Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Yokota Air Base
Yokota, Japan
Robert D. Hendler
Classification and Pay Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
04/11/2016
Date
The claimant is a Federal civilian employee of the Department of the Air Force (AF) at Yokota Air Base, Yokota, Japan. He requests the U.S. Office of Personnel Management (OPM) reconsider his agency’s denial of separate maintenance allowance (SMA) to provide a separate domicile for his spouse "based on career consideration." We received the claim on April 14, 2015, and the agency administrative report (AAR) on May 21, 2015. For the reasons discussed herein, the claim is denied.
While residing in the United States, the claimant applied, was selected for, and appointed to a position at Yokota AB, effective April 4, 2015. The agency denied his request for SMA on the basis that although the claimant provided proof that his spouse owns a private business in Jacksonville, Florida, and stated it could not be managed from the overseas area, "the fact that she owned this business prior to [claimant's] application and acceptance of the position at Yokota AB, Japan, indicates that her intent was never to relocate with her spouse." The claimant asserts that section 260 of the Department of State Standardized Regulations (DSSR) "specifically indicates "career" as a legitimate consideration for approval of SMA," that "anyone with a "career" has had to have the job prior to the application by the very definition of career," and that it was not economically feasible for his spouse to relocate her business to Japan.
The agency, in its AAR, expanded upon its rationale for denial of SMA:
...The fact that [the] company is relatively new, acquired in 2012, and the fact that it involves manufacturing and distribution, would lead to simple conclusion that she would not be readily available to join [claimant] to any foreign overseas location... [Claimant] does not make a claim that his spouse is unable to secure employment at his new duty station. As a business owner there are many transferrable skills that could translate to the federal sector. SMA is not an entitlement. It is not intended to augment an employee's income whenever a spouse elects to stay behind and continue to work at their current job.
The Overseas Differentials and Allowances Act, as amended and codified in Section 5921 – 5928 of title 5, United States Code (U.S.C.), provides that, under regulations prescribed by the President, SMA may be paid to Federal employees in foreign areas. Section 5924(3) of title 5, U.S.C., states that SMA may be granted to assist an employee who is compelled or authorized, because of dangerous, notably unhealthy, or excessively adverse living conditions at the employee’s post of assignment in a foreign area, or for the convenience of the Government, or who requests such an allowance because of special needs or hardship involving the employee or the employee’s spouse or dependents, to meet the additional expenses of maintaining, elsewhere than at the post, the employee’s spouse or dependents, or both.
By Executive Order, the President delegated this authority to the Secretary of State, who issues the DSSR governing overseas allowances and differentials. The DSSR further delegates the authority to grant SMA to the heads of Federal agencies. Section 262 of the DSSR states:
SMA may be granted to an employee whenever the head of agency determines that the employee is compelled to maintain any or all members of family elsewhere than at the foreign post of assignment…
Section 262.2 further describes voluntary separate maintenance allowance (VSMA), in relevant part, as follows:
An agency may authorize VSMA when an employee requests VSMA for special needs or hardship prior to or after arrival at post for reasons including but not limited to career, health, educational or family considerations for family members.
Department of the Air Force, Pacific Air Forces, policy on SMA is contained in “B&E Memorandum 14-1,” dated August 25, 2014, which states, in relevant part, the circumstances “under which SMA may be granted:"
(b) Career Considerations: Request must include a letter of employment and/or statement from the gaining base regarding lack of positions in any given career field.
* * * * *
(d) Other Personal Extenuating Circumstances: Circumstances must be unusual, extenuating and/or beyond the employee’s control and fully justified. For example, an employee who accepts a position knowing that family members do not desire to travel to the foreign area is making a personal choice. It will not be considered as unusual or extenuating circumstances.
The Memo also states that “[c]riteria for requests will be strictly applied” and that “SMA will be extended only when it is determined to be clearly in the interest of the government.”
The language applying to SMA in 5 U.S.C. § 5924 is permissive rather than mandatory, and the language in the DSSR is similarly permissive. By the use of the permissive term “may” as opposed to the mandatory terms “will,” “shall,” or “must” in relation to SMA, agencies are granted discretionary authority in allowing or disallowing SMA in individual cases. By its adoption of this permissive language in B&E Memorandum 14-1, policy established by the Pacific Air Forces retains the discretionary nature of SMA approval. Under statutes that vest a degree of discretion in administrative agencies, our review is generally confined to deciding whether an agency’s action must be viewed as arbitrary, capricious, or so at variance with the established facts as to render its conclusion unreasonable.
Although Pacific Air Forces policy permits the granting of SMA for “career considerations,” it requires “a letter of employment and/or statement from the gaining base regarding lack of positions in any given career field.” The term “career field” is not defined but can be reasonably construed as meaning within the general field of occupation, in this case business management and allied fields. There is no documentation in the record from the gaining base of a lack of such positions, nor does the claimant assert that his spouse would be unable to secure employment at his new duty station. Further, the claimant has provided very limited information about the business, Argo Century, Inc., owned by his spouse, and no documentation establishing that the business could not be managed from or relocated to Yokota beyond his mere assertion that it was “not feasible at this time.” In fact, he undermines this assertion by stating:
The second item supporting my appeal is the fact that as owner, if economically feasible, [spouse] has the undeniable ability to relocate…she already relocated her business 50% of the times I have conducted a Permanent Change of Station (PCS)… as owner of a small business, she has much more flexibility to relocate, then [sic] if she were in another career position where she was not the decision maker.
Thus, the claimant would not appear to have complied with the requirements of B&E Memorandum 14-1 by either submitting all of the documentation required with his initial request regarding potential employment for his spouse in the local area or by fully justifying his assertion that her business could not be managed from or relocated to Yokota.
The claimant also challenges the agency’s conclusion that his spouse’s “intent was never to relocate” her business by asserting that she did not have adequate time to determine the portability of her business prior to his acceptance of the position:
…HRO [Human Resources Office] allows only two working days to accept or decline a position, research on relocating a business takes 40-60 hours minimum… Last year I applied for 10 +/- positions in five countries and to attempt to determine portability prior to a job offer is not realistic for a small business person to do.
That the claimant would consider it “not realistic” to determine portability of his spouse’s business preparatory to applying for and subsequently accepting an overseas position with the potential monetary implications for his family is unsupported by the record. The claimant’s request for SMA to the agency was dated January 28, 2015, although his reassignment to the position at Yokota AB was not effective until April 4, 2015, thus leaving ample time to conduct any such research. Given the claimant’s above statements, we find the agency’s conclusion that the claimant in effect made a personal choice to relocate regardless of his wife’s willingness or ability to accompany him was reasonable.
As discussed above, SMA is a discretionary allowance, not an entitlement. Thus, an agency may deny SMA payments when it finds that the circumstances justify such action, and the agency’s action will not be questioned unless it is determined that it was arbitrary, capricious, or unreasonable. Under 5 CFR 178.105, the burden is upon the claimant to establish the liability of the United States and the claimant’s right to payment. Joseph P. Carrigan, 60 Comp. Gen. 243, 247 (1981); Wesley L. Goecker, 58 Comp. Gen. 738 (1979). In this case, the claimant has not submitted any documentation that would lead us to conclude that the agency’s decision to deny him SMA was arbitrary, capricious, or unreasonable, and as such there is no basis on which to reverse the decision.
This settlement is final. No further administrative review is available within OPM. Nothing in this settlement limits the claimant's right to bring an action in an appropriate United States court.