Have You Failed to Pay Your Debts? It Could Cost You Your Federal Job

By on March 8, 2007 in Current Events with 0 Comments

If you are a federal employee who owes a substantial amount of money to creditors, can you lose your job? Can an agency force an employee to pay off his debts or risk losing a job as a civil servant?

The answer is generally "yes" depending on a number of factors. Here is a recent case from the MSPB that upholds the ability of an agency to fire an employee who has not paid off his debts. But, read the case carefully, as one Board Member did not see a significant problem with a federal employee failing to pay off old debts when the debts were old, would be discharged by the statute of limitations and were incurred while the person was unemployed and/or in jail. . (Craig A. Adams v. Department of the Army, CH-0752-06-0251-I-1, February 23, 2007)

In this case, the Army took away access to the agency’s computer for Craig Adams (the appellant) because he had refused to pay $50,000 in debt he owed to third parties. The agency concluded his failure to pay the money displayed a lack of integrity and responsibility. He was then fired from his job as a human resources assistant because he could not maintain his access to the agency’s computer system which was required to do his job.

While he owed more than $50,000, the MSPB decision notes that the Army tried to get him to consolidate his debts and to start paying on the amount he owed. He made a payment of $200 to one creditor, evidently anticipating that his debts to other creditors – or at least most of them – would be deleted from his credit report as a result of the passage of time. And, despite the advice of an employee assistance counselor to reduce the 15% of his check he was sending to the Thrift Savings Plan each month, he continued to make the payments to his TSP retirement fund instead of paying off the debt.

He appealed the decision. The administrative judge (AJ) at the MSPB reversed the removal action. He was not as fortunate before the entire Board, however, as a majority of the Board members concluded that taking away access to the computer system was a reasonable action by the Army and, since he could not do his job, firing him was also a reasonable decision.

But not all of the Board members agreed with the decision. Board Member Barbara Sapin concluded that Adams only owed about $40,000 rather than more than $50,000 cited by the majority decision. Moreover, she reasoned, because he had owed the money for a long time, the statute of limitations would take care of the problem by removing the indebtedness. And, showing a distinct trait of liberal kindness, the fact that the debt had been incurred "when he was unemployed, underemployed, and/or incarcerated" was a mitigating factor and did not mean that he would not meet his financial obligations in the future.

In short, Adams remains fired but has the consolation of knowing that at least one Board member did not think failing to pay a substantial debt reflected on his integrity and should disqualify him from federal service.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.