Portsmouth Naval Shipyard (Activity) and Federal Employees Metal Trades Council (Union)

 



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07:0030(9)AR
The decision of the Authority follows:


 7 FLRA No. 9
 
 PORTSMOUTH NAVAL SHIPYARD
 Activity
 
 and
 
 FEDERAL EMPLOYEES METAL
 TRADES COUNCIL
 Union
 
                                            Case No. O-AR-133
 
                                 DECISION
 
    THIS MATTER IS BEFORE THE AUTHORITY ON AN EXCEPTION TO THE AWARD OF
 ARBITRATOR WILLIAM J. FALLON FILED BY THE AGENCY UNDER SECTION 7122(A)
 OF THE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE (5 U.S.C.
 7122(A)) (THE STATUTE).
 
    ACCORDING TO THE ARBITRATOR, THIS MATTER AROSE WHEN THE ACTIVITY
 NOTIFIED THE GRIEVANTS THAT THEY WERE BEING TRANSFERRED FROM THE SECOND
 SHIFT, FOR WHICH EMPLOYEES RECEIVED A SHIFT PREMIUM, TO THE FIRST SHIFT,
 FOR WHICH THERE WAS NO PREMIUM.  GRIEVANCES WERE FILED AND ULTIMATELY
 SUBMITTED TO ARBITRATION CLAIMING THAT THE ACTIVITY IMPOSED THE SHIFT
 CHANGE AS A DISCIPLINARY ACTION IN VIOLATION OF THE PARTIES' COLLECTIVE
 BARGAINING AGREEMENT.  THE ARBITRATOR AGREED THAT THE SHIFT CHANGE
 VIOLATED THE AGREEMENT AND SUSTAINED THE GRIEVANCES.  WITH RESPECT TO A
 REMEDY, THE ARBITRATOR DETERMINED THAT "(O)NLY BY REQUIRING INTEREST ON
 THE DENIED SHIFT PREMIUM CAN THE EMPLOYEES BE MADE FULLY WHOLE."
 ACCORDINGLY, THE ARBITRATOR MADE THE FOLLOWING AWARD:
 
    THE GRIEVANCES ARE SUSTAINED.  THE EMPLOYER IS DIRECTED TO FORTHWITH
 TRANSFER THE GRIEVANTS
 
    TO THE SECOND SHIFT, AND COMPENSATE THEM FOR THE LOSS OF SHIFT
 PREMIUM FROM AUGUST 13, 1979,
 
    WITH INTEREST AT THE RATE PAID ON SAVINGS BY THE FEDERAL CREDIT
 UNION.
 
    PURSUANT TO SECTION 7122(A) OF THE STATUTE /1/ AND PART 2425 OF THE
 AUTHORITY'S RULES AND REGULATIONS (5 CFR PART 2425), THE AGENCY FILED AN
 EXCEPTION TO THAT PORTION OF THE AWARD DIRECTING THE PAYMENT OF
 INTEREST.  THE UNION FILED AN OPPOSITION.  /2/
 
    IN ITS EXCEPTION TO THE AWARD OF INTEREST, THE AGENCY CONTENDS THAT
 SUCH AN AWARD IS CONTRARY TO LAW.  IN SUPPORT OF THIS EXCEPTION, THE
 AGENCY ARGUES THAT IT IS WELL ESTABLISHED THAT UNLESS AUTHORIZED BY
 STATUTE, INTEREST MAY NOT BE RECOVERED ON CLAIMS AGAINST THE FEDERAL
 GOVERNMENT.  CLAIMING THAT THE ONLY APPLICABLE STATUTE, THE BACK PAY ACT
 OF 1966, DOES NOT AUTHORIZE THE AWARD OF INTEREST, THE AGENCY ASSERTS
 THAT THE AWARD IN THIS CASE IS CONTRARY TO LAW.
 
    IN OPPOSITION THE UNION GENERALLY DISPUTES THAT INTEREST IS
 ORDINARILY UNAVAILABLE ON CLAIMS AGAINST THE FEDERAL GOVERNMENT AND
 ATTEMPTS TO DISTINGUISH THE CASES CITED BY THE AGENCY IN SUPPORT OF ITS
 EXCEPTION.  PRIMARILY, HOWEVER, THE UNION ARGUES THAT BY VIRTUE OF THE
 ENACTMENT OF THE STATUTE AND THE AMENDMENTS TO THE BACK PAY ACT MADE BY
 THE CIVIL SERVICE REFORM ACT OF 1978, THE ARBITRATOR WAS EXPRESSLY
 EMPOWERED TO AWARD INTEREST ON THE COMPENSATION GRANTED THE GRIEVANTS.
 
    PURSUANT TO SECTION 7122(A)(1) OF THE STATUTE, THE AUTHORITY WILL
 FIND AN ARBITRATION AWARD DEFICIENT WHEN IT HAS BEEN SHOWN THAT THE
 AWARD IS CONTRARY TO LAW.  FOR THE REASONS THAT FOLLOW, THE AUTHORITY
 FINDS THAT THE AWARD OF INTEREST BY THE ARBITRATOR IN THIS CASE IS
 CONTRARY TO LAW AND THAT IT MUST BE MODIFIED ACCORDINGLY.
 
    THE RULE IS SETTLED THAT UNLESS AUTHORIZED BY AN EXPRESS PROVISION IN
 A RELEVANT STATUTE OR CONTRACT, INTEREST IS NOT AVAILABLE AGAINST THE
 FEDERAL GOVERNMENT.  UNITED STATES V. ALCEA BAND OF TILLAMOOKS, 341 U.S.
 48(1951);  UNITED STATES V. THAYER-WEST POINT HOTEL CO., 329 U.S.
 585(1947);  UNITED STATES V. GOLTRA, 312 U.S. 203(1940);  SEABOARD AIR
 LINE RY CO. V. UNITED STATES, 261 U.S. 299(1923).  /3/ THUS, "(I)NTEREST
 IS PROSCRIBED UNLESS EXPRESSLY ALLOWED." RICHERSON V. JONES, 551 F.2D
 918, 925 (3D CIR. 1977). THE UNION ARGUES THAT THE EXPANDED ROLE AND
 COVERAGE OF GRIEVANCE PROCEDURES AND ARBITRATION PROVIDED BY THE
 STATUTE, ALONG WITH THE CONCURRENT AMENDMENTS MADE TO THE BACK PAY ACT
 OF 1966 BY SECTION 702 OF THE CIVIL SERVICE REFORM ACT OF 1978, /4/
 INDICATES AN EXPRESS CONGRESSIONAL INTENT THAT ARBITRATORS ARE TO HAVE
 BROAD REMEDIAL POWERS TO MAKE EMPLOYEES WHOLE WHEN THEY HAVE BEEN
 AFFECTED BY AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION.  THE UNION
 ASSERTS THAT SUCH BROAD REMEDIAL POWERS INCLUDE THE POWER TO AWARD
 INTEREST ON BACKPAY.  HOWEVER, THERE IS NO EXPRESS PROVISION IN EITHER
 THE STATUTE OR THE BACK PAY ACT WHICH AUTHORIZES AN AWARD OF INTEREST,
 AND COURTS HAVE REJECTED ASSERTIONS OF THE KIND ADVANCED BY THE UNION
 THAT THE REQUISITE AUTHORIZATION MAY BE FOUND IN THE REMEDIAL PURPOSES
 OF RELEVANT STATUES.  BECAUSE THE WAIVER OF TRADITIONAL SOVEREIGN
 IMMUNITY "CANNOT BE IMPLIED BUT MUST BE UNEQUIVOCALLY EXPRESSED," UNITED
 STATES V. TESTAN, 424 U.S. 392, 399(1976), IT HAS BEEN HELD THAT COURTS
 ARE PRECLUDED FROM DECIDING WHETHER THE POLICIES OF REMEDIAL STATUTES
 MAY PERMIT THE RECOVERY OF INTEREST.  FITZGERALD V. STAATS, 578 F.2D 435
 (D.C. CIR.), CERT.  DENIED 439 U.S. 1004(1978)
 
    IT HAS ALSO BEEN SPECIFICALLY HELD THAT THE BACK PAY ACT PRIOR TO THE
 1978 AMENDMENTS "D(ID) NOT AUTHORIZE AN AWARD OF INTEREST, SINCE
 CONGRESS OMITTED INTEREST FROM THE OTHERWISE QUITE DETAILED RELIEF FOR
 WHICH IT PROVIDE(D)." ID. AT 438;  VAN WINKLE V. MCLUCAS, 537 F.2D 246
 (6TH CIR. 1976), CERT. DENIED, 429 U.S. 1093(1977).  THE LEGISLATIVE
 HISTORY TO THE CIVIL SERVICE REFORM ACT INDICATES CONGRESSIONAL INTENT
 TO CONTINUE THIS EXPRESS OMISSION IN THE BACK PAY ACT.  IN THIS REGARD,
 THE FINAL VERSION OF THE BILL PASSED BY THE HOUSE, H.R. 11280, INCLUDED
 AMONG ITS PROVISIONS AMENDING THE BACK PAY ACT A SPECIFIC PROVISION FOR
 THE PAYMENT OF BACKPAY, "PLUS 5 PERCENT." /5/ HOWEVER, THE VERSION OF
 THE BILL REPORTED OUT OF THE SENATE-HOUSE CONFERENCE COMMITTEE, WHICH
 WAS ULTIMATELY ENACTED AND SIGNED INTO LAW, WHILE ADOPTING NEARLY ALL OF
 THE OTHER PROVISIONS OF H.R. 11280 AMENDING THE BACK PAY ACT, DID NOT
 CONTAIN THIS "PLUS 5 PERCENT" PROVISION.  THIS ACTION "STRONGLY
 MILITATES AGAINST A JUDGMENT THAT CONGRESS INTENDED A RESULT THAT IT
 EXPRESSLY DECLINED TO ENACT." SEE GULF OIL CORPORATION V. COPP PAVING
 COMPANY, INC., 419 U.S. 186, 200(1974).  /6/
 
    THUS, THE SETTLED RULE THAT INTEREST IS PROSCRIBED WHEN NOT EXPRESSLY
 AUTHORIZED IS CONTROLLING IN THIS CASE.  BECAUSE NO RELEVANT STATUTORY
 PROVISION EXPRESSLY PERMITS THE INTEREST AWARDED BY THE ARBITRATOR, HIS
 AWARD MUST BE MODIFIED ACCORDINGLY.
 
    CONSEQUENTLY, PURSUANT TO SECTION 2425.4 OF THE AUTHORITY'S RULES AND
 REGULATIONS, THE ARBITRATOR'S AWARD IS MODIFIED BY STRIKING "WITH
 INTEREST AT THE RATE PAID ON SAVINGS BY THE FEDERAL CREDIT UNION." AS
 MODIFIED, THE ARBITRATOR'S AWARD IS SUSTAINED.
 
    ISSUED, WASHINGTON, D.C., OCTOBER 21, 1981
 
                       RONALD W. HAUGHTON, CHAIRMAN
 
                       HENRY B. FRAZIER III, MEMBER
 
                        LEON B. APPLEWHAITE, MEMBER
 
                     FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
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