Gordon v. Office of Personnel Management
689 F. App'x 977
| Fed. Cir. | 2017Background
- Gordon applied for FERS disability retirement in Feb 2009; OPM approved interim FERS payments (~$1,118–$1,147/month) while processing and instructed him not to negotiate Social Security (SS) checks because SS benefits would offset FERS.
- SSA awarded Gordon disability benefits effective April 1, 2009; Gordon negotiated SS payments (~$1,984/month) while also receiving interim FERS payments.
- In Jan 2012 OPM finalized Gordon’s annuity: actual earned FERS was $326/month after offset, producing a $33,127.42 overpayment for Apr 1, 2009–Jan 30, 2012; OPM reduced repayment to $50/month based on hardship but denied waiver.
- Gordon appealed to the MSPB; the administrative judge (AJ) upheld OPM’s calculations and denied waiver, finding Gordon without fault but rejecting financial-hardship, detrimental-reliance, and unconscionability claims; the Board affirmed.
- On appeal to the Federal Circuit, the court found internal inconsistencies in the AJ’s and Board’s reasoning (finding Gordon without fault but also treating him as aware of the overpayment) and concluded that recoupment was unconscionable given OPM’s lengthy unexplained delays and resulting loss of other benefits.
- Result: Federal Circuit reversed and directed the Board to instruct OPM to waive recovery of the $33,127.42 overpayment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accuracy of OPM’s overpayment calculation | Gordon argued OPM ignored TSA service and miscalculated annuity | OPM and AJ found calculations correct and Gordon waived challenge by not raising it properly | Court held Gordon waived challenge to calculations for failure to timely contest and present new evidence |
| Waiver standard — "without fault" and Set-Aside Rule | Gordon contended he was without fault and not required to set aside funds; Set-Aside Rule inapplicable | OPM/AJ/Board found him without fault but also treated him as aware of overpayment invoking Set-Aside Rule | Court found the agencies’ positions internally inconsistent: Prompt Notification Exception did not apply, so Set-Aside Rule could not be applied as the Board did; agency reasoning was arbitrary |
| Equity & good conscience — financial hardship and detrimental reliance | Gordon asserted financial hardship and loss of VA/state benefits and a forgivable loan due to inflated reported income | OPM/AJ found insufficient current financial evidence (Gordon refused updated questionnaire) and that Gordon’s negotiation of SS checks undermined detrimental reliance | Court upheld AJ’s finding on financial-hardship (insufficient current evidence) but rejected AJ/Board on detrimental reliance because their reasoning improperly reintroduced fault and contradicted the without-fault finding |
| Unconscionability (exceptional circumstances) | Gordon argued OPM’s nearly three-year delay to finalize benefits and nearly four-year delay to decide reconsideration made recoupment unconscionable | OPM/AJ deemed delays not "monstrously harsh" enough to qualify as exceptional; denied waiver | Court found totality of circumstances (two long unexplained delays, loss of other benefits, without-fault status) rendered recoupment unconscionable and ordered waiver of the overpayment |
Key Cases Cited
- Fields v. Department of Justice, 452 F.3d 1297 (Fed. Cir. 2006) (standard of review for MSPB decisions)
- Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197 (1938) (definition of substantial evidence)
- Boyd v. Office of Personnel Management, 851 F.3d 1309 (Fed. Cir. 2017) (discussion of fault and Set-Aside Rule under OPM guidelines)
- Gant v. United States, 417 F.3d 1328 (Fed. Cir. 2005) (failure to timely challenge agency calculations can waive the argument)
- King v. Office of Personnel Management, 730 F.3d 1342 (Fed. Cir. 2013) (standards for waiver based on relinquishment or change in position)