For the reasons that follow, we reverse the decision of the MSPB.

I. Background.

The petitioner, Harvey M. Scharf, retired from federal military service on July 31, 1960, after completing 5 years of National Guard Service and 20 years and 8 days of active duty in the United States Army and Air Force. The following day, August 1, 1960, he began his federal civil service career with the Air Force Commissary Service.

In November 1967, while employed as a Commissary Officer at McChord Air Force Base near Tacoma, Washington, petitioner underwent radical surgery for removal of approximately half of his stomach. As a result of this surgery, petitioner suffers from a condition known as "stomach dumping," i.e., he experiences abrupt bowel voiding after consuming food or drink. Petitioner was able to accommodate his medical condition as long as his travel was limited.

In October 1979, the petitioner was made the Director of the Northwest Complex for the Air Force Commissary Service. In this new position, petitioner was responsible for the management and operational control of five commissary complexes in four states: Washington, Montana, Idaho, and Utah. This increased responsibility and greatly increased travel caused petitioner's health to deteriorate.

Therefore, in March 1980, petitioner sought retirement advice from the agency counselor, Mr. Don Tanner. Mr. Tanner was one of two part-time counselors employed by the agency. Neither counselor had ever received any formal training concerning retirement benefits.*fn1 At this meeting, petitioner and Mr. Tanner discussed ways to maximize petitioner's optional retirement benefits; they did not discuss disability retirement. Mr. Tanner correctly advised petitioner that he should retire based on his 20 years of civil service alone rather than on his more than 40 years of civil and military service combined. Thus, on May 6, 1980, petitioner submitted an application for optional retirement based on his 20 years of civil service, setting August 8, 1980, as the effective date.

Three weeks later, on May 27, 1980, petitioner visited his physician, who advised him to stop working and to stop traveling. Petitioner followed this advice and went on extended sick leave. Because he was unable to work, petitioner promptly went to see Mr. Tanner about submitting an application for disability retirement. Mr. Tanner told the petitioner that a decision on a disability retirement application was unlikely before August 8, 1980, the effective date of petitioner's optional retirement. Petitioner then asked Mr. Tanner about the effect of his optional retirement preceding his disability retirement. Although there was conflicting testimony on this point, the presiding official at the MSPB's Seattle Field Office found that Mr. Tanner told petitioner that "if he retired optionally and that if later his disability retirement were approved and he had already retired that the optional retirement would be set aside and he would go on disability retirement." From Mr. Tanner's statement, one would think that there would be no adverse effects if an optional retirement preceded a disability retirement. But this is not so. Under an optional retirement, accumulated sick leave is added to the length of the retiree's civil service in order to calculate his annuity. Under disability retirement, however, a retiree is allowed to "stay on the rolls" (i.e., stay on the payroll) to exhaust his sick leave at full pay before receiving retirement benefits. But this advantage to disability retirees is not available if an optional retirement precedes a disability retirement.

Despite this adverse consequence, the presiding official found that Mr. Tanner never advised petitioner to withdraw his optional retirement, or informed him that he could not "return to the rolls" if his optional retirement preceded his disability retirement. Thus, when petitioner's disability retirement application, filed June 6, 1980, was approved on August 29, 1980, he was, to say the least, surprised to learn that he could not return to the rolls to exhaust his accumulated sick leave.*fn2

Naturally, petitioner was upset by this fact. After the Air Force refused to allow him to return to the rolls, petitioner filed this action with the MSPB, contending that his August 8 optional retirement was involuntary and should be cancelled. The MSPB's presiding official at the Seattle Field Office carefully weighed all the evidence and found: (1) petitioner could have reasonably concluded from Mr. Tanner's statements that he would be returned to the rolls to use his accumulated sick leave if his disability retirement was approved after the effective date of his optional retirement; and (2) petitioner, in good faith, had in fact believed that he could return to the rolls. Because petitioner had not understood the situation, the presiding official held that his retirement was involuntary. Thus, the agency was ordered to cancel the petitioner's optional retirement and to reinstate him to his former position on sick leave status, effective August 8, 1980.

On appeal, the MSPB reversed the presiding official's initial decision. Although it did not question the factual findings of the presiding official, the MSPB held that petitioner's optional retirement was voluntary because he was neither forced to retire nor intentionally deceived about his retirement options. Petitioner has timely appealed from the MSPB's decision.

II. Discussion.

To determine whether a resignation or retirement is voluntary, a court must examine "the surrounding circumstances to test the ability of the employee to exercise free choice." Perlman v. United ...

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