Department of Justice Seal

FOR IMMEDIATE RELEASE

CIV

FRIDAY, JUNE 23, 2000

(202) 514-2007

WWW.USDOJ.GOV TDD

(202) 514-1888


PAST AND PRESENT FEDERAL GOVERNMENT EMPLOYEES TO

RECEIVE OVER $230 MILLION FOR COST-OF-LIVING
ALLOWANCE ADJUSTMENT


WASHINGTON, D.C. - The government will pay as many as 70,000 present and former federal employees who worked outside the continental United States $232.5 million as part of an agreement concerning disputed cost-of-living allowances (COLA), the Justice Department announced today. The settlement, subject to federal court approval in the Virgin Islands, resolves litigation brought by federal workers in Alaska and Hawaii, as well as Puerto Rico, the Virgin Islands and Guam, in which the employees contended that they were entitled to receive back pay since October 1990, because the COLA rates were set too low.

COLA rates, which by law use the Washington, D.C. metropolitan area as the base, vary from location to location dependent on differences in living costs. However, the plaintiffs contended that the current way of calculating COLA rates does not conform with the law in that it does not take into account other factors, such as environment, location and increased travel costs, that impact of federal employees outside the continental United States.

As a result of the agreement, the employees will waive any claims for additional past payments and for future claims so long as the COLA rates are set and implemented according to a methodology agreed to in the settlement documents.

The settlement is the result of a "Safe Harbor Process" in which the government and the employees have been engaged since 1996, in an effort to resolve nearly two decades of litigation regarding the appropriate methodology for setting COLA rates. The name was chosen because, if an agreed methodology could be achieved, the government would receive a "Safe Harbor" against future litigation.

The following cases will be resolved as a result of this settlement: Angelet et al. v. United States, No. 97-1378 DRD (D.P.R.); Caraballo et al. v. United States, No. 1997/0027 JLR (D.V.I.); Cruz et al. v. United States, No. 98-00021 JSU (D. Guam); Matsuo et al. v. United States, No. 97-01418 HDM (D. Haw.); Alaniz et al. v. OPM, No. A81-072 Civ. (D. Alaska); and Karamatsu et al. v. United States, No. 224-85C (Fed. Cl.).

The settlement was handled by the Department of Justice's Civil Division, with the assistance of the Office of Personnel Management and the United States Postal Service's Office of the General Counsel.

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