25:0384(29)NG - POPA and Patent and Trademark Office, Commerce -- 1987 FLRAdec NG



[ v25 p384 ]
25:0384(29)NG
The decision of the Authority follows:


 25 FLRA No. 29
 
 PATENT OFFICE PROFESSIONAL 
 ASSOCIATION
 Union
 
 and
 
 PATENT AND TRADEMARK 
 OFFICE, DEPARTMENT OF COMMERCE
 Agency
 
                                            Case Nos. 0-NG-589 
                                                      0-NG-594
 
                DECISION AND ORDER ON NEGOTIABILITY ISSUES
 
                        I.  Statement of the Cases
 
    These cases are before the Authority because of negotiability appeals
 filed under section 7105(a)(2)(E) of the Federal Service
 Labor-Management Relations Statute.  Since both cases involve the same
 parties, arise out of the same negotiations and present similar issues
 concerning the negotiability of aspects of the Agency's performance
 appraisal system, we have consolidated them for decision.  The issue
 before us is the negotiability of thirty-three Union proposals set forth
 in Appendix A.  /1/
 
                       II.  Positions of the Parties
 
    The Agency contends generally that the Union's proposals directly
 interfere with management's rights to direct employees and assign work
 under section 7106(a)(2)(A) and (b) of the Statute.  /2/ The Union
 contends generally that its proposals are negotiable as procedures under
 section 7106(b)(2) and, in some instances, as appropriate arrangements
 under section 7106(b)(3) of the Statute.
 
                      III.  Analysis and Conclusions
 
                              A.  Background
 
    To place our consideration of the proposals in this case in context,
 we will begin with a general review of the law governing the
 negotiability of matters pertaining to performance appraisal systems.
 As the Tight Circuit recently noted in American Federation of Government
 Employees, Local 3748 v. FLRA, 797 F. 2d 612 (8th Cir. 1986), affirming
 American Federation of Government Employees, Local 3748, AFL-CIO and
 Agricultural Research Service, Northern States Area, 20 FLRA No. 55
 (1985), "(t)he Authority has consistently drawn a line between language
 concerning the application of performance standards and language
 concerning the content of performance standards.  The Authority has
 established that language concerning application is negotiable and that
 language concerning content is outside management's duty to bargain."
 (Footnotes omitted.) Id. at 615.
 
    This distinction was set forth in the first two Authority decisions
 to address the negotiability of performance appraisal systems, National
 Treasury Employees Union and Department of the Treasury, Bureau of the
 Public Debt, 3 FLRA 769 (1980) ("Bureau of the Public Debt"), affirmed
 sub nom. National Treasury Employees Union v. FLRA, 691 F. 2d 553 (D.C.
 Cir. 1981) and American Federation of Government Employees, AFL-CIO,
 Local 32 and Office of Personnel Management, Washington, D.C., 3 FLRA
 784 (1980) ("Office of Personnel Management").  In Bureau of the Public
 Debt, the Authority determined that management's rights to direct
 employees and assign work under section 7106(a)(2)(A) and (B) of the
 Statute include the right to establish performance standards and
 identify critical elements.  In particular, management has the right to
 determine the quantity, quality, and timeliness of employees' work
 products and to establish employees' work priorities.  In upholding the
 Authority's decision in Bureau of the Public Debt, the District of
 Columbia Circuit described these determinations as being "at the very
 core of the successful management of . . . the public service operations
 of a federal agency." NTEU v. FLRA, 691 F 2d at 563.  The proposal at
 issue in Bureau of the Public Debt prescribed a specific quantitative
 work requirement:  processing 9 batches an hour.
 
    Based on the rationale of Bureau of the Public Debt, the Authority
 subsequently found nonnegotiable proposals which determined the quality
 of work which management would require of employees (see, for example,
 American Federation of Government Employees, Local 1760, AFL-CIO and
 Department of Health and Human Services, Social Security Administration,
 15 FLRA 909 (1984) (Union Proposals 1-6)) and the timeliness of employee
 work (see, for example, National Federation of Federal Employees,
 Council of Consolidated SSA Locals and Department of Health and Human
 Services, Social Security Administration, 17 FLRA 657 (1985) (Union
 Proposal 2), rev'd as to other matters sub nom. Department of Health and
 Human Services, Social Security Administration v. FLRA, 791 F. 2d 324
 (4th Cir. 1986)).
 
    Moreover, it is not necessary that a proposal prescribe a specific
 work requirement as in Bureau of the Public Debt in order to be found
 nonnegotiable.  General criteria governing the determination of the
 content of a performance standard or a critical element are similarly
 nonnegotiable.  See American Federation of Government Employees,
 AFL-CIO, Local 1603 and U.S. Naval Hospital, Patuxent River, Maryland,
 22 FLRA No. 60 (1986);  American Federation of Government Employees,
 AFL-CIO, Local 32 and Office of Personnel Management, 17 FLRA 790 (1985)
 (Union Proposal 3).  As the Ninth Circuit stated, in affirming an
 Authority decision which found such criteria nonnegotiable:
 
          Although the Union is correct in observing that none of these
       proposals dictates the precise content or contours of a critical
       element or a performance standard, they nevertheless restrict
       agency discretion by mandating some substantive criteria for the
       establishment of critical elements (or . . . performance
       standards) . . . . (A) given critical element or performance
       standard may be the sum of a number of discrete criteria, and . .
       . the statute reserves for management not simply specification of
       the whole, but also determination of its constituent parts.  Nor
       is the reasonableness of these proposals the issue;  to specify
       any criterion, however reasonable, is to invade management's
       exclusive statutory preserve.  (Emphasis in original;  footnote
       omitted.)
 
    National Treasury Employees Union v. FLRA, 767 F. 2d 1315, 1317 (9th
 Cir. 1985), affirming National Treasury Employees Union and Department
 of Health and Human Services, Region 10, 13 FLRA 732 (1983)
 (Supplemental Decision on Remand).  See also AFGE, Local 3748 v. FLRA,
 797 F. 2d at 617-618.
 
    As the Authority has consistently held, enforcement of a general,
 substantive criterion would permit arbitrators to substitute their
 judgments as to the performance standards or critical elements which
 management should adopt.  American Federation of Government Employees,
 AFL-CIO, Local 1968 and Department of Transportation, Saint Lawrence
 Seaway Development Corporation, Massena, New York, 5 FLRA 70, 77-82
 (1981) ("Saint Lawrence Seaway") (Union Proposal 4), affirmed sub nom.
 American Federation of Government Employees, Local 1968 v. FLRA, 691 F.
 2d 565, 572 (D.C. Cir. 1982), cert. denied, 461 U.S. 926 (1983).  It is
 impermissible, therefore, for an arbitrator to review performance
 standards and critical elements under a substantive criterion.  On the
 other hand, an arbitrator may review management's application of its
 already established standards and elements, to an employee in a
 performance appraisal.  See Office of Personnel Management, 3 FLRA at
 789-93;  Saint Lawrence Seaway, 5 FLRA at 80-81.  See also NTEU v. FLRA,
 767 F. 2d at 1318 (9th Cir. 1985) wherein the court characterized the
 Authority's decision in Office of Personnel Management as permitting
 "purely procedural review of management's application of its own
 critical elements." (Emphasis in original.)
 
    The proposals in this case concern various aspects of the Agency's
 performance appraisal system.  Based on the foregoing, our task in
 assessing the negotiability of these proposals is primarily one of
 determining, based on the record, whether they concern substantive
 matters, such as the content of performance standards and critical
 elements, or whether they concern the application of those standards and
 elements and other nonsubstantive matters such as procedures.
 
                B.  Proposal Concerning Definition of Terms
 
    Section 1.F
 
    Section 1.F defines the phrase "quality of patent examining" for
 purposes of the Agency's performance appraisal system in terms of the
 patentability of allowed claims.  That is, in appraising the quality of
 a patent examiner's performance, the Agency would evaluate whether an
 examiner's determination that a given claim is patentable meets legal
 and regulatory requirements upon substantive, higher-level review.  The
 proposal would require management to establish standards for evaluating
 the quality of employee performance which measure the patentability of
 all claims allowed by an examiner.  Conversely, the proposal would
 preclude management from evaluating any other qualitative aspect of
 employee performance, since those aspects of performance would fall
 outside the definition.  The effect of the proposal, therefore, is to
 determine the content of the qualitative performance standards
 established by management.  Under the principle established in Bureau of
 the Public Debt, Section 1.F. directly interferes with management's
 right to direct employees and assign work and is outside the Agency's
 duty to bargain.  See also, Bureau of Prisons, Department of Justice and
 American Federation of Government Employees, Local 148, 21 FLRA No. 15
 (1986), slip op. at 3-7.
 
        C.  Proposals Concerning the Development and Implementation
 
                of Performance Standards
 
    1.  Sections 3.E. and 3.F.
 
    In general, Sections 3.E. and 3.F. provide criteria governing the
 establishment of performance standards and rating levels.  Section 3.E.
 requires management, within a given job classification, to establish the
 same performance standards and rating levels for employees performing
 the same job functions.  It also requires that where employees within a
 job classification are performing similar job functions, any differences
 in performance standards and rating levels shall be reasonably based on
 differences in job functions.  Section 3.F. likewise requires that where
 employees in different job classifications are performing similar job
 functions, the performance standards and rating levels for those
 employees shall be comparable and any differences in standards and
 levels shall be reasonably based on differences in job functions.
 
    The part of Section 3.E. which requires management to establish the
 same performance standards and rating levels for employees performing
 the same job function is like the proposal found nonnegotiable in
 National Federation of Federal Employees, Local 1497 and Headquarters,
 Lowry Technical Training Center (ATC), Lowry Air Force Base, Colorado, 6
 FLRA 9 (1981).  The proposal in that case required that performance
 standards be the same for employees having the same position
 description.  Relying on Bureau of the Public Debt, the Authority held
 that the proposal in Lowry Technical Training Center directly interfered
 with management's rights because it precluded management from
 determining that the content of performance standards should be
 different for employees having the same position description where, in
 the judgment of management, such differences are warranted.
 
    The Union, however, attempts to distinguish Lowry Technical Training
 Center on the basis that Section 3.E. concerns job functions.  This is
 not a material distinction.  The decisive factor in either case is the
 restriction placed on management's exercise of its statutorily protected
 discretion by the requirement that performance standards, or rating
 levels, be the same.  Therefore, for the reasons set forth in Bureau of
 the Public Debt and Lowry Technical Training Center, this part of
 Section 3.E. is outside the Agency's duty to bargain.  /3/
 
    The criteria governing the establishment of performance standards and
 rating levels set forth in the remaining portion of Section 3.E. and
 Section 3.F. would, standing alone, have the same effect as Union
 Proposal 1 in Saint Lawrence Seaway.  They would substantively restrict
 the establishment of standards and levels and thus would directly
 interfere with management's right to direct employees and assign work.
 
    The Union argues that these Sections are negotiable because they
 would permit management to vary those standards and levels from the
 proposed criteria to the extent that management provides adequate
 written justification.  The question therefore is whether the
 requirement of adequate written justification for variances also
 directly interferes with management's right to establish performance
 standards and rating levels.
 
    The effect of this aspect of Sections 3.E. and 3.F. is to allow an
 arbitrator to evaluate whether there is adequate justification for those
 performance standards and rating levels which differ from the
 requirements of the proposed criteria and to invalidate those for which
 management does not provide such justification.  As the Union
 acknowledges, this part of the proposals is intended to provide a review
 procedure for variances from the proposed criteria and a "basis (by
 means of the term 'adequate') for negating unwarranted variances." Union
 Petition for Review at 6.  See generally id. at 6-7.  The requirement
 for "adequate written justification would have the effect of authorizing
 an arbitrator to review the reasons given by management for establishing
 its performance standards and rating levels and to preclude those which
 do not, in the arbitrator's judgment, meet that requirement.  In order
 to determine whether there is "adequate justification" for standards and
 levels alleged to vary from the proposed criteria, an arbitrator would
 be required to assess management's explanation of its operating needs
 and priorities and its determinations as to the levels of productivity
 needed to meet those needs and priorities.  Moreover, the arbitrator
 would be required to judge whether those explanations and determinations
 are sufficient to justify the standards and levels which management had
 established.  In making these determinations, an arbitrator would, in
 effect, be required to substitute his judgment as to how the Agency
 should be run for that of management.  See AFGE, Local 3748 v. FLRA, 797
 F. 2d at 617-18.
 
    The Union argues, however, that the criteria set forth in these
 proposals do not constitute a substantive limitation on management's
 rights under the Statute.  Rather, the Union contends that they
 establish a general, nonquantitative standard of review, like the "fair
 and equitable" standard of Union Proposal 5 in Office of Personnel
 Management.  The Authority specifically found in that case that the
 proposed criterion for arbitral review concerned only the application of
 performance standards to employees and did not affect management's
 discretion to determine the content of those standards.  The essence of
 the Union's argument in this case is that these proposals do concern the
 application of performance standards and rating levels, since such
 standards and levels are applied to employees, and thus become subject
 to being grieved under the proposed review criteria, as soon as they are
 put into effect at the beginning of an appraisal period.
 
    Even assuming that this contention is true, it is not dispositive.
 The dispositive consideration is not when the standards and levels are
 "applied," so as to be subject to review, but whether the proposals have
 the effect of limiting management's determination of the content of
 those standards and levels or whether they have the effect of limiting
 how those standards and levels are used in the appraisal of employees.
 The relevant distinction is between proposals, for example, which seek
 to ensure that performance standards are the same for similarly situated
 employees and proposals which require that all employees working under a
 given standard have that standard applied to them in the same way.  See
 National Treasury Employees Union and Department of the Treasury, U.S.
 Customs Service, 9 FLRA 983, 989 (1982).  Proposals of the former type,
 such as Sections 3.E. and 3.F., constitute substantive limitations on
 management's right to establish performance standards and determine
 rating levels and thus are outside the Agency's duty to bargain.
 
    2.  Section 3.G.
 
    Section 3.G. provides that an employee may not be adversely evaluated
 in the critical element of courtesy to the public unless there are at
 least three complaints against that employee which have been
 substantiated by investigation.  Management would be precluded from
 determining, for example, that two instances would be the minimum
 necessary to constitute unacceptable performance.  In effect, therefore,
 this proposal establishes the minimum standard for unacceptable
 performance in the area of courtesy.  Because it restricts management's
 discretion to determine the content of a performance standard, Section
 3.G. has the same effect, and is outside the duty to bargain for the
 same reason, as the proposal in Bureau of the Public Debt.
 
    The Union argues that Section 3.G. establishes a procedure under
 section 7106(b)(2) governing the implementation of the courtesy standard
 and does not concern the content of that standard.  It is intended,
 accoridng to the Union, to insure that management's standard -- which is
 very general and subject to differing interpretations -- is reasonably
 and accurately applied.  However, the Union fails to distinguish between
 determining what the standard is to be, for example, defining the type
 and amount of discourteous conduct which will be unacceptable, as in
 Section 3.G., and prescribing how the standard is to be used in
 evaluating employee performance, for example, providing that all
 complaints must be investigated before being used as evidence.  Compare
 National Treasury Employees Union and Internal Revenue Service, 8 FLRA
 30 (1982) (requirement to confirm statistical performance data by
 personal observation is negotiable).
 
    3.  Sections 3.H. and 3.J.
 
    Section 3.H. provides a test for determining, prior to the
 implementation of a performance appraisal plan and after every third
 year, the objectivity of the units of measurement used by management in
 those performance standards which apply to employees' written work.
 Specifically, the proposal establishes a process whereby a random sample
 of employees' written work is reviewed by supervisory personnel and the
 results of the review are checked to determine whether application of
 the units of measurement produced uniform appraisal ratings.  The
 disputed portions of the proposal are those which require a specific
 degree of uniformity (90%) in appraisal results in order to verify the
 objectivity of the units of measurement, and those which require
 management, where results are not uniform, to develop new units of
 measurement that will meet the test or modify the existing units until
 they do so.  In short, Section 3.H. has the effect of preventing
 management from using in its performance standards units of measurement
 which do not meet these requirements.
 
    The first paragraph of Section 3.J prescribes a process for
 determining whether the Agency's performance standards permit the
 accurate evaluation of employee performance to the maximum extent
 feasible, as required by 5 U.S.C. Section 4302(b)(1).  /4/ Specifically,
 where the Union suggests a performance standard which is both feasible
 and more accurate than the standard established by management, the
 proposal requires management either to adopt that suggested by the Union
 or to develop one which is at least as accurate.  Disputes as to
 accuracy and feasibility may be submitted to an arbitrator, who would
 retain jurisdiction until the standard established by management permits
 accurate evaluation of employee performance at least to the same extent
 as that proposed by the Union.  In any case, a performance standard
 which does not meet that requirement, as interpreted by an arbitrator,
 may not be applied in the evaluation of employee performance.
 
    The second paragraph of Section 3.J. lists specific factors which, if
 included in a performance standard, would prevent that standard from
 permitting accurate evaluations as required by 5 U.S.C. Section 4302.
 The significance of these factors in terms of the establishment of
 performance standards is explained in connection with the procedure
 outlined in the first paragraph of Section 3.J.  Whenever the Union
 develops a standard which excludes the cited factor, that standard
 would, by definition, under the second paragraph, permit more accurate
 evaluation of employee performance than a management standard which did
 not exclude them.  Consistent with the terms of the procedure,
 therefore, management would be required to modify its standards, since
 those standards would not be in compliance with law.
 
    The Union essentially argues that Sections 3.H and 3.J. merely
 implement the requirements of 5 U.S.C. Section 4302(b)(1).  It cannot be
 assumed, however, that in every instance 5 U.S.C. Section 4302 would
 invalidate performance standards which failed to produce 90% uniformity
 in appraisal results or have failed to make allowances for the
 prescribed factors.  Whether less than 90% uniformity in appraisal
 results, or failing to take those factors into account, would make it
 less feasible for performance standards to permit objective and accurate
 evaluations of employee performance would depend on the facts of an
 individual case and could not be determined beforehand.  Under
 appropriate circumstances, performance standards might be established by
 management which do not achieve 90% uniformity in appraisal results or
 do not make allowances for the factors set forth in Section 3.J. but
 which nevertheless permit objective and accurate evaluation of employee
 performance to the maximum extent feasible.
 
    The Merit Systems Protection Board, with the concurrence of the
 courts, has held that the requirements of 5 U.S.C. Section 4302 were
 intended by Congress to provide agencies with a measure of flexibility
 in establishing performance standards.  Wilson v. Department of Health
 and Human Services, 770 F. 2d 1048, 1052 (Fed. Cir. 1985).  Those
 requirements were not intended to produce rigid, mechanical standards
 which attempt to absolutely eliminate any subjective judgment.  Id.; De
 Pauw v. U.S. International Trade Commission, 782 F. 2d 1564, 1566 (Fed.
 Cir. 1986);  Adkins v. Department of Housing and Urban Development, 781
 F. 2d 891, 896 (Fed. Cir. 1986).  In our view, consistent with the
 foregoing, Section 3.H. and Section 2.J. require a precision in the
 formulation of performance standards beyond that which is mandated in 5
 U.S.C. Section 4302.  That is, these proposals do not merely embody or
 implement the requirements of law.  To the extent that they do not,
 these proposals would constitute separate, additional contractual
 limitations on the establishment of performance standards.  They would
 thus preclude management from establishing performance standards which
 it would legally be entitled to establish, that is, standards which
 though failing to produce 90% uniformity of appraisal results, as
 required by Section 3.H., or to make allowance for the factors specified
 in Section 3.J., are nevertheless consistent with law.  In thus
 prescribing separate, additional contractual criteria which restrict the
 establishment of performance standards, Sections 3.H. and 3.J. directly
 interfere with management's rights and are outside the Agency's duty to
 bargain.  /5/ See American Federation of Government Employees, AFL-CIO,
 Local 1603 and U.S. Naval Hospital, Patuxent River, Maryland, 22 FLRA
 No.60 (1986).
 
    Moreover, we agree with the Agency that arbitrators, for example, in
 enforcing the provisions of the second paragraph of Section 3.J. through
 the process outlined in the first paragraph of that proposal, would of
 necessity be substituting their judgment as to the feasibility of a
 performance standard for that of management.  For the reasons stated
 above, arbitrators functioning under the first paragraph of Section 3.J.
 would not simply be determining whether a performance standard complied
 with law.  Contrary to the Union, therefore, we are not dealing with
 proposals that are distinguishable from Saint Lawrence Seaway.  That is,
 we are not presented with a proposal which simply requires that
 performance standards be established "in accordance with law" as provied
 in section 7106(a)(2).  Rather, the proposals here present precisely the
 circumstances covered by Saint Lawrence Seaway and subsequent cases,
 namely, they provide a contractual standard which authorized arbitral
 review of the content of performance standards.  See Social Security
 Administration, Office of Hearings and Appeals, Region II and American
 Federation of Government Employees, Local 1760, 21 FLRA No. 86 (1986);
 Bureau of Engineering and Printing, U.S. Department of the Treasury and
 Washington Plate Printers Union, Local No. 2, IPDEU, AFL-CIO, 20 FLRA
 No. 39 (1985).
 
    4.  Section 3.K.
 
    Based on the record in this case, we find that Section 3.K.
 prescribes criteria for the establishment of performance standards and
 rating levels rather than, as the Union contends, a general
 nonquantitative standard of review for the application of those
 standards and levels.  Examination of the various subsections of the
 proposal, which purport to define what is "fair, equitable, and
 reasonable" within the meaning of the proposal, indicates that each one
 restricts the establishment of rating levels.  In particular, subsection
 1 provides that any rating level for the granting of a within grade
 increase which cannot be met by more than 5 percent of a statistically
 normal population of employees is not "fair, equitable, and reasonable."
 Subsection 2 precludes management from establishing any level based on
 an average of employees' past performance which does not make allowances
 for "reasonable deviation" from the average.  Subsection 3 precludes
 management from establishing any rating level which is based primarily
 on the amount of work employees are physically able to perform without
 taking into account the negative effects on employee morale of such a
 level.  By dictating what a rating level must be in order to be "fair,
 equitable and reasonable," Section 3.K. has the same effect as Union
 Proposal 3 in American Federation of Government Employees, AFL-CIO,
 Local 32 and Office of Personnel Management, 17 FLRA 790, 792 (1985).
 In that case, the Authority held that a proposal which required
 performance standards themselves to be "fair, equitable and reasonable"
 directly interfered with management's right to direct employees and
 assign work.  Because Section 3.K. similarly would restrict management's
 determination of the content of rating levels, it is nonnegotiable under
 section 7106(a)(2)(A) and (B).
 
    The effect of those subsections as restrictions on management rights
 demonstrates that the proposal establishes substantive criteria
 governing the determination of rating levels and performance standards,
 rather than a criterion governing review of the manner in which those
 levels and standards are used to evaluate employees.  The Union's
 attempt to distinguish this proposal from the Authority's decision in
 Bureau of the Public Debt by bringing it within the holding in American
 Federation of Government Employees, AFL-CIO, Local 3804 and Federal
 Deposit Insurance Corporation, Chicago Region, Illinois, 7 FLRA 217
 (1982) (Union Proposal 2) is therefore without support.  The operative
 effect of Section 3.K., like that of the proposal in Bureau of the
 Public Debt, is to restrict management's decision as to the contend of
 performance standards and rating levels, rather than, as was the case in
 Office of Personnel Management and Federal Deposit Insurance
 Corporation, to provide a basis for review of management's
 implementation of those standards and levels.
 
    We turn now to the question of whether Section 3.K., in spite of the
 fact that it interferes with management's rights, is nevertheless
 negotiable as an appropriate arrangement for employees adversely
 affected by the exercise of those rights within the meaning of section
 7106(b)(3).  The threshold question is whether the proposal is an
 "arrangement" for adversely affected employees.  See National
 Association of Government Employees, Local R14-87 and Kansas Army
 National Guard, 21 FLRA No. 4 (1986).  In our view, because Section 3.K.
 concerns management's determination of the content of performance
 standards it does not concern such an "arrangement" because the
 establishment of performance standards does not by itself adversely
 affect employees.  See Department of Health and Human Services, Social
 Security Administration v. FLRA, 791 F.2d 324 (4th Cir. 1986), reversing
 National Federation of Federal Employees, Council of Consolidated SSA
 Locals and Department of Health and Human Services, Social Security
 Administration, 17 FLRA 657 (1985).  To paraphrase the Court, employees
 are not adversely affected because the requirements of their jobs are
 changed.  Any adverse effect will come when an action is taken against
 an employee based upon the appliction of those job requirements to that
 employee.  Accord Alford v. Department of Health, Education and Welfare,
 1 MSPB 305 (1980) (employees may not appeal from the Agency's
 development of performance standards for their positions, but only from
 actions taken against them on the basis of those standards).  We need
 not determine, therefore, whether Section 3.K. is an "appropriate"
 arrangement since it does not qualify for consideration under section
 7106(b)(3).  Thus, for the reasons stated above, Section 3.K. is outside
 the Agency's duty to bargain.
 
        D.  Proposals Concerning the Development and Implementation
 
                of Timeliness Standards
 
    1.  Section 4.A.
 
    The first sentence of Section 4.A. requires management to take into
 account in its timeliness standards the fact that employees must make
 decisions as to the priorities to be given the differing requirements of
 their work assignments.  The second sentence concerns situations in
 which employees are working under timeliness standards that have been
 defined -- in accordance with the first sentence -- to take into account
 the fact that employees must set their own priorities.  This part of the
 proposal provides that where employees encounter conflicts between
 timeliness goals and other goals they should give priority to
 qualitative work requirements over quantitative work requirements unless
 management has explicity set different priorities.  /6/
 
    By requiring management to make allowance in its timeliness standards
 for the fact that employees must make decisions among conflicting work
 requirements, the first sentence of Section 4.A. has an effect similar
 to a portion of the proposal at issue in International Federation of
 Professional and Technical Engineers, Local 25 and Department of the
 Navy, Mare Island Naval Shipyard, 13 FLRA 433, 437-438 (1983).  The
 final disputed sentence of that proposal required critical elements and
 performance standards to recognize that professional work is such that
 it cannot be standardized in relation to a given period of time.  The
 Authority found that proposal to be nonnegotiable because it interfered
 with management's rights.  Though that proposal specifically precluded
 the establishment of quantitative elements and standards for
 professional employees, that fact does not distinguish the Mare Island
 decision from this case, where the restriction is more general.  In
 either instance, the effect of the proposal is to restrict management's
 right to determine the content of performance standards.  The degree of
 specificity of the restriction is not dispositive.  See our discussion
 at section III. A. of this decision.  For the reasons set forth in Mare
 Island, therefore, the first sentence of Section 4.A., by requiring that
 timeliness standards make allowance for employees' need to determine
 their own work priorities, directly interferes with management's right
 and is outside the Agency's duty to bargain.  Compare American
 Federation of Government Employees, AFL-CIO, General Committee of AFGE
 for SSA Locals and Social Security Administration, 23 FLRA No. 43 (1986)
 (Union Proposal 4) (proposal providng that errors involving judgmental
 issues will be for information purposes only does not interfere with
 management's right to determine content of performance standards).
 Contrary to the Union's argument, moreover, because the first sentence
 of Section 4.A. explicitly concerns the determination of the content of
 management's timeliness standards, it cannot be found to be a negotiable
 standard of review for the application of those standards to employees.
 
    Finally, since the first sentence of section 4.A. is nonnegotiable
 and the Union did not request a separate ruling on the second sentence
 of that proposal, we will not consider the second sentence further here.
  See American Federation of Government Employees, AFL-CIO, Local 1940
 and Department of Agriculture, Plum Island Disease Center, 16 FLRA 816,
 n. 2 (1984).
 
    2.  Section 4.C.
 
    Under the terms of Section 4.C., evidence that at least 95% of the
 employees working under a given timeliness standard in the preceding
 fiscal year did not meet the standard would establish that the standard
 is prima facie unreasonable and, absent the requisite justification,
 would preclude management from putting the standard into effect.  In
 essence, therefore, the proposal establishes a criterion of
 reasonableness for all timeliness standards, provides a test for
 determining whether such standards meet the criterion, and, ultimately,
 conditions management's ability to put those standards into effect on
 the sufficiency of the justification offered for them.
 
    Section 4.C. therefore has the same effect on management's right to
 establish performance standards as Sections 3.E., 3.F., and 3.K.
 considered above.  As with those sections, management may, in the final
 analysis, avoid the restrictions imposed on the establishment of
 performance standards by the criterion and test contained in the
 proposal if it provides a sufficient justification for the standards
 which do not meet those requirements.  However, as indicated in
 connection with the disposition of those sections, the requirement that
 management provide some justification for the performance standards
 which it has established, rather than preserving management's right to
 determine the content of those standards, is only a further restriction
 of management's rights.  Thus, for the reasons more fully set forth in
 connection with Sections 3.E., 3.F. and 3.K., Section 4.C. is outside
 the duty to bargain.  See American Federation of Government Employees,
 Local 3748, AFL-CIO and Agricultural Research Service, Northern States
 Area and American Federation of Government Employees, AFL-CIO, Local
 3365 and Department of Agriculture, Forest Service, Black Hills National
 Forest, 20 FLRA No. 55 (1985), affirmed sub nom. American Federation of
 Government Employees, Local 3748 v. FLRA, 797 F.2d 612 (8th Cir. 1986).
 
    Moreover, contrary to the Union, Section 4.C. does not provide a
 general, nonquantitative standard of review governing the application of
 performance standards to employees.  As the Union states, the purpose of
 this proposal is to provide a "a baseline for judging the reasonableness
 of a timeliness standard." Union Response to Agency Statement of
 Position at 16.  As discussed more fully in connection with Sections
 3.E., 3.F. and 3.K. above, Section 4.C. is concerned with the content of
 the performance standard itself and not with the manner in which it is
 used to evaluate employee performance.  For the reasons set forth in
 connection with those Sections, therefore, Section 4.D. is
 distinguishable from the proposals found negotiable in Office of
 Personnel Management and American Federation of Government Employees,
 AFL-CIO, Local 3804 and Federal Deposit Insurance Corporation, Chicago
 Region, Illinois, 7 FLRA 217 (1981) (Union Proposal 2).
 
    3.  Section 4.D.
 
    Section 4.D. provides that timeliness standards should be stated in
 terms of working days on which an employee is present at work (that is,
 as opposed to calendar days alone).  The proposal thus concerns the
 manner in which time spent performing a given element of a job is to be
 counted under the timeliness standard for that element and has the same
 effect as Union Proposals 1-5 in National Treasury Employees Union and
 Department of the Treasury, Internal Revenue Service, 7 FLRA 235 (1981),
 relating to the manner in which management would count specific items of
 work in evaluating the quantitative aspects of employee performance.
 The Authority held that those proposals constituted negotiable
 procedures under section 7106 (b)(2) of the Statute.  For the reasons
 more fully set forth in the Internal Revenue Service decision,
 therefore, Section 4.D. likewise establishes a negotiable procedure
 under the Statute and is within the Agency's duty to bargain.
 
    4.  Section 4.E.
 
    Section 4.E. concerns situations in which employees are required
 simultaneously to meet timeliness standards for different aspects of
 their jobs and, without being able to devote all their available work
 time to any one aspect, must make decisions regarding the allocation of
 their efforts.  The proposal addresses such situations by permitting
 employees to determine the timeliness standards which will apply in
 their individual cases and by imposing on management an obligation to
 act affirmatively to set different standards.  In essence, the proposal
 prevents management from enforcing the standards which it previously
 established and requires that the substantive requirements of those
 standards be changed.  Moreover, the proposal would permit arbitrators
 to limit the timeliness standards established by management by
 subjecting those standards to review as to whether they conflict and
 thus whether management should have permitted them to stand as
 substantive performance requirements without modification.  For these
 reasons, we find that Section 4.E. directly interferes with management's
 right to determine the content of performance standards and is outside
 the Agency's duty to bargain.  See National Treasury Employees Union and
 Department of Health and Human Services, Region 10, 13 FLRA 732 (1983)
 (Supplemental Decision on Remand), affirmed sub nom. National Treasury
 Employees Union v. FLRA, 767 F.2d 1315 (9th Cir. 1985).
 
    In our view, Section 4.E. is distinguishable from Union Proposal 4 in
 American Federation of Government Employees, AFL-CIO, General Committee
 of AFGE for SSA Locals and Social Security Administration, 23 FLRA No.
 43 (1986).  In that case, the proposal concerned employee choices of
 actions previously authorized by management.  Thus, unlike Section 4.E.,
 employees under that proposal would not be permitted to establish their
 own requirements nor would management be obligated to modify its
 requirements.  The proposal in that case, therefore, did not concern the
 content of performance standards, as does Section 4.E.
 
    Finally, because Section 4.E. concerns the content of performance
 standards, it does not constitute an "arrangement" for employees
 adversely affected by the exercise of management's rights within the
 meaning of section 7106(b)(3).  See the discussion of Section 3.K.
 above.
 
    5.  Section 4.F.
 
    Section 4.F. requires management to draft either timeliness standards
 or productivity standards so as to take into account conflicts which may
 develop between the requirements of those standards.  The proposal is
 intended to insure that management officials consider "the flexibility
 of employees to be efficient when . . . exercising their authority to
 establish performance standards." Union Response to Agency Statement of
 Position at 18.  Section 4.F., therefore, is designed to affect
 management's decision as to the content of its timeliness or
 productivity standards.  That is Section 4.F. would deal with the
 problem of possible conflicts in employee work requirements by requiring
 management to take that fact into account in establishing the content of
 the performance standards themselves.  Because it would in this way
 affect the establishment of performance standards, Section 4.F. directly
 interferes with management's rights and is outside the Agency's duty to
 bargain.
 
    6.  Section 4.G.
 
    Section 4.G. is concerned with the effect on the evaluation of
 employee performance of the establishment of a particular performance
 standard, in this instance, a possible standard of "production
 constancy" for professional employees.  Based on the record, such a
 standard would be designed to measure the consistency with which
 employees perform a given job function.  The intent of the proposal is
 to require management, when evaluating employees under the standard, to
 take into account all the other job functions which are assigned to
 those employees and to make allowances for the amount of time which such
 additional functions take away from the time they are able to devote to
 achieving "production constancy."
 
    Section 4.G. therefore does not concern and would not restrict
 management's decision as to what it will require with respect to
 "production constancy," but rather is addressed to the the manner in
 which the requirements management does impose are applied to employees
 in evaluating them under the standard.  The proposal attempts to
 mitigate the effects of any possible rigid application of such a
 standard to circumstances in which employees must meet a variety of
 work-related responsibilities, over many of which, as the Union
 maintains, employees themselves have no control, by requiring management
 to make allowances for those circumstances in its appraisal of
 employees' work under the standard.  Like Union Proposal 2 in Federal
 Deposit Insurance Corporation, Chicago Region, 7 FLRA at 223-25, Section
 4.G. would apply only in the context of the application to an employee
 of performance standards established by management.  Like that proposal,
 Section 4.G. constitutes a more specific statement of the "fair and
 equitable" criterion to be utilized in the review of management's
 application of its performance standards to an employee.  For the
 reasons set forth in Federal Deposit Insurance Corporation, Chicago
 Region, Section 4.G. does not directly interfere with management's right
 to establish performance standards and is within the Agency's duty to
 bargain.
 
    7.  Sections 4.H. and 4.I.
 
    Sections 4.H. and 4.I. specify circumstances under which examiner and
 non-examiner unit employees, respectively, will not be adversely
 evaluated for failure to meet timeliness standards.  In essence, these
 proposals require management to make allowances in its evaluations of
 employees so as to not to rate them adversely on the performance of work
 which, for the reasons stated, it is not possible to perform or which
 would require more time to perform than is actually available under the
 standard.  These proposals do not concern the content of the timeliness
 standards under which employees perform their work, therefore, but
 rather the application of such standards to the differing work
 situations of those employees.  These proposals, like Section 4.G.,
 establish criteria whereby the application of timeliness standards to an
 employee may be reviewed in a grievance.  For the reasons set forth in
 the discussion of Section 4.G., Sections 4.H. and 4.I. likewise are
 within the Agency's duty to bargain.  Moreover, because these proposals
 do not interfere with management's rights, we need not decide whether
 they constitute "appropriate arrangements" under section 7106(b)(3).
 
    We also note that Section 4.H. is identical to a portion of the
 Agency's performance appraisal system for patent examiners under Element
 II, "Docket Management." Other Union proposals at issue in this case,
 for example, Sections 6.B., 7.B., and 9.B., are also identical to
 portions of the Agency's performance appraisal system under Element I,
 "Patent Examining." Exhibit D attached to Agency's Statement of Postion.
  If a particular matter is otherwise negotiable, the fact that the
 matter is a part of an Agency's appraisal system will not in and of
 itself render it nonnegotiable.  On the other hand, if a particular
 subject matter contained in an Agency's performance appraisal system
 constitutes an exercise of management's rights under section 7106(a) of
 the Statute, the parties cannot bargain about including that portion of
 the system in a collective bargaining agreement since management would
 be bound by that provision for the life of the contract and would be
 precluded from discontinuing or modifying it.  See National Association
 of Air Traffic Specialists and Department of Transporation, Federal
 Aviation Administration, 6 FLRA 588 (1981) (Union Proposals I-III).
 
    8.  Section 4.J.
 
    Section 4.J. requires management, in establishing timeliness
 standards which subtract points from an employee's performance rating
 for failure to meet the standards, to provide also in such standards for
 the addition of points to an employee's rating where work is completed
 in less than half the time required.  By mandating standards which
 contain provision for the addition of points the proposal has the same
 effect as the proposal at issue in Bureau of the Public Debt:  it
 prescribes the content of a performance standard.  Thus, for the reasons
 set forth fully in Bureau of the Public Debt, Section 4.J. directly
 interferes with management's right to direct employees and assign work.
 
    9.  Section 4.K.
 
    Section 4.K. provides that, except for certain specified
 circumstances, patent examiners will be required to comply with
 applicable timeliness standards only once during each quarter of an
 appraisal period.  As explained by the Union, the proposal is intended
 to preserve employee flexibility to manage time and plan work so as to
 allow thorough examination of claims instead of concertrating on meeting
 deadlines.  According to the Union, patent examiners have no control
 over the number of patent applications, and amendments thereto, filed in
 a given period.  Moreover, the complexity of the issues involved in each
 application varies.  Patent examiners therefore cannot always meet the
 Agency's mission of issuing valid patents within the limited time
 available under the constraints of the timeliness standards.  Union
 Response to Agency Statement of Position at 22.  For these reasons, the
 Union contends that Section 4.K. provides an appropriate arrangement,
 under section 7106(b)(3), for employees adversely affected by the
 establishment of timeliness standards.
 
    The effect of Section 4.K. is to provide patent examiners with a
 significant block of worktime which will not be counted against them in
 an evaluation of their performance under applicable timeliness
 standards.  The proposal therefore has essentially the same effect as
 Union Proposal 2 in American Federation of Government Employees,
 AFL-CIO, Local 1923 and Department of Health and Human Services, Social
 Security Administration, 12 FLRA 17 (1983), which afforded certain "time
 allowances" for employees in the performance of specific job
 requirements.  The Authority held that the proposal required the agency
 to negotiate on the content of performance standards and thus directly
 interfered with management's rights.  For the reasons set forth in the
 Social Security Administration decision, Section 4.K., by prescribing a
 similar "time allowance," is nonnegotiable under section 7106(a)(2)(A)
 and (B).  See also, American Federation of Government Employees,
 AFL-CIO, Local 32 and Office of Personnel Management, 18 FLRA No. 37
 (1985).
 
    Moreover, for the reasons discussed in connection with Section 3.K.
 above, we need not determine whether Section 4.K. is an "appropriate
 arrangement," since, like that proposal, it does not qualify for
 consideration under section 7106(b)(3).
 
         E.  Proposal Concerning Patent Examiner Authority Levels
 
    Section 5
 
    Section 5 establishes a criterion -- inverse proportionality based on
 signatory authority -- for determining the level of performance (that
 is, the number of errors) needed to justify the denial of a within-grade
 increase or an unacceptable rating in patentability determination and
 action taking.  The proposal effectively precludes management from
 setting levels of performance in those standards which do not conform to
 the required proportionality.  Therefore, Section 5 has the same effect
 on management's right to determine the content of the standard for a
 given level of performance as the proposals in National Treasury
 Employees Union and Internal Revenue Service, 13 FLRA 329 (1983).  In
 that case, the Authority, relying on National Treasury Employees Union
 and U.S. Nuclear Regulatory Commission, 13 FLRA 325 (1983), held that a
 proposal which establishes levels of performance in specific critical
 elements according to a formula based upon certain averages directly
 interfered with management's rights.  For the reasons set forth more
 fully in Nuclear Regulatory Commission, therefore, Section 5, by
 restricting management's discretion to determine the levels of
 performance sufficient for certain ratings, directly interferes with
 management's rights to direct employees and assign work and is outside
 the Agency's duty to bargain.  See also American Federation of
 Government Employees, AFL-CIO, Local 32 and Office of Personnel
 Management, Washington, D.C., 14 FLRA 6, 12-14 (1984) (Union Proposal 6)
 (nonnegotiability of performance levels for within-grade increases),
 enforced sub nom. FLRA v. OPM, Washington, D.C., 778 F. 2d 844 (D.C.
 Cir. 1985).
 
            F.  Proposals Concerning the Implementation of the
 
                Performance Standards of Patentability Determination for
 
                Patent Examiners
 
    1.  Section 6.B.
 
    Section 6.B. concerns the Agency's standard for "Patentability
 Determination", which has been established in the Agency's performance
 appraisal system.  See Exhibit D attached to the Agency's Statement of
 Position.  The Agency's standard is stated as whether there has been any
 "clear error" in the allowance of a patent claim.  The proposal would
 further define what constitutes "clear error" by reference to whether a
 "reasonable" Supervisory Primary Examiner would have allowed the claim.
 The proposal therefore prescribes the quality of claim allowance to be
 expected of patent examiners and how their performance under the
 standard for "Patentability Determination" will be evaluated.
 
    In prescribing the content of the standard for patentability
 determination, that is, the kind of care required of examiners in
 allowing claims, Section 6.B. has the same effect as the proposal at
 issue in Bureau of the Public Debt, 3 FLRA 769 (1980).  While Section
 6.B. does not prescribe a specific standard for a particular personnel
 action, as did that in Bureau of the Public Debt, it nevertheless
 establishes the overall standard of quality in claims allowance which
 employees will be required to achieve and against which their
 performance will be measured.  In determining a qualitative requirement
 of employees' jobs, Section 6.B., for the reasons set forth more fully
 in Bureau of the Public Debt, directly interferes with management's
 rights and is outside the duty to bargain.
 
    The Union argues that the proposal concerns the implementation of a
 standard already established by management and, thus, that it is to the
 same effect as American Federation of Government Employees, AFL-CIO,
 Local 32 and Office of Personnel Management, Washington, D.C., 3 FLRA
 784, 789 (1980) (Union Proposal 5) and American Federation of Government
 Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance
 Corporation, Chicago Region, Illinois, 7 FLRA 217, 223 (1981) (Union
 Proposal 2).  To the contrary, while those proposals establish standards
 of review governing the application of performance standards, that
 portion of Section 6.B. which pertains to the definition of "clear
 error" is clearly substantive.  The proposal does not concern how the
 "clear error" standard should be applied but what "clear error" means,
 that is, what kind of performance constitutes "clear error." See Saint
 Lawrence Seaway Development Corporation, 5 FLRA at 70 (Union Proposal
 1).  Moreover, contrary to the Union, the fact that the proposal does
 not specify a particular amount of work to be done, for example 9
 batches per hour, as in Bureau of the Public Debt, is irrelevant.  See
 Saint Lawrence Seaway Development Corporation (Union Proposal 1).
 Finally, for the reasons discussed in connection with Section 3.K.
 above, we need not determine whether Section 6.B. is an "appropriate
 arrangement," since, like that proposal, it does not qualify for
 consideration under 7106(b)(3).
 
    The Union also indicates that the matters set forth in Section 6.B.
 have been adopted by management for inclusion in its performance
 appraisal system pursuant to negotiations between the parties.  However,
 there is a crucial difference between management, as an exercise of its
 statutory rights under section 7106(a), unilaterally adopting matters
 proposed by the Union and, on the other hand, requiring management to
 negotiate with the Union over the inclusion of those same matters in a
 collective bargaining agreement.  See the discussion of Section 4.H. and
 4.I. above.  The fact that the matters set forth in this Union proposal
 are also set forth in the Agency's performance appraisal system
 therefore is not dispositive as to negotiability of Section 6.B.
 
    2.  Section 6.C.
 
    Section 6.C. prescribes a formula by which management must determine
 the level of performance required to achieve a given rating in the area
 of patentability determination.  In essence, this formula requires that
 the level of errors in patentability determination which is sufficient
 for a given level of achievement or rating be established in terms of
 the Patent Office-wide average for such errors as determined through
 certain specified quality review procedures.  Under the proposal, the
 resultant average error rate is used to define, for example, the middle
 range of performance constituting satisfactory performance.
 
    By determining in this manner the content of the standard for
 achieving various levels of performance, Section 6.C. has the same
 effect as the proposals in National Treasury Employees Union and
 Internal Revenue Service, 13 FLRA 329 (1983), which established the
 levels of performance sufficient for various ratings based upon certain
 specified averages.  The Authority held, based on Nuclear Regulatory
 Commission, 13 FLRA 325 (1983), that those proposals, by restricting
 management's discretion to determine the levels of performance which it
 would require of employees, directly interfered with management's
 rights.  For the reasons more fully set forth in Nuclear Regulatory
 Commission, therefore, Section 6.C. directly interferes with
 management's rights and is outside the Agency's duty to bargain.
 
            G.  Proposals Concerning the Implementation of the
 
                Performance Standard for Action Taking for Patent
 
                Examiners
 
    1.  Section 7.B.
 
    Section 7.B., which has been established by the Agency as a part of
 its performance appraisal system, concerns the standard for "Action
 Taking," namely, whether there is "clear error" in the actions taken by
 patent examiners in various areas, for example, the unreasonable
 rejection of a patent claim.  The proposal further defines the meaning
 of "clear error," first, by prescribing the kind of care required of
 patent examiners, that is, an action which would not have been allowed
 by a reasonable Supervisory Primary Examiner, and, second, by
 prescribing with specific examples what shall and what shall not be a
 "reasonable action" by a patent examiner.
 
    By prescribing the kind of care which patent examiners must exercise
 with regard to actions taken in processing patent claims, Section 7.B.,
 like Section 6.B., has the same effect as the proposal in Bureau of the
 Public Debt, 3 FLRA 769 (1980).  It prescribes the content of a
 qualitative performance standard in the same manner as the proposal in
 that case determined the content of a quantitative performance standard.
  For the reasons set forth in Bureau of the Public Debt, Section 7.B.
 directly interferes with those rights and is outside the duty to
 bargain.
 
    2.  Section 7.C.
 
    Section 7.C., which is virtually identical to a part of the Agency's
 performance appraisal system, prescribes the levels of performance an
 employee must achieve in order to receive a given rating in the area of
 action taking.  See Exhibit D attached to the Agency's Statement of
 Position.  For example, under the proposal, an employee will not be
 rated less than satisfactory unless that employee has made serious and
 repetitive errors in any one of the five areas set forth in the "Action
 Taking" standard.  The proposal therefore has the same effect as Union
 Proposal 2 in Nuclear Regulatory Commission, and is outside the duty to
 bargain for the reasons stated in that decision.
 
            H.  Proposals Concerning the Implementation of the
 
                Performance Standard of Production Goal Achievement For
 
                Patent Examiners
 
    1.  Section 9.B.
 
    As to Section 9.B., under the Agency's performance appraisal system
 the performance standard pertaining to "Production Goal Achievement" is
 stated in terms of the degree to which an employee is able to accomplish
 such goals.  See Exhibit D attached to the Agency's Statement of
 Position.  The Agency's performance appraisal system contains a formula
 for determining the degree to which a patent examiner has achieved a
 particular production goal and a "schedule" for assigning a rating based
 upon the degree of achievement.  However, there is no equivalent formula
 in the record for determining the goal itself, nor is there a "table"
 correlating an employee's grade and examining authority with the
 complexity of the "art" or area in which the employee works so as to
 establish a particular production goal.  On the other hand, though the
 record contains no information as to how such goals were established, it
 does indicate that the goals are stated in terms of the average amount
 of examining time it is estimated should be used by a patent examiner to
 process an application and varies according to the grade and examining
 complexity of the area in which the examiner works.  In essence, under
 the Agency's appraisal system, the establishment of a particular
 production goal for the processing of a given application determines the
 standard by which employee performance will be measured, that is, the
 length of time it should take the examiner to process a patent
 application.
 
    Turning to the proposal itself, where management assigns to a patent
 examiner for processing an application in an area with which that
 examiner is unfamiliar, Section 9.B. requires management to adjust the
 production goal which it would normally establish for the application,
 that is, afford the examiner more "examining time." In addition, where
 the task of processing an application takes more time than was estimated
 when the goal was initially decided upon, Section 9.B. requires
 management to establish the actural amount of time used as the
 production goal, unless such an amount of time is unreasonable.  In
 either case, therefore, the proposal requires management to change the
 production goal which it had established for the type of work involved
 and to adopt a different standard.  By preventing management from
 determining the content of the standard, Section 9.B. is therefore
 outside the duty to bargain for the reasons stated in Bureau of the
 Public Debt.
 
    The Union contends that the proposal is an appropriate arrangement
 under section 7106(b)(3) for employees adversely affected by the
 assignment of unfamiliar "art." However, because Section 9.B. concerns
 the content of performance standards it does not constitute an
 "arrangement" for employees adversely affected by the exercise of
 management's rights within the meaning of section 7106(b)(3).  See the
 discussion of Section 3.K. above.  As to the Union's additional
 contention that the subject matter of the proposal is already contained
 in the Agency's performance appraisal system pursuant to discussions
 with the Union, see the discussion of Section 6.B. above.
 
    2.  Section 9.C.
 
    Under the first paragraph of Section 9.C., patent examiners shall
 have three hours of nonexamining time, that is, time not subject to
 appraisal, to familiarize themselves with the procedures for processing
 reexamination applications when they are assigned such an application
 for the first time.  The record indicates that Congress has newly
 provided for this type of application and, thus, such applications have
 not previously been among examiners' regularly assigned duties.  The
 effect of the proposal, therefore, is to provide examiners an
 opportunity to prepare themselves to perform this duty, when it is
 assigned for the first time, before starting to do the work under a
 production goal.
 
    Contrary to the Agency, the proposal does not affect management's
 right to establish production goals for work done on a reexamination
 application, since it concerns merely a one-time-only period of
 preparation to do that work.  However, by providing for such a period of
 preparation, the first paragraph of Section 9.C. has the same effect as
 the proposal at issue in National Treasury Employees Union and
 Department of the Treasury, Internal Revenue Service, 23 FLRA No. 36
 (1986).  In that case, we held that a proposal providing employees who
 returned to their regular positions from a detail reasonable time to
 familiarize themselves with relevant Agency instructions directly
 interfered with management's right to assign work under section
 7106(a)(2)(B) by establishing a priority for a particular work
 assignment.  The proposal here has a similar effect.
 
    The Authority also held that the proposal in that case was a
 negotiable appropriate arrangement under section 7106(b)(3).  For the
 Authority to consider whether a proposal is an appropriate arrangement,
 a union must first demonstrate that employees have been or will be
 adversely affected by management's exercise of its rights and that the
 Union's proposal is intended to mitigate those adverse effects.
 National Association of Government Employees, Local 14-87 and Kansas
 Army National Guard, 21 FLRA No. 4, slip op. at 8 (1986).  In cases
 filed before our decision in Kansas Army National Guard, such as this
 one, we will examine the record to determine whether any adverse effects
 have been identified or whether such effects are reasonably foreseeable
 based upon the nature of the matter in dispute.
 
    The first paragraph of Section 9.C., like the proposal in Internal
 Revenue Service, 23 FLRA No. 36, constitutes an "arrangement" for
 employees adversely affected by the exercise of management's rights.
 Like the proposal in that case, the first paragraph of Section 9.C.
 would mitigate against the reasonably foreseeable adverse effect upon
 employees of being evaluated on the performance of work which had not
 previously been assigned to them.  It would alleviate that burden by
 permitting employees who need to become acquainted with new procedures
 in order to perform new work assignments a period of time to do so.  It
 is, moreover, an "appropriate" arrangement within the meaning of section
 7106(b)(3).  Like the proposal in the Internal Revenue Service case, the
 burden imposed on management's right to assign work by the three hours
 of preparation afforded employees under the first paragraph of Section
 9.C. is insubstantial compared to the benefit to employees, and to
 management, of that preparation in terms of quality of work product.
 For the reasons set forth in the Internal Revenue Service case,
 therefore, we find the first paragraph of Section 9.C. to be a
 negotiable appropriate arrangement under section 7106(b)(3).  See also
 American Federation of Government Employees, Local 3231 and Social
 Security Administration, 22 FLRA No. 92 (1986) (Union Proposal 3).
 
    In contrast, the second part of Section 9.C. concerns management's
 determination of the production goal for work done in disposing of a
 reexamination application.  By requiring management to afford patent
 examiners a reasonable amount of non-examining time in which to decide
 whether to grant a reexamination application, the proposal precludes
 management from establishing performance standards or production goals
 which make the amount of time spent on that part of the process a
 requirement of the job.  The second part of Section 9.C. therefore has
 the same effect as Union proposals 6 and 7 in American Federation of
 Government Employees, National Council of Social Security Payment Center
 Locals and Social Security Administration, Office of Program Service
 Centers, Baltimore, Maryland, 7 FLRA 818, 820 (1982).  Those proposals,
 in essence, precluded management from establishing job requirements
 pertaining to the size of work inventory.  The Authority held, based
 upon its decision in Bureau of the Public Debt, 3 FLRA 769, that by in
 effect eliminating the size of inventories as an aspect of performance
 appraisal, Union Proposals 6 and 7 directly interfered with management's
 rights.  Similarly, the second part of Section 9.C. directly interferes
 with management's rights and is outside the Agency's duty to bargain.
 
    The third part of Section 9.C. provides that where the actual amount
 of time taken to process a reexamination application differs from the
 production goal, the goal will be adjusted to reflect the actual time
 used, unless it is unreasonable.  This part has the same effect as
 Section 9.B.  By requiring management to modify the content of its
 previously established standard and, in effect, adopt a different
 standard, namely, the actual time used, Section 9.B. prescribes the
 content of a performance standard and, thus, as did the proposal in
 Bureau of the Public Debt, directly interferes with management's rights.
  For the reasons set forth in Bureau of the Public Debt, therefore, the
 third part of Section 9.C., which likewise prescribes the content of a
 performance standard, directly interferes with management's rights and
 is outside the Agency's duty to bargain.
 
    3.  Section 9.D.
 
    Section 9.D. requires management to record in a special category the
 amount of time spent by a patent examiner on a reexamination application
 or an application from an unfamiliar area.  The proposal does not
 concern the amount of time within which the examiner will be required to
 complete work on a given application, that is, a production goal, but
 only the form in which management will record how long it actually took
 to finish that work.  Contrary to the Agency, therefore, the proposal
 does not concern the manner in which patent examining will be done, nor
 the tools and technical devices which will be used, so as to constitute
 the "methods, means, and technology" utilized in performing the Agency's
 work.  See, for example, National Federation of Federal Employees, Local
 541 and Veterans Administration Hospital, Long Beach, California, 12
 FLRA 270 (1983).  Rather, as the Union contends, Section 9.D. is a
 procedure for implementing the record-keeping requirements of
 management's production goal standard and would not prevent management
 from determining the content of that standard.  Therefore, Section 9.D.
 constitutes a negotiable procedure under section 7106(b)(2) of the
 Statute and is within the Agency's duty to bargain.
 
    4.  Section 9.E.
 
    Section 9.E. would require the Agency to increase annually the time
 limits which constitute the production goals for patent examiners in
 proportion to the increase in the size of the search file.  The proposal
 establishes a formula, namely, proportionality, for determining on a
 yearly basis the goals for patent examiners.  Section 9.E. thus
 prescribes, through the imposition of the criterion of proportionality,
 the amount of time which will be afforded patent examiners to complete
 review of a given application.  This proposal, like the one in Bureau of
 the Public Debt, determines the amount of work which could be required
 of employees, and therefore directly interferes with management's rights
 and is outside the duty to bargain.  See also Veterans Administration
 Local 1151, American Federation of Government Employees, AFL-CIO, and
 Veterans Administration, 19 FLRA No. 84 (1985) (proposal requiring
 adjustments to performance standards nonnegotiable).  Moreover, for the
 reasons discussed in connection with Section 3.K. above, we need not
 determine whether Section 9.E. is an "appropriate arrangement," since,
 like that proposal, it does not qualify for consideration under section
 7106(b)(3).
 
    5.  Section 9.F.
 
    Generally speaking, Section 9.F. has the effect of determining the
 nature and the content of the job requirements as to production goals
 which the Agency will include in its performance appraisal system.  By
 defining "production goals" as approximations of the amount of time
 which will be required to process a patent claim and, consequently,
 providing that they should not be considered job "expectancies or
 quotas," the first paragraph precludes management from formulating
 performance standards that are strict, precisely defined job
 requirements.  The second paragraph sets forth specific circumstances
 which would be sufficient to rebut the prima facie levels contained in
 Article VII, Section 2, of the parties' existing agreement.  /7/
 Considered solely as to that aspect which provides for the standards to
 be prima facie, the proposal in effect determines the content of those
 standards by obligating management to modify its job requirements.  By
 providing that employees who achieve a level of performance less than
 that specified in the standard may nevertheleess, based upon a showing
 that any of the stated circumstances apply, receive, for example, a
 within-grade salary increase, the second paragraph of the proposal
 effectively reduces the amount of work which management can require of
 employees for that purpose.  By requiring management in this manner to
 adjust its production goals under the specified circumstances (as
 opposed to modifying the results of the performance appraisal) and
 restricting the effect of the production goal by excluding certain work
 time therefrom, the third and fourth paragraphs of Section 9.F.
 similarly preclude management from determining the content of its
 performance standards.
 
    By establishing criteria which have the purpose and effect of
 requiring management to adjust its job requirements, Section 9.F. is
 similar to the proposal in Veterans Administration Local 1151, American
 Federation of Government Employees, AFL-CIO and Veterans Administration,
 19 FLRA No. 84 (1985).  That proposal required management to adjust the
 content of performance standards in specified circumstances and the
 Authority held it to be nonnegotiable under section 7106(a)(2)(A) and
 (B).  Section 9.F. likewise prescribes circumstances in which management
 would be required to modify job requirements, and for that reason is
 outside the Agency's duty to bargain.  See also American Federation of
 Government Employees, AFL-CIO, Local 12 and Department of Labor, 21 FLRA
 No. 129 (1986) (Union Proposals 17 and 20).  Moreover, for the reasons
 discussed in connection with Section 3.K. above, we need not consider
 whether Section 9.F. is an "appropriate arrangement," since, like that
 proposal, it does not qualify for consideration under section
 7106(b)(3).
 
    6.  Section 9.G.
 
    Section 9.G. provides that time spent performing certain tasks will
 be considered nonexamining time and excluded from the amount of time for
 which employees are held accountable under the production goals.  In
 effect, the proposal requires management to change the significance of
 the production goal as a measure of employee productivity and thereby
 modifies the content of the performance standard of production goal
 achievement.  In a manner similar to Section 9.F. above, therefore,
 Section 9.G. restricts management's right to determine the content of
 performance standards and is outside the Agency's duty to bargain.
 Moreover, for the reasons discussed in connection with Scetion 3.K.
 above, we need not determine whether Section 9.G. is an "appropriate
 arrangement," since, like that proposal, it does not qualify for
 consideration under section 7106(b)(3).
 
    7.  Section 9.H.
 
    Section 9.H. provides that performance ratings for patent examiners
 will be assigned in accordance with Article VII, Section 2 of the
 parties' existing agreement, /8/ in particular, that portion pertaining
 to the granting or denying of within-grade pay increase.  /9/ Under the
 proposal, achievement of 75% of the assigned production goal is
 sufficient performance to constitute an "acceptable level of competence"
 on the factor of quantity warranting the granting of a within-grade
 increase, /10/ unless management can provide adequate justification that
 this level of productivity is insufficient.  That is, in the absence of
 any such justification management must grant a within-grade increase for
 performance at that level.  Management is thereby precluded from
 determining that a higher level of performance on the factor of quantity
 would be sufficient, absent the requisite justification.  /11/
 
    In prescribing the level of performance needed for an "acceptable
 level of competence" on the factor of quantity warranting the granting
 of a within-grade increase, Section 9.H. has the same effect as Union
 Proposal 6 in American Federation of Government Employees, AFL-CIO,
 Local 32 and Office of Personnel Management, Washington, D.C., 14 FLRA
 6, 12-14 (1984).  In that case, the proposal prescribed the quality of
 performance which would evidence an "acceptable level of competence"
 qualifying an employee for a within-grade salary increase.  The
 Authority held, relying on American Federation of State, County and
 Municipal Employees, AFL-CIO, Council 26 and U.S. Department of Justice,
 13 FLRA 578 (1984), that the proposal directly interfered with
 management's rights.  For the reasons more fully set forth in the Office
 of Personnel Management and Department of Justice decisions, Section
 9.H. likewise directly interferes with management's rights and is
 outside the Agency's duty to bargain.
 
    The Union argues that Section 9.H. does not bind management to a
 particular quantitative level of productivity, since the proposal is
 stated in terms of a percentage of the production goal and therefore
 management can change the production goal if it determines that a higher
 level of output is necessary for purposes of a within-grade increase.
 Preserving management's discretion as to the production goal aspect of
 the standard, while limiting that discretion as to the percentage aspect
 of the standard, nevertheless precludes management from changing the
 standard as to that aspect whereby it is limited.  Consistent with its
 rights under section 7106(a)(2)(A) and (B) of the Statute, however,
 management cannot be restricted to determining the content of the
 performance standards only through the establishment of the production
 goal.
 
              I.  Proposal Concerning Performance Appraisals
 
    1.  Section 11.B.
 
    Section 11.B. establishes four rating categories or levels for
 evaluating employees' overall performance.  It therefore is like the
 proposal in Department of Justice, 13 FLRA 578 (1984), which required
 management to establish five rating levels for individual critical
 elements and three for overall performance.  The Authority held that
 that proposal directly interfered with management's rights through the
 establishment of job requirements for various levels of performance.
 For the reasons more fully set forth in the Department of Justice
 decision, Section 11.B. is similarly outside the Agency's duty to
 bargain.  See also Department of the Air Force, Lowry Air Force Base,
 Denver Colorado and American Federation of Government Employees,
 AFL-CIO, Local 1974, 22 FLRA No. 47 (1986).  /12/
 
    Furthermore, Section 11.B. also prescribes the level of achievement
 which will warrant a given overall rating, for example, outstanding
 performance in one of the performance standards for the critical element
 of patent examining.  In this manner, the proposal would preclude
 management from requiring, for instance, outstanding performance in at
 least two standards for the critical element in order to warrant an
 overall rating of outstanding.  Section 11.B. therefore has the same
 effect as Union Proposal 2 in Nuclear Regulatory Commission, 13 FLRA 325
 (1983), which required negotiation on the standards for various rating
 levels.  The Authority held that an integral part of management's rights
 to direct employees and assign work is the establishment of standards
 for each performance level within an Agency's performance appraisal
 system.  For the reasons set forth in the Nuclear Regulatory Commission
 decision, the proposal in this case also directly interferes with
 management's rights and is outside the Agency's duty to bargain.
 
    2.  Section 11.D.
 
    The portion of Section 11.D. which remains in dispute provides that,
 for all evaluations, an employee will not be adversely evaluated for any
 error which the employee has corrected prior to the evaluation.  /13/ In
 effect, therefore, Section 11.D. requires management to substantively
 modify those performance standards which are formulated in terms of
 errors in patent examining, for example, patentability determination and
 action taking, so as to exclude as error under those standards any
 actions which have been corrected by the employee prior to evaluation of
 that employee's performance.  In this manner, the proposal redefines
 what constitutes an error in performance, effectively reducing the level
 of performance which can be required of employees, and thus has the same
 effect as Union Proposals 1-6 in American Federation of Government
 Employees, Local 1760, AFL-CIO and Department of Health and Human
 Services, Social Security Administration, 15 FLRA 909, 912-16 (1984).
 Those proposals defined what constituted an error, prescribed the extent
 to which management would consider certain mistakes in evaluating the
 accuracy of work, and assigned varying degrees of importance to the
 enumerated categories of errors.  The Authority found those proposals
 nonnegotiable, citing Bureau of the Public Debt, 3 FLRA 769 (1980), and
 Nuclear Regulatory Commission, 13 FLRA 325 (1983), because they
 determined the level of performance in terms of accuracy which is to be
 deemed unacceptable and the degree to which it is unacceptable.  Section
 11.D. likewise affects management's determination of acceptable levels
 of error and, for the reasons set forth in the Social Security
 Administration decision, is outside the Agency's duty to bargain.
 
    Moreover, by precluding errors which have been corrected from being
 held against an employee in a performance appraisal, Section 11.D.
 precludes management from holding employees accountable for those
 errors.  While the proposal would not necessarily prevent management
 from disciplining employees for unacceptable performance, assuming an
 employee had made enough uncorrected errors to warrant an unacceptable
 rating under applicable performance standards, it would effectively
 limit management's right to take disciplinary action by reducing the
 number of errors which management could count toward a finding of
 unacceptable performance.  In short, the proposal restricts the basis
 upon which management may take disciplinary action.  Section 11.D.,
 therefore, has the same effect as the proposal in American Federation of
 Government Employees, Local 1822, AFL-CIO and Veterans Administration
 Medical Center, Waco, Texas, 9 FLRA 709 (1982), where the Authority held
 that by eliminating certain medication errors as possible grounds for
 disciplinary action the proposal directly interfered with management's
 right under section 7106(a)(2)(A) to discipline employees in the agency.
  For the reasons set forth in the Veterans Administration Medical
 Center, Waco, Texas decision, Section 11.D., by reducing the number of
 errors which could be counted against an employee in a performance
 appraisal and, therefore, which could possibly constitute grounds for
 disciplinary action for unacceptable performance, similarly would
 directly interfere with management's right to discipline employees under
 section 7106(a)(2)(A) and is outside the Agency's duty to bargain.
 
    3.  Section 11.E.
 
    Section 11.E. precludes management from denying an employee a
 within-grade increase, or determining that an employee deserves an
 unacceptable rating or any other disciplinary action, based upon that
 employee's performance in the noncritical elements of his or her
 position.  /14/ In this regard, the Agency alleges, and the Authority
 agrees, that the proposal directly interferes with management's right
 under section 7106(a)(2)(A) of the Statute to discipline employees.  As
 the Agency argues, nothing in 5 U.S.C. Section 4303(a), 5 U.S.C. Section
 4301(3), or 5 CFR Section 430.203 /15/ precludes management from
 disciplining employees for reasons which include performance on
 noncritical elements.  Taken together, 5 U.S.C. Section 4303(a) and 5
 U.S.C. Section 4301(3) provide that removal or reduction in grade for
 reasons of unacceptable performance must be based on performance in one
 or more critical elements.  To this extent, therefore, the proposal
 merely restates the requirements of law.  On the other hand, neither law
 nor regulation precludes management from denying an employee a
 within-grade increase based on a summary rating of less than fully
 satisfactory which results from ratings on both critical and noncritical
 elements.  To the extent that Section 11.E. would prevent management
 from taking such an action because it is based in part on performance in
 a noncritical element, it directly interferes with management's right,
 under section 7106(a)(2)(A), to discipline employees and is outside the
 Agency's duty to bargain.
 
               J.  Proposal Concerning Transition Procedures
 
    Section 22.B.
 
    Section 22.B. requires management, on an interim basis, to establish
 as its standards for the granting or denying of a within-grade increase
 the currently existing standards for such a personnel action.  By
 establishing the level of performance required to achieve a particular
 overall rating of fully successful or its equivalent, in terms of the
 levels set forth in the currently existing standards, the proposal has
 the same effect as Union Proposal 6 in American Federation of Government
 Employees, AFL-CIO, Local 32 and Office of Personnel Management,
 Washington, D.C., 14 FLRA 6, 12-14 (1984).  In that case, the Authority
 determined that a proposal which established the quality of performance
 necessary to attain a "positive acceptable level of competence rating"
 directly interfered with management's rights.  By similarly prescribing
 the level of performance necessary for achieving a within-grade
 increase, Section 22.B., for the reasons set forth in Office of
 Personnel Management, directly interferes with management's rights and
 is outside the duty to bargain.  We note that although Section 22.B.
 requires management to adopt the specified standards for a limited
 period, while Union Proposal 6 in Office of Personnel Management
 contains no such limitation, this distinction is not dispositive.  The
 decisive factor in each proposal is that it requires management to
 exercise its rights in a particular manner, not the length of time which
 such a requirement applies.  Compare National Association of Government
 Employees, Local R4-75 and U.S. Department of the Interior, National
 Park Service, Blue Ridge Parkway, 24 FLRA No. 7 (1986) (Provision 3)
 (proposal providing 15 days notice prior to the effective date of a
 suspension is a negotiable procedure).
 
                                IV.  Order
 
    The Agency must upon request (or as otherwise agreed to by the
 parties) bargain concerning Section 4.D., Section 4.G., Section 4.I.,
 the first paragraph of Section 9.C., and Section 9.D. of the Union's
 Proposals.  /16/ The Union's petition for review as to Section 1.F.,
 Section 3.E., Section 3.F., Section 3.G., Section 3.H., Section 3.J.,
 Section 3.K., Section 4.A., Section 4.C., Section 4.E., Section 4.F.,
 Section 4.J., Section 4.K., Section 5, Section 6.B., Section 6.C.,
 Section 7.B., Section 9.B., the second and third paragraphs of Section
 9.C., Section 9.E., Section 9.F., Section 9.G., Section 9.H., Section
 11.B., Section 11.D., Section 11.E., and Section 22.B. is dismissed.
 
    Issued, Washington, D.C., February 2, 1987.
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier III, Member
                                       /s/ Jean McKee, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
                ---------------  FOOTNOTES$ ---------------
 
 
 
    (1) Section 9.H. was appealed separately as Case No. 0-NG-589.  The
 Union withdrew its appeal concerning Sections 6.A., 7.A., and 9.A. and
 those proposals will not be considered further.
 
    (2) Throughout this decision, our references to "management rights"
 mean the rights to direct employees, under section 7106(a)(2)(A), and to
 assign work, under section 7106(a)(2)(B), unless otherwise stated.
 
    (3) In National Treasury Employees Union and U.S. Nuclear Regulatory
 Commission, 13 FLRA 325 (1983) ("Nuclear Regulatory Commission"), the
 Authority held, relying on Bureau of the Public Debt, that the rights to
 direct employees and assign work under section 7106(a)(2)(A) and (B)
 extend to the establishment of levels of achievement, that is, rating
 levels, for any given critical element.  Just as the aspect of Section
 3.E. which pertains to performance standards is controlled by Lowry
 Technical Training Center, so is that aspect of Section 3.E. which
 pertains to rating levels.
 
    (4) 5 U.S.C. Section 4302(b)(1) provides as follows:
 
          Section 4302.  Establishment of performance appraisal systems
 
                       . . . . .
 
 
          (b) Under regulations which the Office of Personnel Management
       shall prescribe, each performance appraisal system shall provide
       for
 
          (1) establishing performance standards which will, to the
       maximum extent feasible, permit the accurate evaluation of job
       performance on the basis of objective criteria (which may include
       the extent of courtesy demonstrated to the public) related to the
       job in question for each employee or position under the system(.)
       (Emphasis added.)
 
    (5) Because we find these proposals interfere with management's
 rights, we do not reach the question of whether, in requiring more than
 is required by 5 U.S.C. Section 4302, they are also inconsistent with
 law and nonnegotiable under section 7117.
 
    (6) Element II in the Agency's performance appraisal system, "Docket
 Management," which contains the "turnaround" or timeliness standards
 referenced in the Union's proposal, is designated a noncritical element.
  Exhibit D attached to the Agency's statement of Position.  The
 Authority has held, however, based on its decision in Bureau of the
 Public Debt, that the designation of noncritical elements of a position
 and the establishment of performance standards for such noncritical
 elements constitute an exercise of management's rights.  Nuclear
 Regulatory Commission, 13 FLRA at 326-28.
 
    (7) For the text of this footnote see Appendix B to this decision.
 
    (8) See n. 7, supra, set forth in Appendix B.
 
    (9) The record indicates that during negotiations on the Agency's
 performance appraisal system the Agency notified the Union that it
 objected to the continuation of the provision of the existing agreement
 pertaining to the granting or denying of a within-grade pay increase
 based on achievement of 75% of an examiner's production goal.  Since the
 Union had incorporated that provision by reference in the instant
 proposal it requested and received from the Agency an allegation of
 nonnegotiability, which it then appealed to the Authority as Case No.
 0-NG-589.
 
    (10) For the text of this footnote see Appendix B to this decision.
 
    (11) For example, the Agency's performance appraisal system provides
 that achievement of 90% of the assigned production goal constitutes
 fully satisfactory performance as to production goal achievement.  See
 Exhibit D attached to the Agency's Statement of Position.
 
    (12) We note that Section 11.B. would also be nonnegotiable under
 section 7117(a)(1) because it is inconsistent with 5 CFR Section
 430.204(h), a Government-wide regulation issued by the Office of
 Personnel Management after this case was filed.  5 CFR Section
 430.204(h) requires performance appraisal systems to provide for five
 summary rating levels.
 
    (13) The Agency has withdrawn its allegation of nonnegotiability with
 respect to that part of Section 11.D. which limits employee evaluations
 only to actions taken or not taken during an appraisal period.  Thus,
 that portion of the proposal is no longer in dispute and will not be
 considered here.  Agency Statement of Position at 50.
 
    (14) The Union withdrew the last sentence of Section 11.E. from its
 appeal in this case.  Union Response to Agency Statement of Position at
 49-50.
 
    (15) 5 CFR Section 430.203 provides as follows:
 
          Section 430.203 Definitions
 
          In this part, terms are defined as follows --
 
                       . . .
 
 
          "Critical element" means a component of a job consisting of one
       or more duties and responsibilities which contributes toward
       accomplishing organizational goals and objectives and which is of
       such importance that "Unacceptable" performance on the element
       would result in "Unacceptable" performance of assigned work.
 
          "Non-critical element" means a component of an employee's job
       which does not meet the definition of a critical element, but is
       of sufficient importance to warrant appraisal and the assignment
       of an element rating.
 
    (16) In finding these Sections negotiable, we make no judgment as to
 their merits.
 
 
                                APPENDIX A
 
                   ARTICLE XIV.  PERFORMANCE APPRAISALS
 
    Section 1.  Definitions
 
                       . . . . .
 
 
    F.  Quality of patent examining refers to matters related to
 patentability of allowed claims.
 
    Section 3.  Procedures for developing and implementing performance
 standards
 
                       . . . . .
 
 
    E.  Within a given job classification such as patent examiners or
 patent classifiers, the performance standards, the units of measurement,
 and the levels at which different ratings will be given shall be (1) the
 same for all employees performing the same job function and (2)
 reasonably based on the differences in job functions for employees
 performing similar job functions.  If it is necessary to vary the
 performance standards, the units of measurement, or the levels at which
 different ratings will be given, management will, upon the presentation
 of a written request, provide adequate written justification for the
 variance.
 
    F.  Between different job classifications, the performance standards,
 the units of measurement, and the levels at which different ratings will
 be given shall be comparable for employees performing similar job
 functions with any variances being reasonably based on differences in
 job functions.  Upon the presentation of a written request, management
 will provide adequate written justification for any variances.
 
    G.  It shall be unreasonable to adversely evaluate an employee in the
 area of courtesy to the public unless there are at least three
 complaints from the public during the rating year which, upon
 investigation, the evidence establishes are justified.
 
    H.  Validation of the objectivity of the application of the units of
 measurement to written work products.  Prior to implementing a
 performance appraisal plan and on every third anniversary of this
 article, the application of each unit of measurement to written work
 products that involves some judgment shall be validated for objectivity
 in accordance with the following test procedure:
 
    1.  Each supervisor shall select two work products which he would
 give different ratings (from the same employee, if possible).
 
    2.  Each selected work product shall be independently and without
 prior consultation rated by:
 
          a.  two coordinate level supervisors under the jurisdiction of
       the selecting supervisor's reviewing official, if available (e.g.,
       two other SPEs in the same group).
 
          b.  the selecting supervisor's rating official (e.g., Group
       Director) and
 
          c.  a coordinate level supervisor or Quality Review Examiner
       outside the jurisdiction of the selecting supervisor's rating
       official (e.g., SPE in another group).
 
    To insure that the work products are compared with the standard and
 not with each other, a coordinate level supervisor shall rate no more
 than one work product selected by a particular rating official.
 
    The ratings shall include the reasons for the rating.
 
    3.  The ratings produced in subsection 2. above shall be compared for
 each work product.  Unless at least 90% of all work products reviewed
 receive identical ratings from all raters the application of the unit of
 measurement to the work product is not sufficiently objective for use in
 performance appraisals.  (Note that in the examining corps the sample
 size would be about 140 cases based on about 70 SPEs.  The heaviest
 burden would be on Directors who would each have about 8-10 cases to
 review.)
 
    4.  All test data, including each rating, the reasons for the
 ratings, and the work products rated, shall be supplied to POPA.
 
    5.  If the application of the unit of measurement to the work product
 is not sufficiently objective according to the criterion in subsection
 3. above, management may either propose a new unit of measurement and
 subject it to a new test or management may redefine the unit of
 measurement (e.g., by decreasing the sensitivity of the unit of
 measurement) so that the test actually conducted would be applicable but
 would satisfy the criterion in subsection 3. above.
 
                       . . . . .
 
 
    J.  Accuracy.  All performance standards, applications of units of
 measurement to the work measured, interpretations of whether the
 standards have been met, and levels at which different ratings will be
 given shall permit the accurate evaluation of job performance to the
 maximum extent feasible as required by 5 USC 4302(b)(1).  If POPA
 proposes any performance standard, applicaiton of a unit of measurement
 to the work measured, interpretation of whether the standard has been
 met, or levels at which different ratings will be given that is feasible
 and more accurate than that proposed by management, then either (a) the
 performance standard, application of a unit of measurement to the work
 measured, interpretation of whether the standard has been met, or levels
 at which different ratings will be given as proposed by POPA will be
 adopted or (b) management must propose a performance standard,
 application of a unit of measurement to work measured, interpretation of
 whether the standard has been met, or levels at which different rating
 will be given that is at least as accurate as the one proposed by POPA.
 No performance standard, application of a unit of measurement to the
 work measured, interpretation of whether the standard has been met, or
 levels at which different ratings will be given shall be used to
 evaluate any employee unless the performance standard, application of a
 unit of measurement to the work measured, interpretation of whether the
 standard has been met, or levels at which different ratings will be
 given is at least as accurate as the one proposed by POPA.  Any
 arbitrator who decides that management's proposed performance standard,
 application of a unit of measurement to the work measured,
 interpretation of whether the standard has been met, or levels at which
 different ratings will be given is not at least as accurate as the one
 proposed by POPA shall retain jurisdiction until management adopts a
 performance standard, application of a unit of measurement to the work
 measured, interpretation of whether the standard has been met, or levels
 at which different rating will be given that is at least as accurate as
 the one proposed by POPA.
 
    Performance standards, applications of units of measurement to the
 work measured, interpretations of whether the standsrds have been met,
 and levels at which different ratings will be given are not accurate in
 any of the following are true:
 
          1.  They hold an employee accountable for matters not under the
       employee's control.
 
          2.  They, as collectively applied to an employee, do not fully
       take into account the need to spend time on job functions which
       are not evaluated or for which time is not separately provided.
 
          3.  When collectively applied, they do not accurately evaluate
       the employee's contribution toward accomplishing the mission of
       the Patent and Trademark Office.
 
          4.  They are based on conduct or personal attributes unrelated
       to job functions.
 
          5.  They specify qualitative error rates as a function of
       quantitative performance because supervisors do not have time to
       evaluate more work products for employees who do a large volume of
       work than for other employees and the public interest is not
       served by making it safe for employees to do poor quality work
       just by doing more of the poor quality work.
 
    K.  All performance standards, applications of the units of
 measurement to the work measured, interpretations of whether the
 standards have been met, and levels at which different ratings will be
 given must be fair, equitable and reasonable.  If any of the following
 is true, the levels at which different ratings will be given do not meet
 the test of being fair, equitable and reasonable:
 
          1.  More than 5% of a statistically normal employee population
       cannot meet the level for a denial of a within grade increase or
       have not met the level in the year prior to the use of the level
       unless management presents adequate written justification that
       there exists a substantial need for the higher level (see Buffa,
       Elwood S., MODERN PRODUCTION MANAGEMENT, 2nd Ed., John Wiley &
       Sons, New York, 1965, pages 332-338 and 367-368.) Any showing of a
       need for a higher than one that can be met or has been met by 95%
       of the statistical normal employee population must be based on job
       functions actually assigned and not on other considerations such
       as budget restrictions or personnel ceilings.  It is management's
       responsibility to change the assigned job functions to conform to
       considerations such as budget restrictions or personnel ceilings.
 
          2.  The level is based upon average performance in the past
       without properly accounting for reasonable deviations from the
       average.
 
          3.  The level is based on what is physiologically possible
       rather than what is sociologically desirable as defined by Marvin
       E. Mundel in MOTION AND TIME STUDY PRINCIPLES and PRACTICES, 4th
       Ed., Prentice Hall, Inc., Englewood Cliffs, N.J., 1970, pages
       306-309 and 558-559.
 
          4.  The levels have not been validated by, or do not conform
       to, the requirements of 29 CFR Part 1607 as if the performance
       standards were employee selection criteria.
 
          5.  The levels for one employee are based upon the achievement
       of that employee or upon the achievements of particular other
       employees whose number is substantially less than the total number
       of employees in similar positions within the PTO.
 
          6.  The levels were developed under conditions and assumptions
       that do not apply to the time period when the levels are to be
       used unless compensating changes in assigned duties are made.  For
       example, the levels of patent examiners fail to take into account
       anticipated increases in the search files which are not
       compensated for by any changes in other assigned duties.
 
          7.  For patent examiners, the level for an acceptable level of
       competence shall be set no higher than a level determined by the
       following procedure:
 
          a.  For fiscal years 1978-1980, identify examiners (1) who were
       denied permanent signatory authority (full or partial), (2) for
       whom a written performance evaluation for the period of temporary
       authority is available, and (3) who were subsequently granted a
       within-grade increase for the period covered by their temporary
       grant.
 
          b.  Translate the written evaluations that formed the basis for
       the denial into an evaluation that would be made under the
       appraisal system proposed under this Article.  The lowest
       evaluation after translation shall be higher than the level set
       for an acceptable level of competence.
 
                       . . . . .
 
 
    Section 4.  Additional procedures for developing and implementing
 timeliness standards
 
    A.  All timeliness standards for patent examiners must take into
 account that each examiner is expected to set his priorities for when to
 act on his applications so that he will use his time most efficiently.
 If meeting a timeliness standard would conflict with meeting a quality
 goal or a production goal, the examiner should first give priority to
 meeting the quality goal and second give priority to meeting the
 production goal unless management has explicitly set the priorities
 differently.
 
                       . . . . .
 
 
    C.  Before any particular timeliness standard is put into effect,
 management shall test the standard by determining the degree to which
 the standard was met in fiscal year 1980, and shall provide the data
 collected to POPA.  Any standard which was not met by at least 95% of
 the individuals to which it applies shall be prima facie unreasonable.
 
    D.  Turnaround times shall be expressed in working days during which
 the employee is present and beginning after the employee is given the
 case ready for action.
 
    E.  Whenever an employee is expected to meet multiple timeliness
 standards simultaneously and those standards conflict in view of the
 time that must be spent to meet them, then the employee shall determine
 the priority of actions taken without any adverse effect on his
 performance appraisal except that the supervisor may determine the order
 in which categories of timeliness standards are to be met.
 
    F.  When multiple timeliness standards conflict with quantitative
 productivity standards as in the case of patent examiners whose reduced
 flexibility due to turnaround time standards, date case movement
 standards, etc., will result in less efficient use of time, an
 appropriate allowance will be made in either the timeliness standard or
 the productivity standard to avoid the conflict.
 
    G.  No employee shall be evaluated on the basis of production
 constancy unless the evaluation explicitly takes into account all job
 functions the employee is expected to perform and the actual amount of
 time available to perform those functions.
 
    H.  The following are examples of situations in which it shall be
 unreasonable to adversely evaluate an examiner for failure to meet a
 particular timeliness standard:
 
          1.  the action or actions required more time than the acutal
       amount of examining time available to the examiner.
 
          2.  an action which the examiner certifies requires a large
       block of uninterrupted time, such as a particular Examiner's
       Answer, must be prepared, and the required large block of
       uninterrupted time is not available to the examiner.
 
          3.  the examiner did not have an adequate amount of examining
       time because he was unavailable due to leave or he was directed or
       authorized to perform other functions.  An examiner is, however,
       expected to plan his work in anticipation of expected absences.
 
          4.  the patent applicant or his representative made an
       appointment to hold an interview or stated an intention to file a
       further paper.
 
          5.  the application to which the standard applies is
       unavailable.
 
          6.  material necessary for the preparation of an action (e.g.,
       a related application necessary for taking action, a translation
       of a reference, or a reference on order through the interlibrary
       loan system) is unavailable but ordered.  The examiner should make
       a reasonable attempt to obtain the needed material.  Once it
       appears impossible to obtain the needed material, the examiner
       must act on the application.
 
          7.  completion of the action is dependent upon the action of
       another employee over whom the examiner has no control (e.g., the
       application is out for terminal disclaimer processing,
       classification disputes, etc.
 
    I.  For employees other than patent examiners, it shall be
 unreasonable to adversely evaluate the employee under circumstances
 analogous to those set forth in subsection H. above.
 
    J.  Any measure of timeliness which subtracts points for instances of
 a failure to meet a standard shall also add an equal number of points
 for instances in which the required action is taken before one half of
 the allotted time expires.
 
    K.  Except for special cases or for applications in which a time
 period is running against applicant, compliance with timeliness
 standards for patent examiners shall be required no more often than once
 per quarter unless other duties are reduced to compensate for the
 examiners's reduced flexibility to plan how to use his time most
 efficiently or unless there is adequate justification.
 
    Section 5.  Patent examiner authority levels
 
    The performance standards of patentability determination and action
 taking are described from the perspective of an examiner having full
 signatory authority.  Examiners not having full signatory authority will
 be evaluated under these standards by applying the standards to the work
 product that the examiner actually turns in.  The number of errors that
 would justify a denial of a within grade increase or an unacceptable
 rating will increase in inverse proportion to the examiner's actual
 authority level.  Once an examiner having full signatory authority has
 signed an action of an examiner not having full signatory authority, the
 examiner not having full signatory authority is no longer responsible
 for any errors in the actions.  A nonsupervisory examiner who signs the
 actions of another examiner will not be adversely evaluated for errors
 in the actions except when the examiner is being evaluated for
 supervisory ability.
 
    Section 6.  Procedures for implementing the performance standard of
 patentability determination for patent examiners
 
    A.  Management has identified the following as being the performance
 standard of patentability determination:
 
    All allowed claims are patentable (i.e., there has been no clear
 error in the allowance of any claim):
 
          a.  over all art of record (under 35 USC 102 and 103)
 
          b.  over all art which if not of record, should have been
       (under 35 USC 102 and 103)
 
          c.  considering all other pertinent sections of the statute
       (such as 101, 112, 132, 251, etc.)
 
          d.  considering all nonstatutory rejections, i.e., double
       patenting of the obviousness type, etc.
 
    B.  In order to implement the performance standard of patentability
 determination in an accurate, equitable, and reasonable manner, the
 supervisor shall interpret whether the standard has been met as follows:
 
    "Clear error" in the allowance of a claim will be considered as
 having occurred where a reasonable SPE could not have permitted the
 allowance.  Clear error as defined here is not to be confused with an
 honest and legitimate difference in opinion as to what is and what is
 not patentable.  If the determination made by the examiner is reasonable
 and the determination proposed by the SPE is reasonable, this would
 represent an honest and legitimate difference of opinion and does not
 constitute a clear error.
 
    An examiner will not be charged with clear error for factors which
 are not within the examiner's control or knowledge.  Examples of such
 factors are:
 
          1.  The facts that rendered a claim unpatentable would not be
       discovered in a normal examination of the application containing
       the claim (for example, facts related to a best mode or to a
       public use).
 
          2.  A newly found reference which rendered a claim unpatentable
       was not classified or cross-referenced in any subclass or
       collection of prior art which was part of the proper field of
       search for the application involved.  In view of the limited
       amount of time allotted to examine applications, the search areas
       which are considered to be a proper field of search shall not
       include those areas in which it could reasonably have been
       determined that there was a low probability of finding a useful
       reference.
 
          3.  A newly found reference was not in its subclass when the
       examiner searched the application.  If the file integrity of a
       subclass is at issue, the accuracy of the following statements
       will constitute evidence that the reference was in its subclass
       and the inaccuracy of the following statements will constitute
       evidence that the reference was not in its subclass:
 
          a.  The newly found reference was in another subclass searched
       by the examiner.
 
          b.  Other references which teach the concept in question and
       which are not of record in the application are found in the
       subclass searched by the examiner.
 
          c.  The record in the application shows that the examiner did
       not understand the concepts being claimed.
 
          4.  A newly found reference was not found because the examiner
       had relied on the expertise of another examiner whose assigned
       docket area encompasses an area where the new reference is
       classified.  Evidence that the examiner failed to communicate the
       relevant features of the invention shall negate reliance upon the
       expertise of another.
 
          5.  The application is from an art not familiar to the examiner
       in which his level of technical expertise is less than that of
       those who normally examine the art, and, if at least one examiner
       has appropriate technical expertise in the art, the search notes
       indicated consultation with that examiner or the latter's
       supervisor.
 
          6.  The examiner made an inadvertent error of a clerical or
       typographical nature unless there are numerous such instances.
 
    Allowing a dependent claim which does not further restrict the claim
 from which it depends shall not be considered a clear error.
 
    C.  In order to implement the performance standard of patentability
 determination in an accurate, equitable, and reasonable manner, the
 supervisor shall assign the patentability determination rating as
 follows:
 
    A patentability determination error is an allowed application in
 which there is at least one clear error in the allowance of a claim.
 There can not be more than one patentability determination error for a
 single allowed application.  If the supervisor locates a patentability
 determination error, he shall analyze a sufficient number of the
 examiner's allowed applications to determine whether the patentability
 determination error is fairly representative of the examiner's work, the
 supervisor should consider what form of training would be most
 appropriate to correct the problem.  If the supervisor should consider
 rating the examiner unacceptable in patentability determination, the
 supervisor shall determine if the examiner has made more patentablility
 determination errors than a number of errors that is appropriate
 according to the Quality Review results as explained below.
 
    Satisfactory It shall be unreasonable to rate an examiner less than
 satisfactory in patentability determination unless he has made more
 patentability determination errors than a number of errors that is
 appropriate according to historical Quality Review results.  The
 historical Office-wide average rate of making patentability
 determination errors represents the middle of the satisfactory range.
 Assuming that the Office-wide average production goals remain constant,
 a number of errors that is appropriate according to the Quality Review
 results would be a number that is twice the average percentage of
 applications which has been found by Quality Review over the previous
 six year period to contain unpatentable claims times the average number
 of disposals per examiner per year over the same period.  If the average
 amount of time allotted per application should decrease without a
 compensating decrease in duties, the number of patentability
 determination errors that would be appropriate would correspondingly
 increase.
 
    Unacceptable If an examiner has made more patentability determination
 errors than are appropriate according to Quality Review results, he
 shall be rated unacceptable in patentability determination.
 
    Outstanding An outstanding rating in patentability determination will
 be assigned if the examiner, in addition to having no serious
 patentability determination errors, does more than is expected to
 strengthen the validity of issued patents.  Three or more of the
 following are evidence that would justify an outstanding in
 patentability determination:
 
          1.  Unusually high respect from others for the examiner's work.
 
          2.  Finding relevant references from outside the expected field
       of search.
 
          3.  Having superior technological competence, which could, for
       example, be measured by an above average number of consultations
       with the examiner in his assigned art area.
 
          4.  Having a superior knowledge of the references in the
       assigned art area, which could, for example, be measured by an
       above average success at locating useful references for searchers.
 
          5.  Taking initiative to acquire training that is beyond the
       training that is subsidized by management and that is directed
       toward improving technological knowledge.
 
          6.  Doing more than is expected to maintain the search files,
       such as by (a.) setting up a significant digest that is useful to
       other examiners, (b.) adding an extensive number of useful patents
       and publications to the search files, or (c.) removing large
       quantities of nonuseful reference from the search files.
 
          7.  Searches normally result in the discovery of the best art
       available.
 
          8.  Patentable subject matter is normally recognized as soon as
       the evidence or arguments in support of patentability are of
       record.
 
    Section 7.  Procedures for implementing the performance standard of
 action taking for patent examiners
 
    A.  Management has identified the following as being the performance
 standard of action taking:
 
    No clear error has been made in the following areas:
 
          (a) No unreasonable rejection was made,
 
          (b) No unreasonable formal requirement was made,
 
          (c) No action was arbitrary and/or capricious,
 
          (d) The record in an allowed application, taken as a whole, is
       reasonably clear as to the reasons for allowance, and
 
          (e) All matters of substance in affidavits and declarations
       have been treated.
 
    B.  In order to implement the standard of action taking in an
 accurate, equitable, and reasonable manner, the supervisor shall
 interpret whether the standard has been met as follows:
 
    "Clear error" in an action taken (or not taken) will be considered as
 having occurred where a reasonable SPE could not have permitted the
 action (or inaction) at the time and under the circumstances that the
 action (or inaction) was taken.  Clear error as defined here is not to
 be confused with an honest and legitimate difference of opinion as to
 what action should have been taken.  If the action taken by the examiner
 is reasonable and the action preferred by the SPE is reasonable, this
 constitutes an honest difference of opinion and the action taken by the
 examiner is free of clear error.
 
    In determining whether an examiner has made a clear error in action
 taking, the supervisor should consider that it is a priority goal of the
 Office to issue patents in a reasonably timely manner with the patents
 being as valid as is feasible given the limited amount of time allotted
 to examine the applications.  Thus, the Office desires to encourage
 examiners to reject unpatentable claims.  This desire is demonstrated by
 not including as action taking errors several areas in which an examiner
 can make an improper action or can fail to make a proper action.  This
 desire is also demonstrated by requiring that a rejection or formal
 requirement must be unreasonable before it becomes as action taking
 error.  An examiner therefore has the flexibility to make incorrect
 rejections or formal requirements as long as they do not rise to the
 level of being unreasonable.  Since the Office also desires to encourage
 examiners to correct any improper rejections and to add any needed
 rejections before allowance, the failure to make a proper rejection
 becomes an error only if an unpatentable claim becomes allowed.  The
 failure to make a proper rejection is a patentability determination
 error rather than an action taking error.
 
    1.  A minor formal rejection (e.g., under 35 U.S.C. 112 as failing to
 recite an antecedent basis) in lieu of a more significant and
 substantive rejection is an unreasonable rejection.  On the other hand,
 making only a rejection on 35 U.S.C. 112 where appropriate would not be
 clear error.
 
    2.  Decisions by the Board of Appeals that reverse a rejection of an
 examiner are ordinarily the result of an honest and legitimate
 difference of opinion and are not ordinarily based on a finding that the
 rejection was unreasonable.
 
    3.  If an examiner improperly accepts an affidavit or declaration
 submitted or the purpose of overcoming a rejection, and this improper
 acceptance results in the allowance of an unpatentable claim, then the
 examiner has made a clear error under Patentability Determination.  If
 the examiner fails to treat the affidavit or declaration at all, then
 the examiner has made a clear error under (e) above.  If the examiner
 improperly refuses to accept the affidavit or declaration, and this
 improper refusal results in an unreasonable rejection, then the examiner
 has made a clear error under (a) above.  The examiner should be given
 more latitude to refuse to accept an affidavit or declaration than to
 accept the affidavit or declaration as overcoming a rejection before the
 rejection would be considered to be unreasonable since the applicant can
 point out any errors in the refusal to accept while no one has an
 interest in pointing out errors in an improper acceptance of the
 affidavit or declaration.
 
    4.  The failure to make a rejection based on a defective reissue oath
 is a clear error under Patentability Determination if the claims are
 allowed.  A rejection based on an incorrect determination that a reissue
 oath is defective is a clear error under Action Taking if the rejection
 is unreasonable.  The examiner shall have greater latitude in making the
 rejection since an incorrect rejection is so much easier to correct than
 an incorrect allowance.
 
    5.  The record in an allowed application should be reasonably clear
 as to the reasons for allowance.  Under certain circumstances, such as
 when an examiner withdraws a rejection for reasons not in the record or
 when the references cited in a first action allowance are such that the
 reasons for allowance set forth in the record do not apply, that the
 examiner would be expected to add a reason for allowance to the record.
 
    6.  If an examiner has made one reasonable rejection, the failure to
 make a different or additional rejection is not a clear error.
 
    7.  A rejection is not unreasonable because it fails to explicitly
 mention a claim limitation or could have treated a claim limitation
 differently unless it was probable at the time the rejection was made
 that patentability would be predicated on the claim limitation.
 
    8.  A rejection or formal requirement that appears designed to harass
 an applicant is an example of an unreasonable rejection or formal
 requirement.
 
    9.  The failure to answer a specific argument which overcomes a
 rejection renders the subsequent making of that rejection an
 unreasonable rejection.
 
    10.  A restriction requirement is an unreasonable formal requirement
 if it is clearly contrary to written Office policy.
 
    11.  The refusal to enter an amendment without a relevant reason is
 an example of an arbitrary and capricious action.
 
    12.  The refusal to grant an interview without a relevant reason is
 an example of an arbitrary and capricious action.
 
    13.  Rejecting an allowance claim is an unreasonable rejection unless
 the response could improve the record as to the reasons for allowance.
 
    14.  An examiner shall not be adversely evaluated when an error is
 made in the course of acting on a case from an art not familiar to the
 examiner, in which his level of technical expertise is less than that of
 those who normally examine in the art, and the search notes indicate
 consultation with either (a) one or more examiners known to have
 appropriate technical expertise in the art or (b) the SPE in the Art
 Unit to which the art is assigned, and the error resulted from the lack
 of familiarity.
 
    15.  Objections to the specification will not be treated as clear
 error.
 
    16.  Failure to object to claim language which has no antecednet
 basis in the specification will not be clear error.
 
    17.  Making a rejection under 35 USC 102 when it should have been 35
 USC 103 and conversely shall not be clear error.
 
    18.  Any problems with the search are not covered under Action
 Taking.
 
    19.  The requirements for original oaths or declarations in patent
 applications are formal matters rather than matters of substance in
 accordance with (e) above.  Failure to mention whether an affidavit or
 declaration is effective for overcoming a rejection or for changing
 inventorship would be an error under (e).  Standard (e) deals with the
 question of whether matters of substance are treated at all and not with
 the question of whether these matters are treated properly.
 
    C.  In order to implement the performance standard of action taking
 in an accurate, equitable, and reasonable manner, the supervisor shall
 assign the action taking rating as follows:
 
    The supervisor shall determine if any of the identified action taking
 errors has been made in any of the examiner's allowed applications,
 abandonments or Examiner's Answers.  If the supervisor locates one of
 the identified action taking errors, he shall analyze a sufficient
 number of the examiner's allowed applications, abandonments or
 Examiner's Answers to determine whether the identified action taking
 error is fairly representative of the examiner's work or is merely an
 isolated error.  If the making of any identified action taking error is
 determined to be fairly representative of the examiner's work, the
 supervisor should consider what form of training would be most
 appropriate to correct the problem.  If the supervisor should consider
 rating the examiner unacceptable in action taking, the supervisor shall
 determine from the examiner's allowed applications, abandonments and
 Examiner's Answers whether the examiner has made serious and repetitive
 errors in any one of the five categories of identified action taking
 errors listed above.
 
    Satisfactory It shall be unreasonable to rate an examiner less than
 satisfactory in action taking unless he has made serious and repetitive
 errors in any one of the five categories of identified action taking
 errors listed above.
 
    Unacceptable If an examiner has made serious and repetitive errors in
 any one of the five categories of identified action taking errors listed
 above, he shall be rated unacceptable in action taking.
 
    Outstanding The following is evidence that would justify an
 outstanding rating in action taking:
 
          1.  File wrapper records which typically are unusually complete
       and clear relative to normal satisfactory file wrapper records.
 
          2.  Actions which typically are very thorough, clear and
       relatively concise compared to normal satisfactory actions.
 
          3.  Actions which do not contain redundant rejections or
       objections, i.e., compliance with compact prosecution.
 
          4.  Offering helpful suggestions and comments to a greater
       degree than required by Office practice.
 
          5.  Unusually high respect from others for the examiner's work.
 
          6.  Unusually creative and resourceful rejections.
 
          7.  Examiner's Answers which demonstrate unusually thorough
       analyses of the case law.
 
                       . . . . .
 
 
    Section 9.  Procedures for implementing the performance standard of
 production goal achievement for patent examiners
 
    A.  Management has identified the following as being the performance
 standard of production goal achievement:
 
    The examiner's production goal has been achieved.
 
    B.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable and reasonable manner, the
 supervisor shall follow the following procedures when unfamiliar art is
 assigned to an examiner:
 
    A fair and adequate adjustment for the assignment of either new or
 amended application in unfamiliar arts will, to the greatest extent
 possible, be agreed upon by the examiner and the SPE at the time the
 unfamiliar art is assigned.  In the past, a typical adjustment was 30%
 from the normal goal for the unfamiliar art.  If the original adjustment
 significantly differs from the actual time used, a change in the
 original adjustment will be made to reflect the actual time used unless
 the actual time used was unreasonable.
 
    Unless the situation is unusual, an examiner's goal in unfamiliar art
 will be adjusted for the unfamiliarity for as many pay periods as it
 takes him to produce two quarters' output i.e., the production for
 1664/2 equals 832 examining hours) of first actions for a docket
 containing only the unfamiliar art;  then by half the previous
 adjustment for as many pay periods as it takes him to produce another
 two quarters' output of first actions in the unfamiliar art.
 
    After he has produced four quarters' output of first actions, no
 further adjustments will be made as the art will no longer be considered
 unfamiliar.  However, if the cases in the unfamiliar art are so few and
 infrequent that the output is extended beyond a time during which
 familiarity can accure, the initial adjustment will continue ad
 infinitum.
 
    C.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable, and reasonable manner, the
 supervisor shall follow the following procedures when a reexamination
 application is assigned to an examiner:
 
    At the time of initial action on the examiner's first reexamination
 application, each examiner will be given three hours of non-examining
 time to review and become familiar with the reexamination procedures.
 
    For each reexamination application, the examiner will be given a
 reasonable amount of non-examining time to decide whether or not to
 grant the request for reexamination.  If the request is denied, no
 additional time will be provided because no further action will be
 required by the examiner.  If the request for reexamination is granted,
 the examiner will, in due course, receive both a first action credit and
 a disposal credit for the reexamination application.
 
    If the actual time it takes to examine a reexamination application
 differs from the hours per balanced disposal goal for the art involved,
 an adjustment will be made to reflect the actual time used unless the
 actual time used was unreasonable.
 
    D.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable, and reasonable manner, the
 following procedure for recording special examining time will be
 implemented:
 
    The time spent on reexamination applications and on applications from
 unfamiliar arts shall be recorded in a special examining time category
 that is distinct from the examining time category used to record the
 production time for regular examination in the familiar, assigned
 docket.
 
    E.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable, and reasonable manner, examiners'
 production goals will be adjusted in accordance with the following
 procedures:
 
    The assigned goals for examiners will be increased each year to
 provide additional examining time per application in proportion to the
 increase in the size of the search files since the goal was assigned.
 
    F.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable, and reasonable manner, the
 supervisor shall interpret whether the standard has been met as follows:
 
    Examiners' production goals are approximate guesses of how long
 should be needed to examine average applications.  It has never been
 possible to fairly and equitably assign individual production goals
 within an accuracy of plus or minus 25%.  Thus a goal can be used as
 only a rough measure of how effectively and efficiently an examiner is
 performing.  In view of the inaccuracies in assigned goals, it is
 unreasonable to treat goals as expectancies or quotas.  However, it is
 hoped that examiners will strive to meet their assigned goals.
 
    The following are examples of circumstances that could reasonably
 constitute a rebuttal of the prima facie levels set forth in Article
 VII, Section 2 of the Agreement or could reasonably rebut any proposed
 adverse performance appraisal based on the quantity of patent examining:
 
          1.  The applications worked during the rating period required
       more or less than the average amount of examination time for the
       assigned docket.
 
          2.  The assigned goal was not adequately adjusted (up or down)
       to accommodate changes in the technological complexity of the art
       or changes in the volume of the prior art that needs to be
       searched or changes in the competitiveness of the art.
 
          3.  The examiner was not adequately compensated for the
       additional time required due to:
 
          a.  the assignment of applications in an unfamiliar art area.
 
          b.  the transfer of amended applications from another
       examiner's docket.
 
          c.  changes in examining practices or procedures since the goal
       was assigned.
 
          4.  Disruptions have been caused by extensive non-examining
       time, irregular authorization of overtime, changes in clerical
       support or workload/workflow, directed emphasis on new case or
       disposal production, etc. where the disruptions have affected
       productivity.
 
          a.  An examiner coming back from a 4 to 6 month detail will
       probably have very little amended activity in the pipeline.  It is
       obvious that 5 to 12 months will be required before any volume of
       amendments will be built up.  This could, and probably would,
       impact on the examiner's production since his emphasis would be on
       new cases which normally require more time.
 
          b.  If an examiner has one or more reissue in litigation cases
       with one or more protest and a variety of issues, the time
       remaining to work on his docket could, and probably would, impact
       on the examiner's ability to meet his expectancy.
 
    If an examiner has not been assigned sufficient new applications to
 meet his assigned goal, the examiner's assigned goal will be adjusted to
 account for the insufficiency.
 
    A balanced disposal or BD is defined to be BD equals (N+D)/2 where N
 is the number of first actions on the merits only and D is the number of
 disposals.  The time spent writing all restriction requirements which do
 not include an action on the merits will be considered nonexamining
 time.
 
    G.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable, and reasonable manner, the
 supervisor shall authorize the taking of other time in accordance with
 the following:
 
    It shall be unreasonable to evaluate the quantity of patent examining
 performed without accurately determining the actual amount of time spent
 performing those aspects of patent examining that are measured.  Thus,
 in addition to the times for which patent examiners have been authorized
 in fiscal year 1981 to take non-examining time on the PTO-690E form,
 examiners will be authorized to take non-examining time for the time
 actually spent on:
 
          1.  actions required because a petition was granted even though
       the examiner followed proper procedures;
 
          2.  reviewing the Official Gazette and the technical literature
       for the purpose of adding patents and publications to the search
       files unless the supervisor determines that the added patents and
       publications are not useful;
 
          3.  consultations by the examiner from whose docket new or
       amended applications have been transferred regarding those
       transferred applications.
 
          4.  duties required by changes in examining practice since the
       goals were assigned.
 
          5.  the assistance of fellow examiners in searches, legal
       issues, and procedural issues.
 
          6.  the assistance of members of the public with searches and
       applicant-initiated interviews.
 
    H.  In order to implement the performance standard of production goal
 achievement in an accurate, equitable, and reasonable manner, the
 supervisor shall assign the production goal rating as follows:
 
    The examiner's production goal rating shall be assigned in accordance
 with the performance levels set forth in Article VII, Section 2 of the
 Agreement of December 13, 1972 between the Commissioner of Patents and
 Trademarks and the Patent Office Professional Association.
 
    (Article VII, Section 2 of the Agreement provides, in part:
 
    An achievement of at least 75% of an assigned goal shall be deemed
 prima facie evidence of an acceptable level of competence on the factor
 of production for purposes of granting a within-grade increase unless
 adequate written justification is given to the employee that the
 achievement level on the factor of production is insufficient.)
 
                       . . . . .
 
 
    Section 11.  Performance appraisal -- General
 
                       . . . . .
 
 
    B.  At the annual performance appraisal, employee's performance shall
 be classfied into one of the following four overall rating categories:
 
    Overall Rating . . . . . Criteria
 
    OUTSTANDING:  Performance is outstanding in one critical element.
 For patent examiners, outstanding performance in the critical element of
 patent examining requires outstanding performance in one of the
 performance standards of patentability determination, action taking, or
 production goal achievement.
 
    SATISFACTORY:  Performance is at least satisfactory in each critical
 element.
 
    MARGINAL:  Performance is marginal in at least one critical element.
 Marginal performance merits the denial of a within grade increase.  For
 patent examiners, marginal performance in the critical element of patent
 examining requires marginal performance in the performance standard of
 production goal achievement.
 
    UNACCEPTABLE:  Performance is unacceptable in at least one critical
 element.  Unacceptable performance merits one of the corrective actions
 of (a) reassignment and the denial of a within grade increase, (b)
 reduction in grade, or (c) removal.  For patent examiners, unacceptable
 performance in the critical element of patent examining requires
 unacceptable performance in at least one of the performance standards of
 patentability determination, action taking, or production goal
 achievement.
 
                       . . . . .
 
 
    D.  For all evaluations, only actions taken or not taken during the
 period under consideration will be evaluated and an employee will not be
 adversely evaluated for any error which he has corrected prior to the
 evaulation.
 
    E.  Noncritical performance elements will not be considered in
 determining whether an employee deserves a denial of a within grade
 increase or an unacceptable rating or any other form of disciplinary
 action.  The noncritical performance elements may be considered for all
 other evaluation purposes such as in considering an employee for an
 award or for a promotion.  For patent examiners, the timeliness standard
 under patent examining will be treated the same as a noncritical
 performance element.
 
                       . . . . .
 
 
    Section 22.  Transition procedures
 
                       . . . . .
 
 
    B.  The standards for granting within grade increases that were in
 existence on October 1, 1980 shall remain in effect for each employee
 until after he becomes eligible for his first within grade increase on
 or after October 1, 1981.
 
                                APPENDIX B
 
    7.  On July 9, 1976, the parties agreed to amend their agreement of
 December 13, 1972, as extended by the extension agreement of October 24,
 1975, by adding, as relevant herein, the following to Article VII,
 Section 2:
 
    Insofar as purely quantitative criteria are concerned, an
 individual's goal shall have the following meaning and effect:
 
          1.  An achievement of 110% of a goal over a period of twelve
       consecutive months shall be deemed prima facie evidence of
       sufficiently outstanding performance on the factor of production
       to warrant the grant of a quality step increase, except where the
       individual has been promoted during the twelve month period, in
       which case the twelve month period runs from the date of
       promotion.
 
          2.  An achievement of 110% of a goal over a period of six
       consecutive months shall be deemed prima facie evidence of
       sufficiently exceptional performance on the factor of production
       to warrant the grant of a special achievement award, except where
       the individual has been promoted during the six month period, in
       which case the six month period runs from the date of the
       promotion.
 
          3.  An achievement at least half-way between the goal for the
       next higher grade and the goal for the present grade over a period
       of six months shall be deemed prima facie evidence of performance
       on the factor of production qualifiying for a promotion in
       accordance with Article IX, Section 8 of this agreement.
 
          4.  An achievement of at least 75% of an assigned goal shall be
       deemed prima facie evidence of an acceptable level of competence
       on the factor of production for purposes of granting a
       within-grade increase unless adequate written justification is
       given to the employee that the achievement level on the factor of
       production is insufficient.  An achievement below 75% of an
       assigned goal shall be deemed prima facie evidence that the level
       of competence on the factor of production is not acceptable for
       the purposes of granting a within-grade increase unless there are
       extenuating circumstances which justify the achieved production
       level.
 
    Quantitative criteria are only some of the factors to be considered
 in evaluating the performance of a member of the Unit.  All other
 evaluation and classification factors, including quality, and any
 extenuating circumstances must also be considered.
 
    Appendix C to the Union's Petition for Review in Case No. 0-NG-589.
 
    10.  5 U.S.C. Section 5335(a) provides that an employee in the
 General Schedule shall be advanced to the next higher within-grade rate
 at certain intervals provided, among other things, the work of the
 employee is of an "acceptable level of competence." "Acceptable level of
 competence" is defined in 5 CFR 531.403 and 404 as follows:
 
    Section 531.403 Definitions.
 
    In this subpart:
 
    "Acceptable level of competence" means fully successful performance
 by an employee of the duties and responsibilities of his or her assigned
 position which warrants advancement of the employee's rate of basic pay
 to the next higher step of the grade of his or her position, subject to
 the requirements of Section 531.404 of this subpart.
 
                       . . . . .
 
 
    Section 531.404 Earning within-grade increase.
 
    An employee paid at less than step 10 of the grade of his or her
 position shall earn advancement in pay to the next higher step of that
 grade upon meeting the three requirements established by law:
 
          (a) To earn a within-grade increase, the employee's performance
       of assigned work must be at an acceptable level of competence, as
       defined in this subpart by authority of Section 402 o