The 12 employees were offered promotions, back pay and associated benefits as if they had been promoted as of Jan. 8, 2006, several sources confirmed Thursday.
The case goes back to June 2005, when GAO issued a plan for splitting one of its pay bands -- Band II -- into Band IIA and Band IIB. Employees placed in Band IIA were not granted pay increases, while employees placed in Band IIB got raises.
Employees were required to earn a "meets expectations" on their performance appraisal to be eligible for Band IIB placement. GAO issued its final placement decisions in December 2005, and gave employees with Band IIA placement 30 days to appeal to the agency's Office of Opportunities and Inclusiveness or its Personnel Appeals Board, one source said.
"Each one of the 12 marched over to the appeals board as an act of personal courage and chose to run the risk of retaliation," the source said.
Several sources said there was little or no justification for the employees' placement in the lower pay band.
The appeals board's general counsel, which represented the 12 employees, found that the data and calculations used to conduct the employees' performance evaluations were unreliable and included significant flaws and inconsistencies.
Several GAO employees and other sources, who spoke under condition of anonymity, questioned why the watchdog agency - which has insisted the pay determinations were justified - decided to settle with the 12 employees.
The 12 employees are prohibited to speak to anyone about the details of the settlement unless asked as part of a congressional inquiry, one source said, adding that Rep. Danny Davis, D-Ill., has already asked the employees about the settlements.
According to a union newsletter, the settlements enabled GAO to avoid a public hearing before the appeals board on the rules and processes used to make the pay determinations. The newsletter also stated that GAO avoided a potentially unfavorable opinion by the appeals board on the claims submitted by the 12 senior analysts.
Comptroller General David M. Walker said in a statement Thursday that the settlements were in the best interest of all parties. "It will allow GAO to move forward while avoiding significant expenditures of time and potential litigation costs," he said.
Walker added that the remaining Band IIA employees will not be given the opportunity to appeal the decision with the agency's appeals board because of the 30-day rule.
Davis said Friday that he was pleased with the settlements but added that GAO has still left the remaining IIA employees hanging. "We don't know what's going to happen, but we think it might set some kind of precedent," Davis said.
The overall decision to deny raises to Band IIA employees has come under criticism. Walker has argued that the pay determinations were justified by a 2004 study conducted by the consulting firm Watson Wyatt, which concluded that many GAO analysts were overpaid relative to employees with comparable skills and experience at other agencies and outside government.
Though GAO has refused to release the details of the 2004 study, several sources said the numbers used were suspect. The chairs of the House and Senate subcommittees on federal workforce issues, Davis and Sen. Daniel Akaka, D-Hawaii, have ordered Walker to hand over data used in the study, including the outside organizations to which GAO compared itself and which occupations within those organizations were used for comparison.
Davis said that while lawmakers have exchanged correspondence with Walker, Congress has not yet received any data related to the study. "We've been promised the data that we're seeking," Davis said.
Walker on Thursday continued to stand by his decision to deny the employees the raises.
"GAO's Executive Committee believes strongly that it had the full legal authority to conduct the Band II restructuring in the manner that it did and used a sound approach for making the related decisions," Walker said.
Jennifer Tyree, minority counsel for the Senate Homeland Security and Governmental Affairs subcommittee on the federal workforce, said Davis and Akaka plan to hold a joint hearing on GAO's pay issues in late May. Walker and Curtis Copeland of the Congressional Research Service -- who conducted an analysis of why the 308 employees did not receive pay raises last year -- are expected to testify, Tyree said.
"We're certainly hoping the whole matter will get resolved because we don't want the ongoing controversy, especially with what many people consider to be a lead agency," Davis said.