Lumbard, Chief Judge, and Waterman and Moore, Circuit Judges.
On July 1, 1963, the Government Building in Long Island City, New York, which had been operated by the Department of the Army, was transferred to the Post Office Department. Caputo and the nineteen other plaintiffs in the present action had worked at the building for some time. None of them did mail handling work. They were essentially maintenance personnel: operating engineers, carpenters, tractor and crane operators, boiler firemen, and the like. Two were telephone operators.
On May 28, 1963, each of the plaintiffs had been sent a letter from the Civilian Personnel Office in Fort Totten, informing them of the transfer and telling them that they had a right to transfer to the Post Office Department. The letter went on to say, in essence, that the Post Office would pay employees willing to make the transfer at the salary level applicable to the job, but that the Post Office was prevented by statute from paying such employees at a rate higher than that for the lowest step within the applicable salary level. The letter notified plaintiffs that they had a right to appeal if they accepted the offer to transfer. The letter also said that it constituted advance notice of proposed adverse action to effect the separation of those employees who were unwilling to accept the transfer of activity.
The plaintiffs accepted the proposed transfer, most if not all of them saying that they did so under protest. The heart of their grievance was and is that the transfer meant that they would be paid less for doing for the Post Office Department exactly the same work they had previously done for the Army, because of the Post Office Department's refusal to enter them in the step within each salary level which would result in their getting substantially the same income they had been paid before.*fn1
Plaintiffs appealed to the Regional Director of the Civil Service Commission, who held that the reduction of compensation which resulted from the transfer was "adverse action" against the plaintiffs, entitling them to the benefits of Section 14 of the Veterans' Preference Act, 5 U.S.C. § 863, which was made applicable to all employees in the competitive civil service by Executive Order 10988, January 17, 1962. This section provides that no person covered by it shall be
"* * * reduced in rank or compensation * * * except for such cause as will promote the efficiency of the service and for reasons given in writing, and the person whose * * * reduction in rank or compensation is sought shall have at least thirty days' advance written notice * * *, stating any and all reasons, specifically and in detail, for any such proposed action * * *; [such person] shall be allowed a reasonable time for answering the same personally and in writing, and for furnishing affidavits in support of such answer, and shall have the right to appeal to the Civil Service Commission from an adverse decision of the administrative officer so acting * * *."
The Regional Director held that the procedural requirements of Section 14 were not followed here, because the May 28th letters did not furnish the employees with the opportunity to reply, and because the employees were not furnished with final decisions containing the reasons for the action taken.
The Post Office Department appealed this decision to the Board of Appeals and Review of the Civil Service Commission, which reversed. The Board held that the transfer was a "transfer of function" governed by regulations under Section 12 of the Veterans' Preference Act, 5 U.S.C. § 861, and that these regulations, while they require preservation of tenure of appointment in an interagency transfer, do not require maintenance of the same rates of compensation. The Board held that it lacked jurisdiction to determine whether the law required employees of another government agency who transfer to the Post Office Department to be paid at the lowest step of the applicable salary level.
Plaintiffs thereupon brought suit in the Eastern District of New York, requesting the setting aside of the Board's decision and the issuance of a writ of mandamus ordering their reinstatement to their former jobs with the Department of the Army or, in the alternative, their appointment to a salary step within the Postal Field Service schedule of compensation which would afford them the same compensation they had previously received from the Department of the Army.
The District Court remanded the case to the Civil Service Commission to consider whether the Post Office Department was required by law to place plaintiffs in the lowest step of the applicable salary level. The Commission referred the question to the Comptroller General, who decided that the Post Office Department was required to act as it did by Section 501 of the Postal Field Service Compensation Act of 1955, 39 U.S.C. § 3551 (a). The court thereupon granted summary judgment for defendants, agreeing with the Comptroller General's interpretation of the law, although he recognized that "the construction is indeed a harsh one which upon a mere paper transfer of employees from one agency to another so sharply reduces the wages of these employees, many of whom are veterans, and all of whom have rendered faithful service." From this judgment, plaintiffs appeal.
The Application of 39 U.S.C. § 3551(a).
Section 3551(a) of Title 39 provides that:
"The Postmaster General may appoint any person who has been employed in a civilian capacity in any branch of the Government to any position in a regional or district office or to any professional or scientific position and may place him in any step in the salary level of the Postal Field Service Schedule which is less than one ...