Court: Pay law does not limit right to travel

By Jonathan Stempel

NEW YORK (Reuters) - A U.S. law that awards thousands of federal employees higher pay than others because of where they live does not unconstitutionally limit the right of people to travel, a federal appeals court said.

Thursday's ruling by the U.S. Ninth Circuit Court of Appeals rejected claims that the 1990 law unfairly penalized federal workers who were ineligible for a form of extra compensation known as "locality pay."

Gregory McGillivary, a Washington, D.C. lawyer representing the workers, did not immediately return a call seeking comment.

The Federal Employees Pay Comparability Act permits extra compensation for some workers in the 48 contiguous U.S. states in order to equalize pay across different geographies. In New York City, for example, the adjustment totals 28 percent.

Two groups of workers challenged the law.

One felt impeded if they wanted to move to places ineligible for locality pay, such as Alaska and Hawaii. The other felt punished because they lived in places, including those states, where they were ineligible for such pay.

Chief Judge Alex Kozinski, writing for a three-judge panel, upheld a Hawaii district court in rejecting the claims.

He said the right to travel lets the government put people who migrate to states on the same footing as people already there. Thus, people who move to Alaska or Hawaii would not get locality pay because people who already lived there did not.

"While the right (to travel) might have other components, being provided with the same federal benefits after moving as before isn't among them," Kozinski wrote.

The judge also said that federal law actually encourages rather than discourages workers in Alaska and Hawaii to travel, by providing superior pay in the other 48 states.

The case is Matsuo v. U.S., U.S. Court of Appeals for the Ninth Circuit, No. 08-15553.

(Editing by Steve Orlofsky)