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Favreau v. United States

Affirming the Court of Federal Claims' summary judgment for the government, the Federal Circuit held that the government's recoupment of enlistment and re-enlistment bonuses from members of the armed forces who were separated from service for failing to comply with physical fitness standards was a reasonable interpretation of the applicable statute.

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This is a class action suit brought by former members of the armed forces whose enlistment or reenlistment bonuses were recouped by the United States after they were separated from the armed forces for failing to comply with applicable weight control or physical fitness standards. Upon enlisting or reenlisting, each service-member received a monetary bonus, which served as additional compensation to be earned on a pro rata basis during the term of enlistment or reenlistment. While the facts applicable to each service-member differ slightly, military records uniformly reflect that they: (1) received dietary counseling and participated in remedial weight or fitness programs; (2) were warned that failure to meet service standards might result in discharge; and (3) failed to comply with weight or fitness standards for non-medical reasons.

Between the time of enlistment or reenlistment and discharge the Defense Department issued two memoranda addressing separation categories. In April of 1983, Assistant Secretary of Defense Lawrence Korb, under authority delegated by the Secretary of Defense, promulgated a list of separation categories that would result in recoupment. The Korb memorandum was later submitted to the Military Pay and Allowance Committee in a proposal to revise paragraph 10942 of the Department of Defense Pay Manual. On March 10, 1992, Assistant Secretary of Defense Christopher Jehn issued a memorandum creating a new separation category called “weight control failure” and directed use of this category by all of the armed forces. The Jehn memorandum stated that the “weight control failure” category was created to resolve disparity among service separation policies and provide for equitable treatment.

In 1998, Favreau was separated from the Army for failure to comply with weight control standards. The Army recouped the unearned portion of his reenlistment bonus. Favreau initiated a civil action in the District Court for the District of Maine challenging the recoupment, and the case was transferred to the United States Court of Federal Claims. Count one of the complaint alleged that the government breached enlistment or reenlistment contracts. Count two alleged that the recoupment of the unearned portion of bonuses was an illegal exaction because it violated the Department of Defense Financial Management Regulations and provisions of the Military Pay and Allowance Act, 37 U.S.C. �� 308 and former 308a. *fn1

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