Office of Administrative Law Judges 2600 Mt. Ephraim Avenue
Camden, NJ 08104
(856) 757-5312 856-757-5403 (FAX)
DATE: March 30, 2000
CASE NO: 1999-DCA-00003
In the Matter of:
MICHAEL F. MILLIGAN Petitioner
v.
U.S. DEPARTMENT OF LABOR,
OFFICE OF WORKERS'
COMPENSATION PROGRAMS, Respondent
DECISION AND ORDER
I. Jurisdiction
This case arises from an attempt by the Respondent U.S. Department of
Labor (DOL), Office of Workers' Compensation Programs (OWCP) to collect a debt owed it by
the Petitioner Michael F. Milligan, an employee of the United States Postal Service, through the
salary offset procedures authorized under section 5514 of the Debt Collection Act of 1982 (the
DCA), 5 U.S.C. §5514, and the implementing regulations at 29 C.F.R. §20.74 et
seq. Milligan disputed the OWCP's determination to collect this debt through salary offset,
and he requested a hearing before the Office of Administrative Law Judges. The DCA in
pertinent part provides that a debtor shall be afforded "an opportunity for a hearing on the
determination of the agency concerning the existence of the amount of the debt, and in the case
of an individual whose repayment schedule is established other than by a written agreement . . .
concerning the terms of the repayment schedule." 5 C.F.R. §5514(d)(2)(D).
II. Procedural History and Evidence Submitted
The debt which OWCP seeks to collect through salary offset procedures
resulted from an overpayment of workers' compensation benefits to Milligan under that Federal
Employees' Compensation Act (FECA), 5 U.S.C. §8101 et seq. The record shows
that in 1997 Milligan was receiving FECA benefits for temporary partial disability based on his
restriction to a four hour per day work schedule. On February 12, 1997, Milligan increased his
work hours from four to six daily, and he increased his work hours again on June 23, 1997 from
six to seven and one half hours daily. However, his FECA benefits were not immediately
adjusted to reflect these increases in Milligan's hours worked. When the OWCP belatedly
discovered that it was still paying benefits to Milligan based on a four hour per day schedule, it
determined that an overpayment had occurred.
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On March 27, 1998, the OWCP issued a preliminary determination that
Milligan had received an overpayment in the amount of $6,800.50 and that he was at fault in the
creation of the overpayment. On April 21, 1998, the OWCP finalized its preliminary
determination that Milligan was at fault in the creation of the overpayment. Accompanying the
final decision was a notice to Milligan that the debt was due and payable, that the overpayment
was subject to accrual of interest, and that, where appropriate, the OWCP could collect the debt
by deductions from his Postal Service salary. The OWCP also notified Milligan that he had the
right to request review of the overpayment decision by the Employees' Compensation Appeals
Board (ECAB). There is no evidence in the record that Milligan ever sought review by the
ECAB.
By letter dated July 7, 1998, the OWCP issued a second demand for
payment, noting that it had not received any indication that Milligan intended to cooperate with
repayment. The letter again informed Milligan that the OWCP was empowered to seek
deductions from salary in the event Milligan did not send payment. The letter further stated to
Milligan that he should reply within 30 days regarding his intention to discharge his
indebtedness. On December 30, 1998, the OWCP issued a third demand for payment. In this
demand, the OWCP noted that its records showed Milligan was currently employed by the
United States Postal Service and that the DCA and Department of Labor regulations authorized it
to recover the overpayment by salary offset in an amount not to exceed 15 percent of his
disposable pay for any period. The letter further notified Milligan of the OWCP's intention to
recover the debt through a biweekly salary offset in the amount of $186.00 and of his right to
request a hearing before an Administrative Law Judge. By letter dated January 12, 1998, Milligan
filed a timely request for a hearing. In this request, he stated that he was not denying that there
was an overpayment, but that he had not been given a chance to go over his file and felt that the
amount claimed by the OWCP was wrong. He also stated that the proposed repayment schedule
would hurt his family.
An oral hearing in the matter was originally scheduled before
Administrative Law Judge Lawrence P. Donnelly for May 18, 1999. On May 17, 1999, Counsel
to DOL filed a notice of appearance and requested for an extension of time to file a responsive
pleading as it intended to appear at the hearing solely through the submission of written
pleadings. Judge Donnelly granted this request, and DOL filed a memorandum of law and
supporting evidence on July 15, 1999. In its memorandum, DOL reiterated that it would appear
solely by written submission based on limited resources and the lack of any substantial issue
regarding witness credibility. Judge Donnelly subsequently retired, and the matter was
reassigned to me.
On November 10, 1999, I issued a notice of hearing for November 30,
1999 which I canceled by order issued on November 22, 1999 after my review of the record
revealed that an oral hearing was not appropriate. In this regard, I noted that the Regulations
provide that the hearing ordinarily shall be based on written submissions and documentation
submitted by the debtor, except that an oral hearing shall be provided when the administrative
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law judge determines that: (1) an applicable statute authorizes or requires the agency to consider
a waiver of the indebtedness, the debtor requests a waiver and the waiver determination turns on
a question of credibility or veracity; (2) the debtor requests reconsideration of the debt and the
question of indebtedness can not be resolved by a review of the documentary evidence; or (3) an
oral hearing is otherwise appropriate. 29 C.F.R. §20.81(c). I further noted that Milligan
stated in his request for hearing that he does not deny the overpayment but contends that the
amount is wrong and that the repayment amount requested by OWCP will hurt his family. Since
DOL had advised that it did not intend to appear at an oral hearing, in part because of the lack of
any issue regarding the credibility of witnesses, I determined that there is no material question of
credibility or veracity requiring a hearing and that an oral hearing is not otherwise warranted as it
appears that a decision on all issues may be made on the basis of written submissions.
Accordingly, I canceled the oral hearing, and I allowed Milligan until December 27, 1999 to
submit the following: (1) a statement, accompanied by documentary evidence and statements
from knowledgeable witnesses (if any), which fully identifies and explains with reasonable
specificity the facts which support his position that the Respondent Agency's information relating
to the debt is not accurate, timely, relevant or complete; and (2) a statement, accompanied by
documentary evidence showing his monthly expenses and income from all sources, in support of
his contention that the Respondent Agency's proposed repayment schedule is not feasible,
allowable and appropriate because it would result in financial hardship to his family.
Pursuant to my order, Milligan submitted a letter dated December 20, 1999
in which he states that it has come to his attention that he is not responsible for the overpayment
of FECA benefits. In support of this contention, Milligan submitted copies of what he represents
are e-mail messages between Cathleen M. Taylor of the Postal Service Compensation
Department and Anne H. Vogtli also of the Postal Service. These messages, which cover the
periods of February 13-14, 1997, May 5 to June 3, 1997 and November 5-6, 1998, indicate that
Milligan requested to increase his work hours and that Ms. Taylor and Ms. Vogtli were aware
that an increase in his hours would result in a corresponding decrease in his FECA benefits. This
is illustrated by the following message dated May 9, 1997 from Ms. Taylor to Ms. Vogtli:
Sorry, I forgot to answer you. If we changed hin to 8 hours, it would have to be
full time, and with his doctor's concurrence.
He has it made right now. Comp still hasn't reduced his compensation payments.
So, he is working 6 per day, and still getting paid from them as if he were working
4. THEY ARE SO SLOW!
If he went to a 40 hour week, his comp would end altogether.
Milligan contends that these messages show that he always informed Postal Service
compensation officials when his hours were changed. Milligan further states, by way of
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background, that he was on disability retirement, not workers' compensation, in June 1996 when
he was offered and accepted a job at the Postal Service. According to Milligan, this job offer did
not state that he would receive compensation for the difference in pay from the time he was
injured. Milligan additionally argues that he suffers from work-related carpal tunnel syndrome,
that OWCP has not approved surgery for this condition, that OWCP had not proved the amount
of the overpayment to him by means of producing canceled checks, and that it is his position that
DOL owes him money because he has been reduced to part-time flexible employee due to his on-
the-job injury resulting in a reduction of earnings and benefits totaling $3,154.00 per year.1 Finally, Milligan stated in his letter that he
had previously submitted evidence concerning the financial burden of the repayment schedule,
and he requested that this be considered in arriving at a decision in this matter.
1 Milligan arrives at this annual loss
figure by computing the value of his lost holiday pay (80 hours per year), the loss of one hour of
work per week (52 hours per year), lost vacation time (14 hours per year) and lost sick time (six
hours per year) at his wage rate of $20.75 per hour. He further claims a projected total injury-
related loss of $47,30.00 based on an annual loss of $3,154.00 multiplied by the 5 years that he
has remaining before retirement eligibility.