A client of the Attig Law Firm appears to have prevailed in her appeal to the Merit Systems Protection Board today. We received a preliminary ruling yesterday indicating that an Administrative Judge intends to rule in our Client’s favor on the question of whether or not our client was entitled to a particular benefit of federal employment. The actual ruling will likely be issued sometime in early 2008, after a hearing on the discrimination portion of our client’s claims.

Our client is the wife of Donney (last name omitted), who is now deceased. Donney served our country in Vietnam, where he received the Purple Heart with Oak Leaf Cluster, and was exposed to the Agent Orange that ultimately led to his untimely death. After leaving the armed services, Donney continued to serve his country for 30 years as a civilian employee of a Federal Executive Agency (we will not disclose the Agency due to the pending litigation).

In early 2006, Donney entered the hospital in what turned out to be his final illness. Days prior to his death, his wife, acting under a Durable Power of Attorney, retired her husband from civilian service and elected an Alternative Funded Annuity (AFA) pursuant to his direction years earlier. The AFA is a benefit available to retiring federal employees, with less than 12 months to live, that allows the retiring employee to take 50% of their annuity in a lump sum, and the other 50% paid out in monthly installments.

The Office of Personnel Management rejected the retirement application and refused to pay the lump sum benefit – a substantial sum of money. OPM’s rationale for rejecting the retirement and AFA election was that OPM claimed that Congress did not permit them to recognize the Durable Power of Attorney created under color of State law. OPM tried to argue that they had a long history of requiring the employee alone to request retirement and elect an AFA. Interestingly, OPM could not identify a single other case where it denied a benefit applied for through a Durable Power of Attorney.

After a hearing in October before the Merit Systems Protection Board, an Administrative Judge disagreed with OPM and issued a preliminary ruling finding that our client was entitled to be retired under a Durable Power of Attorney and was entitled to have received the AFA.

In addition to the impact of this ruling on our client, this issue has implications for every Federal government employee – if you are among the tens of thousands of Federal employees who has created a Durable Power of Attorney as part of your estate planning, OPM should not be able to ignore your Durable Power of Attorney’s right to act in your stead in the event you become medically or mentally incapacitated.

The case is not over yet. In January 2008, the MSPB is holding a hearing on the claim that OPM’s decision to deny benefits in this case was a violation of the Title II of the Americans with Disabilities Act (guaranteeing that public-service employment benefits shall be administered in a non-discriminatory manner), and/or the Age Discrimination in Employment Act (ADEA).

We’ll keep you posted on any developments. If OPM has rejected your application for a retirement benefit, or any other public service benefit, because it was made while acting under a Durable Power of Attorney, please contact an MSPB attorney, such as the Attig Law Firm, today.