20:0380(39)AR - Bureau of Engraving and Printing, Treasury and Washington Plate Printers Union, Local No. 2 IPDEU -- 1985 FLRAdec AR



[ v20 p380 ]
20:0380(39)AR
The decision of the Authority follows:


 20 FLRA No. 39
 
 BUREAU OF ENGRAVING AND 
 PRINTING, U.S. DEPARTMENT 
 OF THE TREASURY
 Activity 
 
 and 
 
 WASHINGTON PLATE PRINTERS UNION, 
 LOCAL NO. 2, IPDEU, AFL-CIO 
 Union 
 
                                                 Case No. 0-AR-818
 
                                 DECISION
 
    This matter is before the Authority on exceptions to the award of
 Arbitrator Frederick U. Reel filed by the Agency under section 7122(a)
 of the Federal Service Labor-Management Relations Statute and part 2425
 of the Authority's Rules and Regulations.
 
    A grievance was filed and submitted to arbitration in this case
 challenging the Activity's implementation of revised performance
 standards for journeyman plate printers at the Activity.  Before the
 Arbitrator the Activity maintained that the grievance was not grievable
 because the Union's grievance essentially challenged the content of the
 production standard that had not yet been applied to any employees.  The
 Arbitrator agreed that the Activity was free to establish unilaterally a
 new production performance standard, but disagreed that this was
 dispositive of the grievance.  Instead, the Arbitrator viewed the
 grievance as encompassing a challenge to the Activity's implementation
 of the revised performance standards without permitting bargaining over
 the "methodology" used by the Activity in revising the standards or over
 the allowance for non-productive "down time." Because the Arbitrator
 determined these matters to be within the duty to bargain, the
 Arbitrator sustained the grievance and directed that the Activity
 bargain with the Union over these matters, that the Activity stop giving
 effect to the revised performance appraisal system, and that the
 Activity cancel any appraisals issued under the revised system.
 
    As one of its exceptions, the Agency contends that the award is
 deficient as contrary to section 7106(a)(2)(A) and (B) of the Statute.
 The Authority agrees.
 
    The Authority has consistently held that proposals which
 substantively restrict management in its identification of critical
 elements of a position and establishment of performance standards are
 inconsistent with section 7106(a)(2)(A) and (B) of the Statute as
 improper interferences with management's right to direct employees and
 to assign work.  E.g., National Treasury Employees Union and Department
 of the Treasury, Bureau of the Public Debt, 3 FLRA 769(1980), aff'd sub
 nom. NTEU v. FLRA, 691 F.2d 553 (D.C. Cir. 1982);  American Federation
 of Government Employees, AFL-CIO, Local 1968 and Department of
 Transportation, Saint Lawrence Seaway Development Corporation, Massena,
 New York, 5 FLRA 70(1981) (Proposals 1-2), aff'd sub nom. AFGE, Local
 1968 v. FLRA, 691 F.2d 565 (D.C. Cir. 1982), cert. denied, 461 U.S.
 926(1983).  Similarly, the Authority has held that proposals which
 would, as their sole effect, subject management's determinations
 concerning the identification of critical elements and the content of
 performance standards to the grievance procedure and arbitral review
 constituted improper interference with management's rights.  E.g., Saint
 Lawrence Seaway Development Corporation, 5 FLRA 70 (Proposal 4).  In so
 holding, the Authority has noted that subjecting managerial evaluations
 concerning critical elements and performance standards to arbitral
 review would require an arbitrator to substitute his or her judgement as
 to how the agency should be run for that of management.  National
 Treasury Employees Union and Department of Health and Human Services,
 Region 10, 13 FLRA 732, 734(1982), aff'd sub nom. NTEU v. FLRA, No.
 84-7034 (9th Cir, Aug. 5, 1985).  "Under the Statute, however,
 management has the right to evaluate the relative importance of job
 tasks and to formulate levels of achievement for those tasks based upon
 its own determination of the agency's operating needs, goals, and
 priorities." Id.
 
    With respect to the arbitrator's role in resolving grievances
 involving performance appraisal matters, consistent with the above
 holdings and section 7106(a)(2)(A) and (B) of the Statute, an arbitrator
 could not determine that a grievance directly challenging an agency's
 identification of job elements or establishment of performance standards
 is grievable and arbitrable.  E.g., Veterans Administration, St. Louis,
 Missouri and American Federation of Government Employees, Local 2192, 19
 FLRA No. 30(1985);  American Federation of Government Employees, Local
 1917 and U.S. Immigration and Naturalization Service, 15 FLRA No.
 147(1984).  Nor could an arbitrator render an award substituting his or
 her judgment concerning the identification of critical job elements and
 establishment of performance standards for that of management.  See,
 e.g., National Treasury Employees Union and U.S. Customs Service, 17
 FLRA No. 12(1985).
 
    It is equally well established, on the other hand, that there is a
 duty to bargain under section 7106(b)(3) on appropriate arrangements for
 employees adversely affected by management's exercise of its authority
 under section 7106(a), e.g., actions which adversely affect employees
 taken under the performance standards established by management.  E.g.,
 American Federation of Government Employees, AFL-CIO, Local 32 and
 Office of Personnel Management, Washington, D.C., 3 FLRA 784,
 791-92(1980) (Proposal 5).  Thus, in the facts of that case, the
 Authority specifically found that the proposal in dispute merely
 established a general, nonquantitative requirement by which the
 application of critical elements and performance standards established
 by management may subsequently be evaluated in a grievance by an
 employee who believes that he or she has been adversely affected by the
 application of management's performance standard to him or her.  To that
 extent, the Authority held that the proposal was within the duty to
 bargain.  Under such a proposal the Authority noted that an employee
 against whom management takes disciplinary action for unacceptable
 performance may, in a grievance of such action pursuant to section
 7121(e) of the Statute, raise the issue of whether the performance
 standards as applied to him or her meet the contractual requirements,
 i.e., the arbitrator of such a grievance would simply determine if the
 standard established by management as applied to the grievant complied
 with the "fair and equitable . . . " requirements of the parties'
 agreement.  In finding that proposal to be within the duty to bargain,
 the Authority specifically noted that such an arrangement did not affect
 management's discretion to determine the content of performance
 standards nor did it authorize an arbitrator to substitute his or her
 judgment for that of management as to the content of the standards.
 
    The Authority has distinguished between proposed grievance procedures
 subjecting management's identification of critical elements and
 establishment of performance standards to arbitral review and grievance
 procedures relating only to the application of such elements and
 standards to an individual employee through the appraisal process.
 Saint Lawrence Seaway Development Corporation, 5 FLRA 70 (Proposal 4).
 As has been noted, the Authority found in that case that a proposed
 procedure which provided for grievances directly challenging the
 identification of critical elements and the establishment of the
 performance standards conflicted with management's rights.  In contrast,
 however, the Authority citing AFGE, Local 32, also ruled that a proposed
 extension of the grievance procedure to any action taken as a result of
 the application of performance standards to an employee appropriately
 would extend the negotiated grievance procedure to matters relating to
 the adverse affect on an employee of the exercise by management of its
 authority under section 7106 of the Statute.  In ruling that the
 application of management's elements and standards to an employee in the
 context of a performance appraisal is grievable, the Authority has
 consistently emphasized, as in the OPM case discussed above, that such a
 grievance would not relate to the establishment of the standards,
 because the review by an arbitrator would not preclude management from
 determining the content of the elements and standards and would not
 result in the setting of new elements and standards.  Instead, arbitral
 review would simply and appropriately determined whether the application
 of the elements and standards to the employee through a performance
 appraisal complied with applicable law, regulation, and the parties'
 collective bargaining agreement.  See, e.g., American Federation of
 Government Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance
 Corporation, Chicago Region, Illinois, 7 FLRA 217(1981) (Proposal 7).
 
    Consistent with the above holdings and the Statute, an arbitrator may
 resolve a grievance by an employee who believes that he or she has been
 adversely affected by management's application of performance standards
 in a performance appraisal to that particular employee.  In judging
 management's application of standards and elements to a grievant, an
 arbitrator may determine that, in the circumstances of the case,
 management has not applied the elements and standards which it had
 established to a grievant or has applied those, or other elements and
 standards, in violation of law, regulation, or an appropriate
 agreed-upon general, nonquantitative review criterion.  In such
 circumstances, an arbitrator could, for example, sustain an employee's
 grievance alleging that management had not applied the elements and
 standards which it had established or had applied those, or other
 elements and standards, in violation of law, regulation, or an
 appropriate agreed-upon general, nonquantitative review criterion.  In
 sustaining the grievance the arbitrator as a remedy could direct that
 the grievant's work product be granted the rating to which entitled
 under the standards and elements established by management or be
 reevaluated by management utilizing those standards and elements.
 Social Security Administration and American Federation of Government
 Employees, SSA, Local 1923, AFL-CIO, 7 FLRA 544(1982).  See also
 American Federation of Government Employees, AFL-CIO, Loclal 2855 and
 U.S. Army, Military Traffic Management Command, Eastern Area, 13 FLRA
 251, 253(1983).  However, in resolving such a grievance, an arbitrator
 may not, of course, substitute his or her judgment for that of the
 agency as to the appropriateness of elements and standards established
 by management.  Further, an arbitrator may not conduct an independent
 evaluation of an employee's performance under the elements and standards
 established by management and substitute his or her judgment as to what
 should be that employee's performance evaluation and rating.
 
    In terms of this case, the Arbitrator correctly determined that to
 the extent the grievance objected to the "numbers" of the production
 performance standard, the grievance directly challenged the Activity's
 exercise of its authority to establish new standards and could not be
 considered.  However, contrary to the determination in the award that
 the grievance was grievable and arbitrable to the extent of methodology
 and "down time," the Authority has likewise held that proposals
 concerning such matters pertain to the exercise by management of its
 authority to establish performance standards and consequently are
 inconsistent with section 7106(a)(2)(A) and (B) of the Statute.  E.g.,
 American Federation of Government Employees, Local 32, AFL-CIO and
 Office of Personnel Management, 19 FLRA No. 9(1985) (Proposal 2 ("down
 time"));  Saint Lawrence Seaway Development Corporation, 5 FLRA 70
 (Proposal 3 (methodology)).
 
    Consequently, the Authority concludes that by finding the grievance
 arbitrable to the extent of methodology and "down time" and resolving
 the grievance to that extent on the merits, the award is deficient in
 its entirety as contrary to section 7106(a)(2)(A) and (B) of the
 Statute.  Accordingly, the award is set aside.  /1/
 
    Issued, Washington, D.C. September 27, 1985
                                       (s) HENRY B. FRAZIER III
                                       Henry B. Frazier I