21:0991(118)AR - AFGE, Local 2014 and SSA, Region IV -- 1986 FLRAdec AR



[ v21 p991 ]
21:0991(118)AR
The decision of the Authority follows:


 21 FLRA No. 118
 
 AMERICAN FEDERATION OF GOVERNMENT 
 EMPLOYEES, LOCAL 2014
 Union
 
 and
 
 SOCIAL SECURITY ADMINISTRATION, 
 REGION IV
 Activity
 
                                            Case No. 0-AR-999
 
                                 DECISION
 
                         I.  STATEMENT OF THE CASE
 
    This matter is before the Authority on an exception to the award of
 Arbitrator Lawrence Kanzer filed by the Activity under section 7122(a)
 of the Federal Service Labor-Management Relations Statute and part 2425
 of the Authority's Rules and Regulations.
 
                  II.  BACKGROUND AND ARBITRATOR'S AWARD
 
    The grievants in this case, contact representatives in the Activity's
 teleservice center, claimed that they received lower performance ratings
 than they should have because, after the beginning of the designated
 annual appraisal period, the Activity improperly changed and
 retroactively applied the requirements for the number of phone calls and
 workload reports to be completed each hour.  According to the
 Arbitrator, the annual appraisal period was from October 1 of the year
 to September 30 of the following year;  the Activity notified the Union
 of the changes in the requirements on October 28 of the appraisal year
 involved;  the employees were informed of the changes in November;  and
 the Activity apparently implemented the new requirements on or about
 February 1 and applied them retroactively to the beginning of the
 appraisal period when the employees' performance for the period from
 October through December was evaluated at the first quarterly review of
 their performance.  The Union claimed that the requirements were
 performance standards and that under the parties' national collective
 bargaining agreement, the Activity was required to give 30 days advance
 notice of any proposed change in such standards and to provide employees
 with the performance standards for their positions before the beginning
 of the annual appraisal period.  The Union further maintained that under
 the parties' agreement and regulations, /1/ employees were entitled to
 be evaluated for the entire 12-month period under the standards in
 effect on October 1 of the appraisal year.  The Activity principally
 argued that although the requirements were used to evaluate employee
 performance, they were "numeric guidelines" and not performance
 standards;  and that the establishment of such performance requirements
 is a management right under section 7106(a)(2) of the Statute.
 
    The Arbitrator found that based on all the evidence, including the
 fact that a number of supervisors referred to the requirements in
 writing as "standards" and the fact that the requirements were used to
 evaluate employee performance, the requirements were performance
 standards.  The Arbitrator further found that under the parties'
 agreement the Activity did not have a right to unilaterally change
 performance standards during the appraisal period and that the Union had
 a right to object to and negotiate any changes prior to implementation.
 The Arbitrator essentially concluded that the Activity was required to
 notify the Union and the employees prior to the start of the annual
 appraisal period of any new performance standards and that the Activity
 violated the parties' agreement by changing the standards at issue in
 this case after the beginning of the appraisal period involved and by
 implementing and retroactively applying those new standards in that
 period.  The Arbitrator therefore sustained the grievances and, as a
 remedy, ordered the Activity to reappraise the grievants' performance
 for the entire year using the performance standards that were in effect
 at the beginning of that period.
 
                              III.  EXCEPTION
 
    As its exception, the Activity contends that the award is contrary to
 section 7106(a)(2)(A) and (B) of the Statute.  In support of its
 contention, the Activity argues:  (1) by finding that the numerical
 guidelines are performance standards, the Arbitrator improperly
 substituted his judgment for that of management since the actual
 standard management had established was a non-quantitative standard;
 (2) assuming that the guidelines are performance standards, the
 Arbitrator's award improperly requires management to negotiate on the
 content of the standards and prevents management from changing the
 standards after the start of the appraisal period when the change was
 necessary to ensure accomplishment of its mission;  and (3) the award
 improperly requires the Activity to reappraise the grievants'
 performance using performance standards of the prior appraisal year.
 
                       IV.  ANALYSIS AND CONCLUSIONS
 
                1.  "Guidelines" or "Performance Standards"
 
    Under 5 U.S.C. Section 4302(b), an agency's performance appraisal
 system must provide for the establishment of "performance standards
 which will, to the maximum extent feasible, permit the accurate
 evaluation of job performance on the basis of objective cirteria . . .
 related to the job in question for each employee or position under the
 system." The Office of Personnel Management, the agency authorized under
 5 U.S.C. Section 4302(b) to issue regulations implementing the statutory
 requirements for performance appraisal systems, defines the term
 "performance standard" in 5 CFR 430.203 as follows:
 
          "Performance standard" means a statement of the expectations or
       requirements established by management for a critical or
       non-critical element at a particular rating level.  A performance
       standard may include, but is not limited to, factors such as
       quality, quantity, timeliness, and manner of performance.
 
    Thus, under the applicable law and regulations, performance standards
 establish the level of job performance required of an employee with
 regard to the duties and responsibilities of the employee's position.
 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).
 
    In this case, the Activity clearly established a level of
 quantitative performance required for each contact representative in its
 "guidelines" for the number of pnone calls and workload reports to be
 completed each hour.  As found by the Arbitrator, the Activity
 acknowledged that it used the quantitative requirements to evaluate
 employee performance and the Activity's supervisors considered the
 requirements to be performance standards.  In these circumstances, the
 Authority therefore concludes that the "guidelines" meet the definition
 of "performance standards" and that the Activity has failed to establish
 that the Arbitrator's award finding that the guidelines were in fact
 performance standards is in any way deficient.  Bureau of Prisons,
 Department of Justice and American Federation of Government Employees,
 Local 148, 21 FLRA No. 15 (1986) (where the agency defined the standard
 for "outstanding" performance in a regulation).
 
            2.  Establishing and changing performance standards
 
    The Authority has repeatedly held that an arbitration award may not
 interpret or enforce a collective bargaining agreement so as to
 improperly deny an agency the authority to exercise its rights under
 section 7106(a) of the Statute.  National Treasury Employees Union and
 U.S. Customs Service, 17 FLRA 38 (1985).  With regard to performance
 standards, the Authority has held that proposals that would require
 negotiations concerning the establishment or content of standards
 interfere with management's rights to direct employees and to assign
 work under section 7106(a)(2)(A) and (B) of the Statute and, therefore,
 such proposals are nonnegotiable.  Bureau of Public Debt, 3 FLRA 769-81;
  American Federation of Government Employees, AFL-CIO, Local 32 and
 Office of Personnel Management, Washington, D.C., 3 FLRA 784, 787-89
 (1980).  Thus, it is clear that the establishment and determination of
 the content of performance standards constitute an exercise of rights
 reserved to management under section 7106(a).  Additionally, the
 Authority has held that a decision to revise performance standards is a
 right reserved to management under section 7106(a) of the Statute.
 Department of the Air Force, Air Force Logistics Command, Wright
 Patterson Air Force Base, Ohio, and Newark Air Force Station, Newark,
 Ohio and American Federation of Government Employees, Local 2221,
 AFL-CIO, 21 FLRA No. 78, slip op. at 2 (1986).  /2/ Moreover, with
 regard to the authority of an arbitrator in resolving grievances
 concerning performance appraisals, the Authority has specifically held
 that an arbitrator may not substitute his or her judgment for that of
 the agency as to the appropriateness of critical elements or performance
 standards established for a position.  Bureau of Prisons, 21 FLRA No.
 15, slip op. at 4, 6.
 
    In this case, the Authority finds that the Arbitrator's award is
 deficient as contrary to section 7106(a)(2)(A) and (B) in two respects.
 First, to the extent that the award may be construed as requiring the
 Activity to negotiate concerning the establishment or content of any
 performance standard the award is contrary to section 7106(a)(2)(A) and
 (B).  Second, to the extent the award may be construed as improperly
 denying the authority of the Activity to exercise its rights to revise
 the grievants' performance standards and to prospectively evaluate their
 performance under the changed standards during the designated appraisal
 period the award is also contrary to section 7106(a)(2)(A) and (B).
 
    However, to the extent that the award prohibits retroactive
 application of the new standards to the period before the requirements
 were implemented and the employees were made aware that their
 performance was going to be measured against the new requirements, the
 award is not deficient.  In that regard, the U.S. Court of Appeals for
 the Federal Circuit recently held that agency changes in performance
 standards during the course of a designated annual appraisal period and
 evaluations of employees under the new standards are not prohibited by 5
 U.S.C. Section 4302(b)(2) /3/ provided that the substantive rights of
 employees are preserved.  Weirauch v. Department of the Army, No.
 85-2290 (Fed. Cir. Jan. 30, 1986).  In its decision in that case, the
 court rejected the employee's two arguments:  (1) that since 5 U.S.C.
 Section 4302(b)(2) required the agency to communicate the elements and
 standards of his position to him before the start of the annual
 appraisal period, he was therefore entitled to be evaluated for the full
 year under the elements and standards that were in effect at the
 beginning of the period, and (2) that the agency had violated section
 4302(b)(2) by changing his standards and evaluating his performance
 under the changed standards during the annual appraisal period.  The
 court found, in agreement with the Merit Systems Protection Board's
 interpretation of section 4302(b)(2), for example, Cross v. Department
 of the Air Force, 84 FMSR 6093 (1984), which interpretation the court
 also found was in accord with that of the Office of Personnel Management
 and was supported by the legislative history of the provision, that the
 substantive rights of employees in the appraisal situation described
 were not tied to the officially-designated annual appraisal period of
 the agency.  The court agreed with MSPB that there was no statutory
 restriction on the number or frequency of evaluations of employees
 within the appraisal period fixed by the agency in its master appraisal
 system.  The court determined that where an agency has a yearly
 appraisal period, the evaluation of individual employees properly may
 involve more than one standard if the standard has been changed,
 provided that the substantive rights of the employees are preserved,
 namely:  to be made aware of the critical elements and standards by
 which their performance is to be appraised before being evaluated, and
 to be evaluated under those elements and standards after a period of
 time long enough to afford them an ample opportunity to improve.
 
    In the facts of this case, as determined by the Arbitrator, it
 appears that the requirements were not implemented until on or about
 February 1 of the annual appraisal period and that the employees were
 not made fully aware that their performance was being evaluated under
 the new standards until the time of their first quarterly performance
 review.  In these circumstances, the Authority concludes that to the
 extent that the Arbitrator's award prohibits the retroactive application
 of the new performance requirements to the period before February 1, the
 award is not deficient as alleged.
 
                     3.  Reappraisal of the grievants
 
    The Authority has previously held that in resolving a grievance
 concerning a performance appraisal, an arbitrator may properly direct
 that an aggrieved employee's performance be reappraised in certain
 circumstances.  Where the arbitrator determines that management failed
 to apply its established standards to the aggrieved employee or applied
 those standards to the employee in violation of law, regulation or an
 appropriate general, nonquantitative requirement the parties may have
 agreed upon, the arbitrator to that extent may sustain the grievance.
 In such circumstances, the arbitrator, as a remedy, may direct that the
 grievant's performance be reevaluated by management utilizing the
 performance standards it had established and/or that the grievant's
 performance be reevaluated in accordance with law, regulation or the
 approprate general, nonquantitative requirement in the parties'
 agreement.  Bureau of Prisons, at 5-6.
 
    In the circumstances of this case, where the Arbitrator directed the
 Activity to reappraise the grievants' performance, the Authority finds
 that for the period from October 1 through January 31, the Arbitrator's
 remedy is not contrary to section 7106(a)(2)(A) and (B) of the Statute
 as alleged.  Specifically, where the employees were entitled to be made
 aware of their performance standards before being evaluated and where
 the requirements apparently were implemented on or about February 1, and
 the employees were not made fully aware by the Activity that they were
 being evaluated under the new requirements until the first quarterly
 performance review, the Authority concludes that the Activity was
 properly directed to reappraise the grievants' performance for the
 period from October 1 through January 31 under the established standards
 that were in effect on October 1.
 
                               V.  DECISION
 
    Accordingly, for the above reasons, the remedy awarded by the
 Arbitrator is modified to direct the Activity to reappraise the
 grievants' performance for the period from October 1 through January 31
 of the designated appraisal period under the standards that were in
 effect on October 1, to reappraise their performance for the period from
 February 1 to September 30 of that appraisal period under the standards
 that were implemented on or about February 1, and to grant the grievants
 the appropriate annual performance rating for the entire period.
 
    Issued, Washington, D.C., May 29, 1986.
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier III, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
                ---------------  FOOTNOTES$ ---------------
 
 
 
    (1) The union cited 5 CFR part 430, subpart B, which at the time
 pertinently provided:
 
          5 U.S.C. 4302(a) and (b) require that each appraisal system
       shall provide for establishing performance standards based on the
       requirements of employee's positions, communicating the standards
       of performance and the critical elements of the position at the
       beginning of each appraisal period, and appraising employees based
       on a comparison of performance with the standards established for
       the appraisal period.
 
    (2) In its decision in 21 FLRA No. 78, the Auth