29:1389(116)NG - PATENT OFFICE PROFESSIONAL ASSOCIATION VS COMMERCE, PATENT AND TRADEMARK OFFICE



[ v29 p1389 ]
29:1389(116)NG
The decision of the Authority follows:


 29 FLRA NO. 116

PATENT OFFICE PROFESSIONAL
ASSOCIATION

                        Union

       and

PATENT AND TRADEMARK OFFICE
DEPARTMENT OF COMMERCE

                        Agency

Case No. 0-NG-1145

DECISION AND ORDER ON NEGOTIABILITY ISSUES

I. Statement of the Case

This case is before the Authority because of a negotiability appeal filed under section 7105(a)(2)(E) of the Federal Labor-Management Relations Statute (the Statute). It concerns the negotiability of 14 proposals. For the reasons discussed below, we conclude that Proposals 2, 4, 6, 8, 9, 10, 13, 14, and the third sentence in Proposal 1 are outside the duty to bargain. The first sentence in Proposal 1, Proposals 3, 5, 7, and 11 are negotiable. Additionally, we note that Proposal 12 is found to be negotiable in a separate opinion (Chairman Calhoun concurring).

II. Proposal I

Section 3.C. Prior to the establishment or substantive modification of any performance appraisal plan the following procedure will be used:

1. When the proposed performance appraisal plan applies to no more than fifteen employees, the supervisor shall hold a meeting with the involved employees so that the employees can provide input on the plan. POPA shall be provided an opportunity to have a representative present at this meeting. The supervisor shall make a written report providing reasons for rejecting any suggestions prior to establishment or modification, or negotiations, if the proposal involved negotiable subject matter. (Only the first and third sentences are in dispute.)

A. Positions of the Parties

The Agency contends that the proposal directs employees' immediate supervisors to perform certain functions. There-fore, the Agency asserts that it is inconsistent with section 7106(a)(2)(B) of the Statute, which reserves to management the authority to assign work.

The Union argues that 5 U.S.C. 4302(a)(2) requires employee participation in developing performance standards. Thus, the Union asserts that Proposal 1 provides a procedure, within the meaning of section 7106(b)(2) of the Statute, to implement 5 U.S.C. 4302(a)(2). Further, according to the Union, the use of the term "the supervisor" in the proposal is intended to designate individuals who perform supervisory functions rather than a particular level in supervision, such as the employee's immediate supervisor.

B. Analysis and Conclusion

1. First Sentence in Proposal 1

The first sentence in Proposal 1 would require that "the supervisor" hold a meeting with employees to discuss proposed performance appraisal plans when plans apply to no more than 15 employees. Accepting the Union's statement of intent regarding the term "the supervisor," we find that it designates any individual in supervision who performs supervisory tasks. Based on this understanding, the first sentence in Proposal 1 would require that the Agency assign someone in supervision to meet with employees concerning the establishment of performance standards.

In National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769, 778 (1980), aff'd sub non. NTEU V. FLRA, 691 F.2d 553 (D.C. Cir. 1982), the Authority stated that 5 U.S.C. 4302(a)(2) "encouraged employee participation in establishing performance standards" but did not specify the form which such employee participation must take. Thus, the Authority found that the manner in which a particular agency provides for such employee participation was within that agency's discretion and within the duty to bargain to the extent that it would not prevent the agency from exercising its right to establish performance standards and critical elements, that is, its rights under section 7106(a)(2)(A) and (B) to direct employees and to assign work. Based on its decision in Bureau of the Public Debt, the Authority determined in National Federation of Federal Employees, Local 1430 and Department of the Navy, Northern Division, U.S. Naval Base, Philadelphia, Pennsylvania, 15 FLRA 45 (1984), that Proposal 1 in that case which required, among other things, that the identification and establishment of performance standards would be a "joint planning communication process between the employee and the aid of the steward and the supervisor" was negotiable. The Authority found that Proposal 1 in that case did not prevent the agency from establishing performance standards but rather, was concerned with the manner in which the agency would provide for employee participation in the establishment of those performance standards.

Similarly, the first sentence of Proposal 1 in this case also concerns the manner in which the Agency will meet the requirement of 5 U.S.C. 4302(a)(2) to include employee participation in the establishment of performance standards. Further, the form of the employee participation required by the first sentence of this proposal is entirely consistent with Government-wide regulations promulgated by the Office of Personnel Management (OPM) implementing 5 U.S.C. 4302(a)(2). For example, 5 C.F.R. 430.204(c)(1)(1987) provides that employee participation in the development of performance standards may be achieved by several means, specifically including that "(e)mployee and supervisor discuss and develop performance plan together." In addition, the Federal Personnel Manual (FPM) states that employee participation may be accomplished by discussions between "a representative sample of employees and their supervisors." FPM chapter 430, subchapter 2-3.d. Thus, the requirement that supervisors be involved in a joint process with employees or their representatives in the development of performance standards results from the application of statute and implementing Government-wide regulations and not from the first sentence of this proposal.

Moreover, the first sentence of this proposal does not specify the form of participation or assign any particular tasks. Therefore, contrary to the Agency's contention, we find that the first sentence of Proposal 1 does not violate the Agency's right under section 7106(a)(2)(B) to assign work. Thus, the first sentence is within management's duty to bargain.

In holding the first sentence of Proposal 1 to be negotiable, we note that it does not prevent management designating other Agency officials to participate in meetings regarding proposed performance appraisal plans or in any manner prevent the Agency from establishing performance standards.

2. Third Sentence in Proposal 1

As contrasted with the first sentence of Proposal 1, the third sentence of the proposal requires that a supervisor make a written report giving reasons for rejecting employee suggestions regarding performance standards. Thus, it would require that the Agency assign to a supervisor a specific task not otherwise required by the law and regulations governing employee participation in the establishment of performance standards.

It is well-established that proposals which require management to assign specific tasks to particular individuals, including supervisors, are nonnegotiable because they interfere with management's right to assign work under section 7106(a)(2)(B). See, for example, American Federation of Government Employees, AFL-CIO, Local 1858 and U.S. Army Missile Command, the U.S. Army Test, Measurement, and Diagnostic Equipment Support Group, the U.S. Army Information Systems Command-Redstone Arsenal Commissary, 27 FLRA 69 (1987) (Provisions 6, 8, and 10), petition for review filed sub nom. U.S. Missile Command U.S. Army Test, Measurement, and Diagnostic Equipment Support Group, U.S. Army Information Systems Command-Redstone Arsenal Commissary v. FLRA, No. 87-7445 (11th Cir. July 17, 1987). Therefore, since the third sentence in Proposal 1 would require the Agency to assign a specific task to a supervisor, it is nonnegotiable. However, this defect is easily cured by deleting the reference to a particular management official. U.S. Army Missile Command at 81 (1987).

In conclusion, we hold that the first sentence in Proposal 1 is within the duty to bargain as it is consistent with the statutory and regulatory provisions that supervisors meet with employees in developing performance standards. We find the third sentence nonnegotiable because it interferes with management's right to assign work under section 7106(a)(2)(B) of the Statute.

III. Proposal 2

Section 3.E. Accuracy. All performance standards and applications of the standards to the individual's work shall permit the accurate evaluation of job performance to the maximum extent feasible as required by 5 U.S.C. 4302(b)(1).

Performance standards must be fair, equitable and reasonable to permit the accurate evaluation of job performance. (Only the underscored sentence is in dispute.)

A. Positions of the Parties

According to the Agency, the proposal would subject the content of performance standards to arbitral review. Thus, the Agency concludes that it violates management's right to assign work and direct employees under section 7106(a)(2)(A) and (B) of the Statute.

The Union contends that the underscored portion of Proposal 2 is intended to clarify the meaning of the accuracy requirement for performance standards in 5 U.S.C. 4302(b)(1). The Union denies that the proposal would subject the content of performance standards to arbitral review.

B. Analysis and Conclusion

We find that the disputed portion of Proposal 2 concerns the content of performance standards. This conclusion is supported by the Union's statement that "(c)ontractual provisions which prevent only unfairness in the application of performance standards are inadequate to prevent management abuse." Petition for Review at 3 and Reply Brief at 4. Furthermore, the Union states that it believes that "the criteria of fair, equitable and reasonable are necessary elements of any standard that will promote the accurate evaluation of job performance." Id. In view of its statements, the Union's assertion that under this proposal the content of a performance standard would not be subjected to arbitral review is unconvincing.

Therefore, we conclude that Proposal 2 is nonnegotiable because it constitutes general criteria governing the content of a performance standard. Moreover, enforcement of a general, substantive criterion would permit arbitrators to substitute their judgment as to the content of performance standards which management should adopt. Patent Office Professional Association and Patent and Trademark Office, Department of Commerce, 25 FLRA 384, 386-87, 395-96 (1987) (Proposal Section 3.K.), petition for review filed sub non. Patent Office Professional Association v. FLRA, No. 87-1135 (D.C. Cir. Mar. 26, 1987). See also American Federation of Government Employees, AFL-CIO, Local 1603 and U.S. Naval Hospital, Patuxent River. Maryland, 22 FLRA 567 (1986) (proposal which permitted arbitrators to determine whether performance standards were fair and reasonable held nonnegotiable). Based on the cases and reasoning above, we hold that Proposal 2 interferes with management's right to determine the content of performance standards, and thus its right to assign work and direct employees. Proposal 2 is, therefore, outside the duty to bargain.

IV. Proposal 3

Section 3.I. After the validations described in the immediately preceding subsection H. have been completed, management shall publish in the Official Gazette the proposed performance appraisal plans and a POPA analysis thereof. (Only the underscored portion is in dispute.)

A. Positions of the Parties

The Agency's sole contention concerning the disputed portion of Proposal 3 is that it does not concern conditions of employment within the bargaining unit under section 7103(a)(14) of the Statute. Moreover, according to the Agency, the Union's desire to inform the public about employee performance matters is not within the duty to bargain.

The Union responds that the proposal is a condition of employment for two reasons: (1) the Gazette is routinely used by the Agency to distribute information important to unit employees; and (2) because the Gazette is distributed to the Agency's clientele, "publication of the performance appraisal plans can be used to enhance the prestige and status, and hence job satisfaction, of our unit employees."

B. Analysis and Conclusion

Proposal 3 would require that the Agency use the Official Gazette to publish proposed performance plans and the Union's analysis of those plans. Under the Statute, the obligation to bargain extends only to matters directly affecting the conditions of employment of bargaining unit employees.

The determination of whether a proposal pertains to a condition of employment involves the application of two factors set forth by the Authority in Antilles Consolidated Education Association and Antilles Consolidated School System, 22 FLRA 235 (1986). These factors are:

(1) Whether the matter proposed to be bargained pertains to bargaining unit employees; and

(2) The nature and extent of the effect of the matter proposed to be bargained on working conditions of those employees.

1. Proposal Focuses on Bargaining Unit Employees

While the Patent Office's Official Gazette is used primarily to communicate technical patent and trademark information to patent practitioners, matters that are important to bargaining unit employees, such as information relating to the operation of the Patent Office, also have appeared in the publication. For example, a notice concerning personnel reorganization and relocation was published in the Gazette.

It is not disputed that the Gazette is widely distributed at the Patent Office and easily available to bargaining unit employees. Agency's Statement of Position at 5. Therefore, we conclude that including the Agency's proposed performance plans and the Union's analysis of the plans in the Gazette would inform bargaining unit employees about performance appraisal plans. See, for example, Congressional Research Employees Association and Library of Congress, Congressional Research Service, 25 FLRA 306, 316 (1987) (Proposals 3-5) (proposal's indirect effect on nonunit employees does not render proposal nonnegotiable where proposal directly affects bargaining unit employees); American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA 377, 384-86 (1986) (proposals' indirect effect on conditions of employment outside the bargaining unit does not render otherwise negotiable proposals nonnegotiable).

2. Proposal Directly Affects Working Conditions of Bargaining Unit Employees

The Agency's sole argument is that the proposal does not concern conditions of employment of bargaining unit employees. According to management, other means of communication, such as "All Employee" memorandum and bulletins, exist to inform employees about matters of concern. However, it is clear that the development of performance appraisal plans directly affects the employment relationship of bargaining unit employees. Moreover, communication of performance plans is critical to performance appraisal systems. See, 5 U.S.C. 4302(b)(2) (requiring that performance appraisal systems provide for communication of the performance standards and the critical elements of the employee's position to the employee). Thus, rejecting the Agency's argument, we conclude that use of the Official Gazette to inform bargaining unit employees about proposed performance plans and the Union's analysis of the plans directly affects a condition of employment of these employees.

In conclusion, we find that publication of the Agency's proposed performance plans and the Union's comments on the plans is within the duty to bargain because it directly affects the employment relationship of bargaining unit employees.

V. Proposal 4

Section 5.A. 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 only to the extent appropriate to their level of responsibility under the Patent Examiner Position Classification factors 1 and 2.

A. Positions of the Parties

According to the Agency, by including the current standard in its proposal, the Union is effectively seeking to negotiate over the content of performance standards. The Agency contends that the proposal's second sentence restricts management's discretion to establish performance standards by equating the evaluation of examiners to the levels described in the controlling position classification standard.

The Union asserts that the first sentence of the proposal merely reflects current Agency practice in describing performance standards from the perspective of an examiner with signatory authority. The second sentence, the Union contends, does not concern the content of performance standards. Rather, it involves the application of the patent examiner performance standard when it is used to evaluate employees below the full performance level in a career ladder.

B. Analysis and Conclusion

It is well established that proposals establishing a general, nonquantitative requirement by which management's application of its performance standards can be judged in a subsequent grievance proceeding are within the bargaining obligation. On the other hand, proposals which establish general criteria governing the content of a performance standard restrict management's authority to establish standards and are therefore inconsistent with its rights to assign work and direct employees under section 7106(a)(2)(A) and (B) of the Statute. Patent and Trademark Office, 25 FLRA 384, 385-86 (1987).

1. First Sentence in Section 5.A.

We find that the first sentence in Proposal 4 seeks to negotiate the content of performance standards. 1

Specifically, it relates to the perspective from which the performance standards for patent examiners are described.

Assuming that the first sentence accords with the Agency's current practice in describing patent examiners' performance standards, the presence of that sentence in a negotiated agreement would oblige management to negotiate over any revision to the standards which conflicts with the sentence. Despite the Union's argument to the contrary, the first sentence interferes with management's right to establish and revise performance standards, since the exercise of the right must necessarily include the power to modify or discontinue the current practice. See, Patent and Trademark Office at 402-03 (Proposals Sections 4.H. and 4.I.). See also National Association of Air Traffic Specialists and Department of Transportation, Federal Aviation Administration, 6 FLRA 588 (1981) (Proposals I-III).

2. Second Sentence in Section 5.A.

According to the first sentence in Section 5.A., the patent determinability performance standards are written from the perspective of patent examiners with full signatory authority. When applying these standards to patent examiners with less than full signatory authority, the second sentence of Section 5.A. would require that management consider the lesser degree of expertise, independence, and responsibility of these examiners. In this respect, the second sentence of Section 5.A. is to the same effect as the proposal in Section 9.B. in Patent and Trademark Office at 408-09. Section 9.B. in that case provided that where the agency assigned a patent examiner an application with which that examiner was unfamiliar, management was required to adjust the production goal which it would normally establish for the application.

In Patent and Trademark Office, we found that the proposal required management to change the production goal which it had established for the type of work involved and adopt a different standard. Thus, we concluded that Section 9.B. in that case was outside the duty to bargain because it mandated the content of a performance standard and thus interfered with management's rights to direct employees and assign work. Like the proposal in Section 9.B. in Patent and Trademark Office, Proposal 3 in this case interferes with management's rights because it would require that the Agency alter performance standards of patentability determination and action taking for patent examiners having less than full signatory authority.

In summary, we find that both sentences in Proposal 4 conflict with reserved rights to assign work and direct employees under section 7106(a)(2)(A) and (B) of the Statute by interfering with management's right to establish performance standards. Consequently, Proposal 4 is outside the duty to bargain.

VI. Proposal 5

Section 5.C. The following procedure will be used to evaluate for promotion examiners who are at grades GS-12 and below:

1. Determine whether the examiner has made a patentability determination error or action taking error.

2. Determine the action and the examining function that was the cause of the error.

3. Determine the degree to which the examiner would be responsible for that function after promotion under the Position Classification factors. The examiner would be fully responsible only if the examiner at his or her current grade, receives no preliminary instruction and only cursory review for the action or function that was the cause of the error. The examiner would be responsible for a partial error if the examiner at his or her current grade, receives no preliminary instruction and close review for the action or function that was the cause of the error.

4. An error point total less than the number of full errors required to rate a full signatory examiner as marginal shall be prima facie evidence that the career ladder promotion is warranted.

(Only the underscored sentences are in dispute.)

A. Positions of the Parties

The Agency contends that the "partial error" concept in Proposal 5 substantively interferes with its right to establish performance standards. Hence, the proposal violates rights reserved to management by section 7106(a)(2)(A) and (B) of the Statute.

The Union asserts that the Agency has misread the proposal. According to the Union, the proposal establishes criteria to be used solely in assessing employees' promotion potential and does not affect any performance standard. The proposal would require that management examine an employee's first submission of completed work to generate evidence of an ability to perform at the next higher level.

B. Analysis and Conclusion

Contrary to the Agency's contention, we find that the proposal does not concern performance standards. Rather, Section 5.C.3. in Proposal 5 establishes a criterion for determining the degree of responsibility for errors which would be used in evaluating patent examiners, who are below the full performance level, for promotion. Viewed in light of the Union's explanation, which is consistent with the proposal's language, we conclude that Proposal 5 is to the same effect as Proposal 2 in National Treasury Employees and NTEU Chapter 72 and Internal Revenue Service, Austin Service Center, 11 FLRA 271, 273 (1983) (Proposal 2), which sought to establish a level of productivity for use in evaluating an employee's potential for promotion to the next higher grade in a career ladder position. In finding Proposal 2 to be within the duty to bargain, the Authority found that existing law did not prevent the development of criteria for assessing promotion potential apart from the performance evaluation criteria. The Authority concluded that the proposal did not infringe on the rights to direct employees and assign work because the criterion established in Proposal 2 in Austin Service Center merely served as a guideline for predicting employee performance at the higher grade level rather than as a standard of productivity for the current level.

Similarly, we find that Proposal 5 is a procedure to be used in evaluating whether an employee would be able to perform at a higher grade level. Based on the reasons and cases cited in Austin Service Center, Proposal 5, which would also establish a criterion for determining promotion potential, is within the duty to bargain.

VII. Proposal 6

Section 16.A. General. After an employee has completed his probationary year, performance-based disciplinary actions shall not be based on short term performance periods. A performance period is short term unless the performance is averaged over a period of at least twelve consecutive months. (Only the underscored sentence is in dispute.)

A. Positions of the Parties

The Agency contends that Proposal 6 interferes with management's right to assign work and direct employees by requiring that an employee's performance be averaged for twelve months before management may take an action. The Agency argues that averaging performance prevents management from taking performance-based actions by enabling an employee to work voluntary overtime for a period of time to improve overall performance to an acceptable level.

The Union characterizes its proposal as a procedure to be followed by management in exercising its rights to discipline, direct, and assign work to employees. According to the Union, the time frame in the proposal would permit more accurate assessment of performance.

B. Analysis and Conclusion

We find this proposal nonnegotiable, but not for the reasons asserted by the Agency. Proposal 6 would, in effect, prevent management from taking disciplinary action against an employee based on unacceptable performance unless it could be established that the employee's performance, over a period of at least 12 months prior to the decision to take disciplinary action was, on average, unacceptable.

Regulations governing actions for unacceptable performance permit agencies to take performance-based adverse actions "at any time during the performance cycle that the employee's performance in one or more critical elements of the job becomes unacceptable." 5 C.F.R. 432.203(a). Thus, action may be taken whenever performance falls to an unacceptable level without assessing an employee's "average" performance over a particular period of time. As these regulations apply to the Federal workforce as a whole, they are Government-wide regulations within the meaning of section 7117(a)(1) of the Statute. See National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 748, 751-55 (1980). Since Proposal 6 would require that management "average" an employee's performance over a year, it conflicts with a controlling Government-wide regulation. Consequently, Proposal 6 is outside the duty to bargain under section 7117(a)(1) of the Statute based on the reasons and cases discussed above. In view of our decision finding Proposal 6 nonnegotiable, it is unnecessary to reach the Agency's contention that the proposal violates management's right to assign work and direct employees.

VIII. Proposal 7

Section 16.D. Warning. A written notice of opportunity to improve must be given to an employee before the employee can be rated either marginal or unacceptable. . . .

The written notice must contain the following:

3. A specified improvement period during which the employee's performance should improve. The specified improvement period will be seven pay periods unless the employee and his supervisor agree on a different specified improvement period of at least three pay periods. (Only the underscored portion is in dispute.)

A. Positions of the Parties

The restriction on the length of the opportunity period imposed by Proposal 7, according to the Agency, interferes with management's section 7106(a)(1) right to "retain" employees. The Agency specifically cites a situation in which an employee's project requires more than 7 pay periods to complete. If an evaluation were required before the project's completion, the Agency claims that management would not have afforded an employee a reasonable opportunity to demonstrate acceptable performance.

The Union contends that Proposal 7 is intended to address a common employee complaint that opportunity periods are too short. Furthermore, the Union adds that because a reasonable opportunity to improve is a substantive employee right, management could not unreasonably withhold its agreement if an employee desired an opportunity period longer than 7 weeks.

B. Analysis and Conclusion

Initially, we note that both parties treat this proposal as applicable only to actions pursued under 5 U.S.C. 4303, and not to performance-based actions taken under 5 U.S.C. 7512. An action against an employee for unsatisfactory performance may be taken at any point in the appraisal cycle following an evaluation of an employee's performance. See 5 C.F.R. 432.203(a). However, before management may initiate a performance-based action against an employee for unsatisfactory performance, management must first provide the employee with reasonable time to demonstrate acceptable performance. 5 U.S.C. 4302(b)(6) (Supp. II); 5 C.F.R. 432.101(a). The length of the "reasonable time" to demonstrate acceptable performance is not established by regulation but is left to agency discretion. In fact, OPM has indicated that the length of the period of time considered reasonable may be negotiated. See Attachment to FPM Letter 432-1, III.10. at 3 (May 5, 1983).

In this case, Proposal 7 would require the Agency to notify an employee when an employee's performance has been determined to be marginal or unacceptable and to provide the employee with at least 3 pay periods and as many as 7 pay periods to improve performance before a marginal or unacceptable rating is given. We do not construe Proposal 7 as requiring the Agency to agree to an opportunity period longer than 7 pay periods.

As previously set forth, the Agency's sole objection to this proposal concerns the length of the improvement period. However, the length of the improvement period for an employee to demonstrate acceptable performance before a performance-based adverse action may be instituted for unsatisfactory performance is clearly subject to negotiation. Thus, the Agency's claim that this proposal interferes with its right under section 7106(a)(1) to retain employees cannot be sustained. See National Federation of Federal Employees, Local 1853 and U.S. Attorney's Office, Eastern District of New York, Brooklyn, N.Y., 29 FLRA No. 10, slip op. at 8-12 (1987) (Provision 4).

In addition, we do not view the extension of the negotiated improvement period to cover employees whose performance was determined to be marginal, as being fatal to the negotiability of Proposal 7. While applicable law and regulation only require an improvement period for employees whose performance is unsatisfactory, there is nothing in law or regulation which precludes an improvement period for employees whose performance is marginal.

While this proposal applies solely to actions under 5 U.S.C 4303, as we noted above, an agency is not required to use this procedure exclusively. Instead, the agency may choose to take a performance-based action under 5 U.S.C. 7512. Lovshin v. Department of Navy, 767 F.2d 826 (Fed. Cir. 1985), cert. denied 106 S.Ct. 1523 (1985), rehearing denied 106 S.Ct. 2931 (1985). The Merit Systems Protection Board (MSPB) has stated that under Chapter 75 there is no express provision that requires an agency to afford an employee a period of time to improve performance before management effects a performance-based action. MSPB declined to provide a right not enacted by Congress. Fairall v. Veterans Administration, 34 MSPR 289 (1987).

In conclusion, we find that Proposal 7 is within the duty to bargain as the Agency has discretion to determine the length of the opportunity period to improve performance.

IX. Proposal 8

Section 16.E.2. If an employee is to be reduced in grade, the reduction shall be to the highest level for which the employee would be considered minimally acceptable. If the alleged unacceptable performance is in the quantitative area, the demotion will be to the fifth step of the highest grade in which the quantitative performance would be considered acceptable unless the change is to a position of a type in which the employee formerly rendered satisfactory service in which case he will be paid the rate he would have received had his service in the lower grade been continuous. (Only the underscored sentence is in dispute.)

A. Positions of the Parties

The Agency contends that an integral part of its right to direct employees is to establish a system of rewards and sanctions for employee performance. According to the Agency, Proposal 8 would limit the financial impact of performance-based demotions and therefore would interfere with underlying management rights. Moreover, the Agency asserts that in certain circumstances, an employee demoted to the fifth step of the highest grade in which the quantitative performance would be considered acceptable could actually receive a higher rate of pay after the demotion.

The Union asserts that Proposal 8 is intended to implement the Agency's regulation regarding demotions for unacceptable performance and as an appropriate arrangement for employees adversely affected by management's right to impose discipline. According to the Union, a situation could not arise under the bargaining unit's professional grade structure in which an employee would profit from a demotion.

B. Analysis and Conclusion

Proposal 8, in effect, would limit the penalty the Agency may impose when an employee is demoted for unacceptable performance by requiring that a demotion be to the fifth step of the highest grade in which the quantitative performance would be considered acceptable. In this regard, Proposal 8 is similar in effect to section 1(a) of Provision 22 in International Plate Printers, Die Stampers and Engravers Union of North America, AFL-CIO, Local 2 and Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 25 FLRA 113, 129-34 (1987) (Provisions 22 and 23). In that case, section 1(a) of Provision 22 limited the Agency to the use of formal disciplinary measures--such as official reprimands, suspensions, and removals--only for "more serious offenses" or when informal disciplinary actions had not been effective. We found that the proposal substantively limited the agency's discretion to impose discipline and thus that it directly interfered with the agency's right to discipline employees. Id. at 132.

Similarly, Proposal 8 in this case would eliminate the Agency's discretion to decide the appropriate grade for an employee whose performance was unacceptable. Therefore, Proposal 8 directly interferes with management's right to take action for unacceptable performance. See also American Federation of Government Employees, AFL-CIO, Local 2302 and U.S. Army Armor Center and Fort Knox, Fort Knox, Kentucky, 19 FLRA 778 (1985) (Proposal 1).

The Union's position that its proposal is a negotiable appropriate arrangement for employees adversely affected by a performance-based action within the meaning of section 7106(b)(3) of the Statute cannot be sustained. Recently, we considered a provision in American Federation of Government Employees, AFL-CIO, National Immigration and Naturalization Service Council and U.S. Immigration and Naturalization Service, 27 FLRA 467, 480-82 (1987) (Provision 6) in which a union also argued that a restriction on management's right to take action for unacceptable performance was an appropriate arrangement. Provision 6 in U.S. Immigration and Naturalization Service required an agency to reassign employees whose performance was unacceptable to positions at the same grade level. Relying on National Labor Relations Board Union and National Labor Relations Board, Office of the General Counsel, 18 FLRA 320 (1985), we found that the provision directly interfered with management's right to determine its course of action when it determined that an employee's performance was unacceptable. Thus, we held that the provision in that case was not a negotiable procedure under section 7106(b)(2). Additionally, we found that the provision was not an appropriate arrangement because, in addition to restricting management's actions in response to unacceptable performance, it also prevented management from determining whether to fill vacancies. We concluded that Provision 6 in U.S. Immigration and Naturalization Service, excessively interfered with management's rights and held it outside the duty to bargain under section 7106(a)(2)(A).

In a similar manner, Proposal 8 in this case would restrict the Agency's discretion to determine an appropriate reduction in grade when an employee's performance is unacceptable. Furthermore, as we read Proposal 8, in order to effect a reduction in grade, the Agency would be required to relinquish its discretion to determine whether to fill the vacancy that would be appropriate under the proposal. We conclude that the negative effect of these restrictions on the Agency, particularly its inability to determine an appropriate reduction in grade, outweigh the benefit to employees from a limitation on the penalty for unsatisfactory performance. Thus, Proposal 8 excessively interferes with management's right to impose discipline under section 7106(a)(2)(A). Therefore, it is not a negotiable appropriate arrangement within the meaning of section 7106(b)(3).

X. Proposal 9

Section 16.F.2. Overcoming the warning effect of a marginal or unacceptable rating. Even if an employee's most recent annual performance rating was marginal or unacceptable, the employee will be entitled to his within grade increase at the end of the waiting period if either (1) his average performance over the waiting period is at least satisfactory and his current performance is at least marginal or (2) the performance was justified by unusual circumstances. Current performance is performance over the most recent six month period. Unusual circumstance are synonymous with extenuating circumstances which may be either job related circumstances or temporary personal circumstances such as an illness, a death in the family or marital problems. (Only the underscored sentences are in dispute.)

A. Positions of the Parties

The Agency contends that the proposal requires bargaining over the quality of performance required to attain an acceptable level of competence, which is a matter excluded from the bargaining table by Authority decisions. The Agency also asserts that the part of the proposal granting an employee a within-grade increase because of extenuating circumstances is contrary to Government-wide regulations.

The Union states that the proposal seeks to implement the Government-wide regulation defining an acceptable level of competence. The Union asserts that "satisfactory" as used in the proposal is intended to be synonymous with acceptable level of competence. Also, the Union declares that "marginal" is intended to mean a level of performance which is acceptable in all critical elements.

B. Analysis and Conclusion

1. The Proposal Violates Government-wide Regulations

Both parties expressly acknowledge that regulations governing within-grade increases are Government-wide within the meaning of section 7117(a)(1) of the Statute, and the Authority has so held. National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 748, 754 (1980).

The regulations applicable in this case, require that an employee attain a summary overall rating of "fully successful" in order to be eligible for a within-grade increase. 5 C.F.R. 531.404(a)(1987). The regulations fully support the Union's suggestion that "satisfactory" as used in the proposal may be equated with the regulatory term "fully successful." However, there is no evidence that "marginal" is susceptible to the same interpretation. In the context of the proposal, "marginal" may reasonably be construed as meaning something other than "satisfactory" because the words both appear in the same sentence and therefore convey the impression that the two words have different meanings.

In the absence of convincing evidence to the contrary, we must conclude that "marginal" is intended to convey its ordinary and customary meaning. The definition in The American Heritage Dictionary of the English Language, New College Edition, (1981) most relevant in the context of the Union proposal, defines "marginal" as: "Barely within a lower standard or limit of quality." Hence, "marginal" cannot reasonably be equated with "fully successful." The proposal is therefore in conflict with the regulatory requirement that eligibility for a within-grade increase be based on a summary rating of "fully successful."

The proposal's demand that performance requirements be waived in "unusual circumstances" also conflicts with governing regulations. The Union contends that this matter is addressed in the proposal because the regulation uses the term "unusual circumstances" without further elaboration. To avoid uncertainty, the Union included a definition of that term in its proposal. However, the current regulations do not include such a term. Consequently, we conclude that eligibility for a within-grade increase must be based exclusively on performance.

2. The Proposal Interferes with Management's Statutory Rights

Proposal 9 is materially to the same effect as the proposal in Section 9.H. in Patent and Trademark Office, 25 FLRA 384, 414-15 (1987) (Proposal Section 9.H.). That proposal established a level of performance, specifically 75 percent of the assigned production goal, at which management was required to grant a within grade increase, absent justification that that level of productivity was insufficient. We found that by restricting management's discretion to determine the level of performance sufficient for a within-grade increase, the proposal in Section 9.H. directly interfered with management's rights to direct employees and assign work and was outside the duty to bargain.

Similarly, the proposal in this case would define a performance which is currently marginal as an acceptable level of competence for a within-grade increase. Therefore, based on Patent and Trademark Office, and the cases relied on therein, we conclude that Proposal 9 violates management's right to establish performance standards and thus its right to direct employees and assign work. See also American Federation of Government Employees, AFL-CIO, Local 32 and Office of Personnel Management, Washington, D.C., 14 FLRA 6, 12 (1984) (Proposal 6), enforced as to other matters sub nom. FLRA v. Office of Personnel Management, 778 F.2d 844 (D.C. Cir. 1985).

In summary, Proposal 9, in requiring negotiation over the level of performance necessary for a within-grade salary increase violates Government-wide regulations and is inconsistent with management's rights to direct employees and assign work. Consequently, it is nonnegotiable.

XI. Proposal 10

Section 16.F.3. Negative determination. A negative determination that an employee's performance is not at an acceptable level of competence shall be given to the employee in writing before the Personnel Office is notified of the negative determination. Failure to provide the written negative determination prior to the end of the month after the waiting period shall be conclusive evidence of an acceptable level of competence. . . .

A. Positions of the Parties

The Agency contends that the first sentence in Proposal 10 concerning the process of making a negative determination violates its right to assign work and a controlling Government-wide regulation. Also, according to the Agency, the second sentence of the proposal dealing with the effect of an untimely negative determination violates its rights to direct employees and assign work as well as conflicting with a pertinent Government-wide regulation.

The Union asserts that the first sentence in Proposal 10 establishes a procedure enabling an affected employee to contact the personnel officer prior to a final negative determination. The second sentence, the Union contends, is an appropriate arrangement for employees adversely affected by management's failure to act.

B. Analysis and Conclusion

2. First Disputed Sentence

We disagree with the Agency that the first sentence in Section 16.F.3. would effectively reassign authority, which currently resides with the personnel officer, for making negative determinations. On its face, this sentence is not concerned with designating the official who will make that decision. Rather, it would require that if an appraising official is recommending a negative determination, that official give it to the employee in writing before forwarding it to the Personnel Office. In that regard, however, the proposal conflicts with Government-wide regulations on performance appraisals which require that "(r)atings of record may not be communicated to employees prior to approval by the final reviewer." 5 C.F.R. 430.206(c). Therefore, the first sentence of the proposal is outside the duty to bargain as it is inconsistent with a Government-wide regulation.

2. Second Disputed Sentence

The second sentence, providing that failure to furnish written notice of a negative determination within the prescribed time limit will be conclusive evidence of an acceptable level of competence, is also inconsistent with Government-wide regulations. Those regulations provide that "(f)ailure to inform an employee of a negative determination may not be the basis for changing it." FPM chapter 531, subchapter 4-9.c. (2). Additionally, the regulations state that:

When a determination by an agency is not made on a timely basis through administrative oversight, error, or delay, the determination when made shall be based on the employee's performance during the period that would have been covered had the determination been timely made; and it is considered to have been made as of the date it would have been made were it not for the administrative oversight, error, or delay. FPM chapter 531, subchapter 4-9.h.

Consequently, we find that the second sentence in Proposal 10, which would convert a negative determination into a finding of acceptable level of competence if the concerned employee is not timely notified of the adverse evaluation, is contrary to a Government-wide regulation.

The parties raise additional arguments. Specifically, the Union contends that the second sentence in Section 16.F.3. is an "appropriate arrangement" within the meaning of section 7106(b)(3) of the Statute; and the Agency argues that it violates its rights to assign work and direct employees. In view of our finding that the second part of the proposal conflicts with a Government-wide regulation, it is unnecessary to address these arguments. In conclusion, Proposal 10 conflicts with Government-wide regulations and consequently is outside the duty to bargain under section 7117(a)(1) of the Statute.

XII. Proposal 11

Section 16.F.4. After denial of within grade increase. If an employee has been denied a within grade increase, he shall be granted a within grade increase as soon thereafter as he has sustained performance at an acceptable level of competence. Performance at or above the satisfactory level for six months is sufficiently sustained performance to warrant the grant of a within grade increase. (Only the underscored sentence is in dispute.)

A. Positions of the Parties

The Agency characterizes the proposal as requiring negotiation over the level of performance necessary to earn a within-grade increase. The proposal therefore seeks to bargain over management's rights under section 7106(a)(2)(A) and (B) to direct employees and assign work.

According to the Union, the principal thrust of the proposal is to establish the time period in which performance must be at the acceptable level of competence in order to earn a within-grade increase subsequent to a negative determination. According to the Union, the proposal does not require bargaining over the quality of performance which will earn an acceptable level of competence rating.

B. Analysis and Conclusion

As discussed in Proposal 9 in this case, the Union Stated that "satisfactory" is intended to be synonymous with the phrase an "acceptable level of competence." We agree with the Union that the proposal does not concern the level of performance necessary to earn a within-grade increase. Rather, the proposal is concerned with the length of time during which performance amounting to an acceptable level of competence must be maintained to overcome a prior denial of a within-grade increase.

The Agency does not contend that the time period established by the proposal is nonnegotiable either as an infringement on management rights or as a violation of Government-wide regulations. In fact, the controlling Government-wide regulation provides, in part:

When a within-grade increase has been withheld, an agency may, at any time thereafter, prepare a new rating of record for the employee and grant the within-grade increase when it determines that he or she has demonstrated sustained performance at an acceptable level of competence. 5 C.F.R. 531.411.

Thus, the regulation allows the Agency discretion to determine the length of the performance period before management reevaluates an employee who was previously denied a within-grade increase. To the extent that an Agency has discretion respecting a matter sought to be bargained affecting conditions of employment within a bargaining unit--and there is no argument that the proposal does not concern conditions of employment--and where the grant of discretion is not sole and exclusive, the matter is within the duty to bargain. National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 748, 759-62 (1980). Therefore, we hold that Proposal 11 is negotiable.

XIII. Proposal 12

The Authority Members have expressed different views concerning Proposal 12. The decision and order on this proposal and Chairman Calhoun's concurring opinion on Proposal 12 immediately follow this decision.

XIV. Proposal 13

Section 17. Evidence. If, during the five-year period prior to a proposed disciplinary action, the employee has neither been denied a within-grade increase nor received an overall performance rating of less than satisfactory, and the performance standards have not changed, this shall constitute evidence that the supervisor's application of the performance standards has changed. Unless successfully rebutted, no disciplinary action will be taken and the employee will be given one opportunity to transfer with his or her art to another supervisor. (Only the underscored sentence is in dispute.)

A. Positions of the Parties

The Agency contends that the underscored part of the proposal would subject performance standards to substantive review. Furthermore, in allowing an employee to transfer on his or her own initiative to another supervisor, the Agency claims it would interfere with management's right to assign work.

The Union responds that the proposal is not concerned with the substance of performance standards but, rather, with their application. That part of the proposal giving certain employees the right to transfer to another supervisor is described by the Union as an appropriate arrangement for employees adversely affected by the exercise of management's right to review performance.

B. Analysis and Conclusion

The underscored portion of Proposal 13 would permit an employee who prevails in a grievance over the application of performance standards to transfer to another supervisor at the employee's option. According to the Agency, permitting an employee the option of transferring with his or her narrow technical expertise in the Agency's highly specialized organization could result in oversight by a supervisor who lacks the requisite skill to supervise the employee. Consequently, the Agency asserts, "the quality of the supervision the supervisor would be able to render could be compromised, thus interfering with the mission of the Agency." Statement of Position at 16. Even absent these considerations, the Agency asserts that the proposal violates its right to assign.

The Authority has consistently held that proposals compelling the selection of a specific individual for reassignment are outside the duty to bargain. In American Federation of Government Employees, AFL-CIO, Council 214 and Department of the Air Force, Headquarters, Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 8 FLRA 425 (1982), part 2 of Proposals 1-3 required that, in certain circumstances, the reassignment of an employee to a vacant position be based on the employee's preference. The Authority held that such a proposal was inconsistent with management's right to assign pursuant to section 7106(a) (2)(A) of the Statute. See also Veterans Administration Medical Center, Kerrville, Texas and American Federation of Government Employees, Local 2281, 18 FLRA 416 (1985).

As the underscored portion of Proposal 13 is to the same effect as the cited proposal in Wright-Patterson Air Force Base, we find that it directly interferes with management's right to assign. The underscored portion of the proposal operates after an employee has successfully grieved Thus, the employee has suffered no adverse affect. While the Union argues that supervisor-employee friction may result from the supervisor's appraisal being overturned, this argument is mere speculation. Furthermore, protection from such reprisal is available under the Statute. Thus, since the protection sought is not for an adversely affected employee, we conclude that the underscored portion of Proposal 13 is not a negotiable appropriate arrangement. National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24, 31 (1986). Therefore, the underscored portion of Proposal 13 interferes with management's rights to direct employees and assign work and is outside the duty to bargain.

XV. Proposal 14

Section 20.E,. Management will take appropriate measures to insure that the 35 USC 122 waiver process will be separate from the Office's preparation of grievance/arbitration case, so that the employee in the Solicitor's Office who is assigned to deal with the 35 USC 122 question will make no disclosure for the purpose of helping management to assert its positions in the grievant's case. (Only the underscored portion is in dispute.)

A. Positions of the Parties

The Agency contends that the underscored part of the proposal, by stipulating which office will assume responsibility for granting waivers, interferes with its rights to assign work and determine the personnel by which its operations will be conducted. In effect, the Agency states the proposal would require negotiation concerning which office handles waivers.

The Union asserts that Proposal 14 is intended as an appropriate arrangement for employees who must defend their examination of a patent application in a performance-based action. Separating the waiver process from grievance preparation, the Union argues, will prevent the Agency from gaining access to expert witnesses prior to a hearing. According to the Union, management will have an unfair advantage in a grievance proceeding absent a separation of functions.

B. Analysis and Conclusion

According to statute, patent applications must be kept confidential unless disclosure is authorized by the applicant or patent owner or "unless necessary to carry out the provisions of any Act of Congress or in such special circumstances as may be determined by the commissioner." 35 U.S.C. 122 (1982). Proposal 14 states that an employee in the Solicitor's Office is assigned to process the waivers permitted by statute. Although the Union apparently intended only to ensure a separation of functions, we agree with the Agency that the proposal, as written, requires negotiation concerning which office will handle waiver requests. Thus, the proposal directly interferes with the Agency's right under section 7106(a)(2)(B) to assign work and determine the personnel by which its operations will be conducted. See American Federation of State, County and Municipal Employees, AFL-CIO, Local 2910 and Library of Congress, 11 FLRA 632 (1983) (Proposals 1 and 2) (proposals which specifically or implicitly assigned certain responsibilities to organization segments and/or agency employees held violative of management's right to assign work); National Federation of Federal Employees, Locals 1707, 1737 and 1708 and Headquarters, Louisiana Air and Army National Guard, New Orleans, Louisiana, 9 FLRA 148 (1982) (proposal designating particular management officials to represent the agency on rating and ranking panel held nonnegotiable as it violated management's right to determine the personnel by which agency operations shall be conducted).

The Union argues that the proposal is an appropriate arrangement for employees who must defend their performance in handling patent applications. Specifically, the Union states that the proposal will prevent the waiver procedure from becoming a "one-way discovery process" in which management would have "an opportunity to cross-examine expert witnesses prior to a hearing, while the employee would have no such right with respect to management's witnesses." Reply Brief at 18.

The nature and extent of the impact experienced by employees if the waiver process is not separate from grievance preparation is unclear. However, assuming that Proposal 14 would benefit employees by preventing the waiver process from becoming a discovery method favorable to management, we find that this benefit is outweighed by the infringement on management's rights. In this instance, management would be restricted in its ability to assign work and determine its personnel by the proposal's requirement that the Agency negotiate concerning which personnel will process waivers. Thus, we conclude that Proposal 14 excessively interferes with management's rights and is not a negotiable appropriate arrangement. In conclusion, we hold that Proposal 14 directly interferes with the Agency's rights to assign work and determine the personnel by which its operations will be conducted and is outside the duty to bargain.

XVI. Order

Proposals 2, 4, 6, 8, 9, 10, 13, 24 and the third sentence in Proposal 1 are dismissed. The Agency shall upon request, or as otherwise agreed to by the parties, bargain concerning the first Sentence in Proposal 1 and Proposals 3, 5, 7, and 11. 2

Issued, Washington, D.C.,November 6, 1987.

Jerry L. Calhoun, Chairman

Henry B. Frazier III, Member

Jean McKee, Member

FEDERAL LABOR RELATIONS AUTHORITY

DECISION AND ORDER ON PROPOSAL 12

Section 16.G.2. If management fails to comply with any step in the procedures of this section, management must repeat that step properly before any more serious disciplinary action can be taken against the employee.

I. Positions of the Parties

According to the Agency, Proposal 12 is nonnegotiable because it would require an arbitrator to overturn a performance-based adverse action when management committed any type of error, regardless of whether it was harmful to the employee's interests. In support, the Agency cites the Supreme Court's holding in Cornelius v. Nutt, 472 U.S. 648 (1985).

The Union asserts that Proposal 12 provides a procedure to enforce the requirements of Section 16, "Performance-Based Disciplinary Actions," of the negotiated agreement. Further, the Union claims that its proposal defines a harmful error.

II. Analysis and Conclusion

Proposal 12 would prescribe a penalty to be imposed on the Agency if it failed to follow the requirements in the parties' agreement regarding performance-based disciplinary actions. In effect, the Agency could not enforce more serious disciplinary action against an employee if management had failed to follow the procedures in Section 16. The actions defined in that section include oral warnings, written warnings, and written notices of deficient performance, as well as actions which may be appealed under 5 U.S.C. 4303 and 7512, such as reassignments, demotions, and removals.

In Cornelius v. Nutt, the Supreme Court held that if a disciplinary action taken under 5 U.S.C. 4303 or 7512 is grieved under a negotiated grievance procedure, an arbitrator must apply the same substantive standards, including the harmful error rule, that would be applied if the matter had been appealed through the appellate procedures of 5 U.S.C. 7701(c)(1). Cornelius v. Nutt at 660-61. Under 5 U.S.C. 7701(c)(1), an