Reemployed Annuitant Became 'At Will' Employee

A re-employed annuitant who elected to continue receiving her retirement annuity when she went back to work tried unsuccessfully to convince the MSPB and now the court to hear her termination appeal. (Terrill v. Merit Systems Protection Board, CAFC No. 2014-3185 (nonprecedential), 4/10/15)

Ms. Terrill previously worked for the Defense Finance & Accounting Service when she was separated by reduction in force. She filed her retirement papers and received a Federal discontinued service annuity beginning the very next day. Luckily for her, about five weeks later she was appointed to a position with the Army National Guard as a reemployed annuitant. She opted to continue receiving her full retirement annuity. What she apparently did not realize is that by law, continuing to receive her annuity meant that her new position was considered “at will” employment.

Four years later Terrill’s employing agency ordered up the termination of all reemployed annuitants because of budget problems. She was terminated and appealed to the MSPB. She argued that the agency had improperly classified her as a reemployed annuitant rather than a permanent employee, which would have made all the difference to her rights. The MSPB ruled it had no jurisdiction over her appeal since she was an “at will” employee and thus had no appeal rights.

The appeals court now has agreed with that MSPB decision.

Terrill argued that her situation should be an exception since her reemployment was under the Priority Placement Program, which she felt is more or less a “continuation” of her previous employment. Finding this interpretation unsupported by law, the court points out that her argument “misses the point, as an employee’s status as a reemployed annuitant serving at will does not turn on the process by which reemployment occurs.” (pp. 4-5)

Ms. Terrill had another argument that also fell flat. When first reemployed the Standard Form 50 indicated she was a permanent employee, the agency later corrected that to indicate she was an “at will” employee, but it should not be allowed to change her status like that. She also contended she was not told what the effect was of continuing to receive her annuity. The court cited precedence that the form alone does not determine actual employment status. Since she continued to receive the annuity, then by operation of “the plain language” of the applicable law she was subject to termination “at will.” It was her responsibility to determine the “consequences” of her situation when she was reemployed. (p. 5)

Terrill v. MSPB (2014-3185)

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

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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