Divorce is a State of Mind–But What About the Federal Health Insurance?

A federal employee said she was divorced but kept her ex-husband and his two children on her federal health insurance policy. An investigator found that a divorce decree submitted by the employee was not issued by a court. She was fired and appealed her case to a federal court.

A Texas postmaster fired for giving the agency a fraudulent divorce decree in the course of an official investigation could not convince the Merit Systems Protection Board or the appeals court to overturn her removal. (Schultz v. United States Postal Service C.A.F.C. No. 2009-3023 (nonprecedential), 4/6/09) The facts reported below are taken from the appeals court’s recent decision in the case.

Linda Schultz went to work for the U.S. Postal Service in 1983. In 1999 she filed for divorce from her husband but when she failed to follow up on the petition the court dismissed her petition. A few years later, Ms. Schultz’ husband, Wavily Britten, won a contract for his company (B&B Maintenance) to do janitorial services at the Dickenson, Texas post office where Ms. Schultz was then postmaster. (Opinion, pp. 1-2)

A few years later, the agency’s inspector general office investigated the B&B Maintenance contract. During this investigation, an OIG agency interviewed Ms. Schultz and asked about her relationship with Britten, the owner of B&B Maintenance. Schultz stated that she was divorced from Britten and faxed the investigator a copy of a final divorce decree as proof. Unfortunately for Schultz the investigator discovered that the divorce decree was false. It had not been issued by a court and was “counterfeited.” (p. 2)

The investigator also uncovered the fact that Schultz was carrying Britten and his two daughters on her federal health insurance policy that identified them as her spouse and stepchildren. (p. 2)

The USPS removed Schultz for providing a false divorce decree during the OIG investigation, or, in the alternative, improperly claiming insurance coverage for Britten and his two children if she and Britten were indeed divorced. (pp. 2-3)

The MSPB’s administrative judge affirmed Schultz’s removal. The AJ found that Schultz the divorce decree submitted by Schultz during the agency investigation was false, Schultz admitted it was false, and that Schultz had “knowingly” supplied the false decree with the intent of “defrauding, deceiving, or misleading” the agency. (p. 3) At the hearing Schultz apparently came up with a  scenario explaining her behavior. She testified that she believed that she and Britten were legally divorced and the decree was valid. To support this, Britten testified that he had paid for a fraudulent divorce decree and had told Schultz that it was genuine. The AJ found both Schultz’s and Britten’s testimony to lack credibility, citing the fact that Schultz had continued to carry Britten and his children on her health insurance policy as evidence that she knew they were still married. Or, if you accept they were in fact divorced, then the AJ found that Schultz improperly kept Britten and the kids on her health insurance when they were no longer eligible for coverage. (pp. 3-4)

Schultz took her case to federal court. The court has sided with the USPS and the MSPB and sustained Schultz’s removal. The thing that tripped Schultz up with the agency and the Board also tripped her up with the court. Essentially she could not have it both ways. Either she was divorced or not. If she wasn’t, then the divorce decree she submitted was false and was given to the agency with intent to mislead. If she was divorced, then she improperly kept her ex-husband and his two children on her federal health insurance policy knowing they were not eligible to be covered. Case closed. (pp. 5-6)

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.