Under the Social Security Act’s Windfall Elimination Provision, does the uniform-services exemption apply to Civil Service Retirement System payments derived from service as a dual-status technician?
This case asks the Supreme Court to determine whether the uniformed services exemption under the Social Security Act applies to the Civil Service Retirement System pensions of dual-status technicians. Petitioner David Babcock argues that the entirety of his service as a dual-status technician was as a uniformed member of the National Guard and he thus should entirely fall under the exemption. The Social Security Administration, under Acting Commissioner Kilolo Kijakazi, argues that the portion of Babcock’s service as a dual-status technician that was compensated by the Civil Service Retirement System pension was performed in his capacity as a civilian employee and therefore it should not fall under the exemption. The outcome of this case will impact the benefits available to dual-status technicians and clarify the distinction between dual-status technicians and other military personnel.
Questions as Framed for the Court by the Parties
Whether a civil service pension received for federal civilian employment as a “militarytechnician (dual status)” is “a payment based wholly on service as a member of a uniformed service” for the purposes of the Social Security Act’s windfall elimination provision.
From 1975 to 2014, Petitioner David Babcock (“Babcock”) was employed as a National Guard dual-status technician. Babcock v. Comm’r of Soc. Sec. at 1–2. A dual-status technician, under 10 U.S.C. § 10216(a)(1) and 32 U.S.C. § 709(e), is “‘a [f]ederal civilian employee’ who ‘is assigned to a civilian position as a technician’ while maintaining membership in the National Guard.” Id. at 2. As a dual-status technician, Babcock was classified as a federal civilian employee and received a Civil Service Retirement System pension (“CSRS”). Id. Due to his military service, Babcock also received a military pension. Id. at 3. Moreover, he was eligible for Social Security benefits based on his active-duty service and private sector employment. Id. In 2009, Babcock retired from the National Guard and later applied for Social Security benefits in 2014. Id.
When the Social Security Administration (“SSA”) authorized Babcock’s application for Social Security Retirement Benefits, the agency decided to apply the Windfall Elimination Provision of the Social Security Act to Babcock’s CSRS payments. Id. The Windfall Elimination Provision reduces a person’s social security benefits by a percentage of the pension payments they received for employment for which they did not pay Social Security taxes. Id. at 3, 7; see 42 U.S.C. § 415(a)(7)(A)–(B). By applying the Windfall Elimination Provision to Babcock’s CSRS payments, the SSA reduced his Social Security benefits by a percentage of his CSRS payments. Babcock at 3, 7; see 42 U.S.C. § 415(a)(7)(A)–(B). In response, Babcock appealed the SSA’s decision and requested the SSA to reconsider its decision to reduce his benefits. Babcock at 3. Babcock argued that the Windfall Elimination Provision should not apply to his dual-status technician derived CSRS payments due to the uniformed services exemption. Brief for Petitioner, David Babcock at 23. The uniformed services exemption excludes “a payment based wholly on service as a member of a uniformed service … which is based in whole or in part upon his or her earnings for service” from the Windfall Elimination Provision. 42 U.S.C. § 415(a)(7)(A). Therefore, such payments are not deducted from Social Security benefits. 42 U.S.C. § 415(a)(7)(A)–(B).
Before and during Babcock’s proceedings, the federal appellate courts produced divergent rulings on whether dual-service technicians were covered under the uniformed services exemption. Babcock at 3–4. The United States Courts of Appeal for the Eighth Circuit ruled that the uniformed services exemption applied to dual-status technicians. Id. Later, the United States Court of Appeals for the Eleventh Circuit ruled that the uniformed services exemption did not apply to dual-status technicians. Id. at 4. Following the Eighth Circuit’s ruling, the SSA applied the uniformed services exemption to the CSRS payments of dual-status technicians residing in the Eighth Circuit. Id.
On appeal, the SSA rejected Babcock’s request because he was not a resident of the Eighth Circuit. Id. at 4. Babcock appealed the SSA’s administrative decision. Id. at 3–4. Subsequently, an administrative law judge (“ALJ”) and the Appeals Council ruled in favor of the SSA. Id. at 4.
Afterward, Babcock sued the Commissioner of Social Security in the United States District Court for the Western District of Michigan seeking judicial review of the SSA’s decision. Id. Here, the district court followed the Eleventh Circuit’s ruling and concluded that the uniform-services exemption does not apply to dual-service technicians’ CSRS payments. Id. The District also rejected Babcock’s claim that his due process and equal protection rights were violated. Id.
Babcock appealed to the United States Court of Appeals for the Sixth Circuit.
Id. at 1, 5. The Sixth Circuit upheld the lower’s court decision. Id. at 11. The Court determined Babcock was not an exclusive military employee, and thus the uniformed services exemption was inapplicable. Id. at 7–8. According to the Court, Babcock as a dual-status technician was eligible for CSRS merely because of his status as a “federal civilian employee” who was “assigned to a civilian position.” Id. at 8. However, the Court found that the plain language of the uniformed services exemption requires “payment based exclusively on employment in the capacity or role of a member of a uniform service” and Babcock’s CSRS pension, is not based exclusively on his military employment. Id. at 10.
WHETHER BABCOCK WHOLLY SERVED AS A UNIFORMED SERVICE MEMBER
Petitioner Babcock contends that a payment is eligible for the uniformed services exemption if it is wholly derived from service within a uniformed service. Brief for Petitioner, David Babcock at 23; see 42 U.S.C. § 415(a)(7)(A). Babcock further explains how service within the National Guard is classified as service within a uniformed service. Brief for Petitioner at 24; see 42 U.S.C. § 410(m); see 38 U.S.C. § 101(27)(G)-(H). Babcock argues that his service as a dual-status technician was conditioned on his enlistment in the Michigan National Guard and his subsequent dual-status technician work was as a member of the Michigan National Guard. Brief for Petitioner at 31. Babcock then contends that as a member of the Michigan National Guard, he was simultaneously a member of the National Guard. Id. at 36; see 10 U.S.C. § 12107(b)-(c). Consequently, Babcock argues that the entirety of his service as a dual-status technician within the Michigan National Guard was also as a member of the National Guard and thus should be considered a uniformed service member. Brief for Petitioner at 31, 33.
Babcock argues that the dual-status technicians only engage in work that supports the National Guard. Id. at 24. Babcock disagrees with the SSA’s division of the duties of the dual-status technicians, contending that all duties are crucial to the maintenance and functioning of the National Guard, and are therefore in the service of the National Guard. Id. at 24, 27, 32–33. Moreover, Babcock points out that while the dual-status technicians perform these duties, they wear military uniforms, hold military grades, and serve directly under military officers. Id. at 24, 33. According to Babcock, the duties of dual-status technicians that the SSA attempts to delineate, are indistinguishable and are performed in the same manner regardless of the present activation status. Id. at 33.
Babcock asserts that the application of military doctrine to dual-status technicians further indicates that they wholly serve as members of a uniformed service. Id. For example, Babcock points out that, under the Feres doctrine, dual-status technicians—just like all other uniformed service members—are prohibited from suing the government for injuries that arise out of their service. Id. In contrast, Babcock explains that civilian employees of the federal government are not precluded from filing such claims against the government for injuries arising out of their employment. Id. Accordingly, Babcock contends that dual-status technicians cannot be military personnel for one purpose and civilians for another; in other words, that “[t]he government cannot have it both ways.” Id. at 33–34.
Respondent the SSA instead claims that the work of dual-status technicians should be divided into three separate components. Brief for Respondent, Kilolo Kijakazi, Acting Commissioner of Social Security at 24. The SSA delineates the service of dual-status technicians in the following ways: service as a member of the State National Guard, service as a member of the National Guard and service as a member of the civilian civil service. Id. In particular, the SSA contends that the dual-status technicians only serve as members of the State National Guard when they engage in Title 32 drills and training, members of the National Guard during periods of federal active duty and members of the civil service during all other activities when not federally activated. Id.; see 32 U.S.C. § 502.
The SSA concedes that the uniformed services exemption applies to the retirement payments that the dual-status technicians received for their active-duty service as members of the National Guard. Brief for Respondent at 22-23. According to the SSA, those payments are the ones that the Defense Finance and Accounting Service (“DFAS”) transfers to the dual-status technicians. Id. at 22. However, the SSA argues that payments from the CSRS are not eligible for the uniformed services exemption because they were granted as a result of the work the dual-status technicians performed as civil service members. Id. at 23. In addition, the SSA acknowledges that dual-status technicians automatically join the National Guard when they become members of a State National Guard. Id. at 27. Yet, the SSA argues that the dual-status technicians are not always serving in their capacity as members of the National Guard per Perpich v. Department of Defense. Id. According to the SSA, the dual-status technicians are required to take leave without pay from their civilian role when they are activated for federal service. Id. at 37.
The SSA accepts that the overall work of the dual-status technicians is sufficiently military in nature for the Feres doctrine to apply. Brief for Respondent at 44-45. However, the SSA argues that the respective questions and standards for the Feres doctrine and the uniformed services exemption are entirely different. Id. As such, the SSA contends that Feres doctrine determinations cannot be used to ascertain the applicability of the uniformed services exemption. Id.
CONGRESSIONAL INTENT AND THE UNIFORMED SERVICES EXEMPTION
Babcock next asserts that Congress intended to apply the uniformed services exemption to the entirety of the dual-status technicians’ service. Brief for Petitioner at 30. Babcock claims that if Congress intended to only apply the uniformed services exemption to a segment of their work, then Congress would have written such a limitation into 42 U.S.C. § 415(a)(7)(A). Id. In such a scenario, Babcock argues that Congress would have explicitly distinguished between service by uniformed service members without dual-status as civilian employees, and service by uniformed service members with dual-status as civilian employees when writing the statute. Id. According to Babcock, the congressional purpose of the uniformed services exemption was to prevent the windfall provision from stripping veterans of compensation derived from their service, including for training and drills that occurred outside of federal active duty. Id. at 35; see 42 U.S.C. § 415(a)(7)(A). Babcock claims that applying the uniformed services exemption to the entirety of the dual-status technicians’ service better serves Congress’s purpose. Brief for Petitioner at 35.
Babcock explains that Congress intended for the uniformed services exemption to apply to uniformed service members that are partially civilian in classification. Id. at 38. Babcock supports this argument by asserting that the uniformed services exemption already applies to uniformed, civilian officers within the National Oceanic and Atmospheric Administration Corps (“NOAA Corps”) and the Public Health Service Corps (“PHS Corps”). Id. at 37–38; 42 U.S.C. § 410(m). Babcock contends that the dual-status technicians’ classification as civilian employees is superficial. Id. at 36. In particular, Babcock suggests that Congress assigned them the civilian classification for clerical purposes. Id.
By contrast, the SSA argues that Congress intended to only apply the uniformed services exemption to the DFAS payments of the dual-status technician. Brief for Respondent at 34. The SSA highlights Congress’s decision to utilize two separate sources for the dual-status technicians’ retirement fund: one being a military account and the other being a civilian account. Id. at 22-23, 34. Moreover, the SSA contends that Congress intended for the military account to award payments for uniformed service and the civilian account to award payments for civilian services. Id. at 22-23.
The SSA then argues that the uniformed services exemption applies to officers within the NOAA Corps and PHS Corps because those organizations are explicitly mentioned by Congress as uniformed services. Id. at 42. The SSA further distinguishes between the officers of the NOAA Corps and PHS Corps and the dual-status technicians since the former are always on active duty. Id. at 41-42. In addition, the SSA disputes Babcock’s claim that the officers of the NOAA Corps and PHS have civilian characteristics. Id. The SSA explains that the classification is more than a superficial designation because it grants dual-status technicians access to financial benefits that are exclusively for civilian employees. Id. at 36-37. In addition, the SSA asserts that dual-status technicians engage in civilian service since they are allowed to join labor unions like other civilian employees, but unlike other uniformed services. Id. at 37. Therefore, the SSA argues that the dual-status technicians are substantially civilian employees. Id. at 36. As such, the SSA concludes that their work in said capacity was not intended to be eligible for the uniformed services exemption. Id. at 37-38.
FINANCIAL IMPACT ON DUAL STATUS TECHNICIANS
In support of Babcock, the National Veteran Legal Services Program et al. (“NVLSP”) explains that excluding dual-status technicians’ CSRS payments from the uniformed services exemption will reduce the dual-status technicians’ Social Security benefits. See Brief of Amici Curiae National Veterans Legal Services Program, et al. (“NVLSP”), in support of Petitioner at 26. The NVLSP asserts that approximately fifty percent of the National Guard serves as dual-status technicians, comprising forty-six percent of the Army National Guard and fifty seven percent of the Air National Guard are dual-status technicians. Id. at 12. As such, the NVLSP suggests that the decision will impact a sizeable percentage of the nation’s National Guard. See Id.
In response, the SSA argues that the decision will affect only a limited number of dual-status technicians. Brief for Respondent, Kilolo Kijakazi, Acting Commissioner of Social Security at 12–13. The SSA explains that only those dual-status technicians who began their service before 1984 will be subject to the Windfall Elimination Provision. Id. at 12–13. Further, the SSA argues that the dual-status technicians who began before 1984 will have their CSRS pensions subject to the Windfall Elimination Provision because they did not pay taxes on their civil service payments. See id. In contrast, the SSA contends that dual-status technicians, who started after 1984, will not have their CSRS pensions subject to the Windfall Elimination Provision because they paid and continue to pay Social Security taxes on their civil service payments. See id.
EQUITABLE TREATMENT OF MILITARY PERSONNEL
The NVLSP, in support of Babcock, asserts that not applying the uniformed services exemption to the CSRS pensions would be unfair because the entirety of the service of other uniformed service members falls under the exemption. See Brief for NVLSP at 26. Moreover, the dual-status technicians would still be subjected to the legal burdens of military service – such as the Feres doctrine – without experiencing the totality of the benefits, thus creating an inequitable regime. See id. The NVLSP further contends “dual-status technicians and full-time reservists” are functionally identical, and that the treatment of dual-status technicians as civilians, either in whole or in part, disregards their actual role in the National Guard. Id. at 12–13, 16–17. Similarly, Babcock argues that it would be equitable if the uniformed services exemption was applied to the CSRS pensions of the dual-status technicians, in order to compensate the dual-status technicians for the entirety of their military work. See Reply for Petitioner, David Babcock at 15.
Meanwhile, the SSA contends that it would be inequitable to apply the uniformed services exemption to the CSRS payments of the dual-status technicians. See Brief for Respondent at 46. In particular, the SSA explains that doing so would unfairly benefit the dual-status technicians for their civilian work, while denying the same benefits to other uniformed services members that concurrently held other civil service positions. Id. In addition, the SSA claims that ruling for the Petitioner would further widen the inequity between dual-status technicians and other uniformed service members, since dual-status technicians are already granted various civilian benefits and rights – such as the right to unionize – that the latter do not enjoy. See id. at 7, 46.
The authors would like to thank Professor Jed Stiglitz for his guidance and insights
into this case.
- Babcock v. Saul, Ballotpedia (accessed Oct. 4, 2021).
- Cassie Maas, Supreme Court to hear Supplemental Security Income, Social Security Act cases, Jurist (March 1, 2021).