[ v30 p922 ]
30:0922(104)CA
The decision of the Authority follows:
30 FLRA No. 104
DEPARTMENT OF HEALTH AND HUMAN SERVICES
AND SOCIAL SECURITY ADMINISTRATION
Respondents
and
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, AFL-CIO
Charging Party
Case No. 3-CA-70402
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Respondent
and
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 1923, AFL-CIO
Charging Party
Case No. 3-CA-70478
DEPARTMENT OF HEALTH AND HUMAN SERVICES
AND OFFICE OF THE SECRETARY, OFFICE OF
THE GENERAL COUNSEL, SOCIAL SECURITY
DIVISION
Respondents
and
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 1923, AFL-CIO
Charging Party
Case No. 3-CA-70490
[PAGE]
DECISION AND ORDER
I. Statement of the Case
This consolidated unfair labor practice case is before the Authority in accordance with section 2429.1(a) of the Authority's Rules and Regulations, based on stipulations of facts by the parties, who have agreed that no material issue of fact exists.
The consolidated complaints allege that the Department of Health and Human Services (HHS) interfered with the bargaining relationships of its subordinate Activities and the American Federation of Government Employees (AFGE) and AFGE Local 1923 (Unions) by (1) unilaterally discontinuing the practice of hand-delivering employees' wage and tax statements (W-2 statements) at the worksite; and (2) refusing to permit negotiations over the substance, impact, and procedures for implementation of the change in the Agency's practice. Two of the complaints also allege that Respondents Social Security Administration (SSA or Activity) (Case No. 3-CA-70402) and Office of the Secretary, Office of the General Counsel, Social Security Division (OGC or Activity) (Case No. 3-CA-70490) violated section 7116(a)(1) and (5) of the Federal Service Labor - Management Relations Statute (the Statute) when, at the direction of HHS, they discontinued the hand-delivery, of W-2 statements and refused to bargain. We find that HHS violated the Statute as alleged. We dismiss the allegations against SSA and OGC because they were acting ministerially and without discretion in the matter.
II. Facts
The Charging Parties are the exclusive representatives of various units of employees at HHS subordinate activities. Some time during January 12-26, 1987, at the direction of HHS, the Activities unilaterally discontinued hand-delivery of employees' W-2 statements at the worksite and implemented a policy of mailing W-2 statements to employees' home addresses. The Activities were obligated to implement the new policy concerning the delivery of wage and tax statements because the policy was initiated at the HHS level. Respondent's Brief (3-CA-70402) at 3 and Respondent's Brief (3-CA-70490) at 2.
The Unions requested negotiations over the substance, impact and procedures for implementation of the change in the method for distributing W-2 statements. The Activities refused to bargain. Thereafter, the General Counsel of the Federal Labor Relations Authority issued complaints alleging [ v30 p2 ] that HHS interfered with the bargaining relationship between its Activities and the Unions by implementing a change in conditions of employment and precluding negotiations over the change in working conditions. The complaints also alleged that SSA and OGC, at the direction of HHS, unilaterally discontinued hand-delivery of employees' wage and tax statements at the worksite and refused to negotiate over the substance, impact and procedures for implementation of the change in working conditions. The Regional Director consolidated these cases and transferred them to the Authority on October 8, 1987, for a decision on stipulations of facts.
III. Positions of the Parties.
The Respondents contend that the elimination of hand-delivery of W-2 forms does not constitute a change in a condition of employment and is not a matter which affects working conditions of employees. According to the Respondents, the W-2 statements are given to employees in compliance with law and Internal Revenue Service regulations. The Respondents claim that since the issuance and delivery of W-2 statements to employees are matters clearly provided for and covered by statutory and regulatory requirements, they cannot be considered to be conditions of employment. Further, even assuming that the manner of delivery of the W-2 wage statements to employees has an effect on employees' conditions of employment, the Respondents contend that the change from a hand-delivery method to one of mail-delivery did not have an impact on bargaining unit employees which gave rise to a duty to bargain.
The General Counsel states that the Authority has previously held that an agency has a duty to bargain concerning the options for delivery of paychecks and other payroll products, including W-2 statements. The General Counsel argues that the stipulated facts demonstrate that the Respondents violated the Statute when they changed working conditions without bargaining with the Union.
IV. Discussion
A. Contentions Concerning Conditions of Employment
In Federal Employees Metal Trades Council, AFL - CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA 465 (1987), the Authority, relying on its decision in Antilles Consolidated Education Association and Antilles Consolidated School System, 22 FLRA 235 (1986), found that the manner in which pay is delivered to employees [ v30 p3 ] is a matter affecting working conditions of employees because it is inextricably tied to a fundamental condition of employment--pay--and directly affects such employee concerns as where and how quickly pay will be received. Moreover, in U.S. Department of the Treasury, 27 FLRA 919 (1987) the Authority found, for the reasons set forth in Mare Island Naval Shipyard, that the agency had a duty to bargain over not only the delivery of paychecks, but also the delivery of other payroll products, including W-2 statements, because those are matters which affect the working conditions of bargaining unit employees. Id. at 924-25. The Agency admits that the wage and tax statements involved in this case are a "payroll product" representing the annual record of the compensation which flows from the employment relationship between the employee and the employer. See HHS Brief (corrected copy) at 13 and Respondent's Brief (3-CA-70402) at 6. Like the paychecks which they record, therefore, W-2 statements are "inextricably bound" to employee compensation and, as with paychecks, the manner in which they are delivered is a matter affecting conditions of employment within the meaning of the statute.
We reject the Respondents' argument that the delivery of employee wage and tax statements does not concern conditions of employment because it is a matter which is clearly provided for by statute and by regulation. The Agency, does not claim that the matter of wage and tax statements is specifically provided for by Federal statute so as to be outside the duty to bargain under section 7103(a)(14)(C) of the Statute. Even if we were to interpret the argument in those terms, however, the matter of delivery of wage and tax statements would not be outside the duty to bargain. In particular, while 26 U.S.C. 3402 requires employers to withhold taxes from employees' wages, and 26 C.F.R. 31.6051-1 requires employers to provide employees with a statement of wages and taxes, neither of those provisions specifically provides for the method or manner of delivering statements of tax withholdings. Consequently, the Agency's argument does not provide a basis for concluding that the method of delivering W-2 forms is outside the duty to bargain under section 7103(a)(14)(C) of the Statute.
B. Contentions Concerning Duty to Bargain
The Respondents argue that even if the manner of delivery of W-2 statements affects employees' conditions of employment, the Agency is not obligated to bargain over [ v30 p4 ] the change in its practice. The Respondents contend that the impact of employees receiving the W-2 statement by mail instead of having it hand-delivered at the worksite is so minimal that it does not give rise to a duty bargain. In support of its argument, the Respondents assert that there is no effect or foreseeable effect on employees that would result from the change because (1) W-2 statements are delivered to employees only once a year, (2) the time frame in which the Respondents must provide the employee a copy of the W-2 statement is set by law and regulation, and (3) the content of W-2 statements only affects matters related to the filing of income taxes and compliance with other statutory laws and does not affect employees' working conditions.
The Authority has held that where the decision to make a change in conditions of employment is itself negotiable, the extent of the impact of the change in conditions of employment on unit employees is not relevant. Rather, the question is whether the statutory obligation to notify and negotiate with the exclusive representative concerning the change was fulfilled. United States Department of Health and Human Services, Region II, New York, New York, 26 FLRA 814, 826-27 (1987); Department of Health and Human Services, Social Security Administration, Baltimore, Maryland, 19 FLRA 1085 (1985); Department of Defense Dependents Schools, Mediterranean Region (Madrid, Spain); and Zaragoza High School, (Zaragoza, Spain), 19 FLRA 395 (1985). Since the Respondents obligated to negotiate over the decision to change the method of delivering employees' W-2 statements, we reject the Respondents' argument that it had no duty, to bargain because of the limited impact of the change in conditions of employment.
As to whether or not SSA and OGC committed unfair labor practices by refusing to negotiate with the Unions, we find that both SSA and OGC acted at the direction of HHS when they refused to bargain. HHS initiated the change in practice and specifically states that its activities were "obligated to implement the effective changes in the delivery of employee wage and tax statements." Respondent's Brief (3-CA-70490) at 3. See also Respondent's Brief (3-CA-70490) at 2. Therefore, SSA and OGC were acting ministerially and without discretion in the matter. In these circumstances, we will not find that the Activities violated section 7116(a)(1) and (5) of the Statute. See, for example, Veterans Administration, Washington, D.C. and Veterans Administration Medical Center, Veterans Administration, New Orleans, Louisiana, 29 FLRA 55, 57-58 (1987). [ v30 p5 ]
As to HHS' conduct, the Authority has consistently held that the conduct of higher level agency management may constitute an unfair labor practice where such conduct prevents lower level management from fulfilling an obligation under the Statute. See, for example, id. at 58. See also Department of the Interior, Water and Power Resources Service, Grand Coulee Project, Grand Coulee, Washington and Office of the Secretary, Department of the Interior, Washington, D.C., 9 FLRA 385, 388 (1982). HHS improperly prevented SSA, OGC and the Health Care Financing Administration from meeting their obligations under the Statute and improperly interfered with the local bargaining relationships between its Activities and the Unions by initiating a change in the manner of delivering wage and tax statements to employees and by directing its activities to implement the change without allowing them to bargain with the Unions.
Finally, in our view the dispute in this case is not one that should have required resort to the formal appellate processes of the Statute. We urge representatives of agency management and unions to resolve disputes of this nature bilaterally without the need to invoke statutory third-party processes and resources that could be better used to resolve more significant matters.
V. Remedy
As a remedy in this case, we will order that HHS rescind its policy concerning the mail-delivery of all W-2 statements for wages earned after the 1987 tax year. We will also direct HHS to notify the Unions of any intended change in the manner of distributing bargaining unit employees' wage and tax statements and permit its subordinate Activities to bargain, upon request, consistent with law and regulation. It is not in the interest of an effective and efficient government to order that the parties negotiate concerning the delivery of W-2 statements for wages earned during the 1987 tax year, since to order such negotiations at this time might not allow the Agency sufficient time to deliver the 1987 statements within the time prescribed in governing regulations.
VI. Conclusion
Based upon the above analysis and consideration of the entire record in this case, including the parties' contentions, we conclude that HHS violated section 7116(a)(1) and (5) of the Statute by unilaterally implementing a change [ v30 p6 ] in the manner of delivering wage and tax statements to employees and by directing its subordinate Activities to implement the change without allowing the Activities to bargain over the change in practice. We also conclude that HHS interfered with the bargaining relationships between its activities and the Charging Parties by initiating and directing the implementation of a policy which precluded negotiations with the Charging Parties concerning the change in practice.
We do not find, however, that SSA and OGC violated the Statute since SSA and OGC were obligated to implement the policy initiated by HHS and therefore did not have discretion to change or refuse to implement the HHS policy.
ORDER
The Department of Health and Human Services shall:
1. Cease and desist from:
(a) Unilaterally changing established conditions of employment at the Social Security Administration, Baltimore, Maryland, the Health Care Financing Administration; and the Office of the Secretary, Office of the General Counsel, Social: Security Division concerning the manner of distributing the wage and tax statements (W-2 forms) of employees represented by the American Federation of Government Employees, AFL - CIO and the American Federation of Government Employees, Local 1923, AFL - CIO, the employees' exclusive collective bargaining representatives.
(b) In any like or related manner, interfering with, restraining, or coercing its employees in the exercise of their rights assured by the Federal Service Labor - Management Relations Statute.
(c) In any like or related manner, interfering with the local bargaining relationships between the America-. Federation of Government Employees, AFL - CIO and the Social Security Administration; the American Federation of Government Employees, Local 1923, AFL - CIO and the Health Care Financing Administration; and the American Federation of Government Employees, Local 1923, AFL - CIO and the Office of the Secretary, Office of the General Counsel, Social Security Division. [ v30 p7 ]
2. Take the following affirmative action:
(a) Withdraw and rescind the policy concerning the manner of distribution of wage and tax statements (W-2 forms, for wages earned after the 1987 tax year applicable to employees of the Social Security Administration, Baltimore, Maryland; the Health Care Financing Administration; and the Office of the Secretary, Office of the General Counsel, Social Security Division, represented by the American Federation of Government Employees, AFL - CIO and the American Federation of Government Employees, Local 1923, AFL - CIO, and reinstate the procedures and policies in effect prior to its issuance.
(b) Notify the American Federation of Government Employees, AFL - CIO and the American Federation of Government Employees, Local 1923, AFL - CIO, the exclusive representatives of the employees of the Social Security Administration, Baltimore, Maryland; the Health Care Financing Administration; and the Office of the Secretary, Office of the General Counsel, Social Security Division of the intended change in the manner of distributing bargaining unit employees' wage and tax statements (W-2 forms) and upon request negotiate with the representatives to the extent consonant with law and regulation on any change.
(c) Post at the Social Security Administration, Baltimore, Maryland; the Health Care Financing Administration; and the Office of the Secretary, Office of the General Counsel, Social Security Division, copies of the attached Notices marked Notice A, B, and C on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Secretary, Department of Health and Human Services, Washington, D.C., and they shall be posted for 60 consecutive days thereafter in conspicuous places, including all bulletin boards and other places where notices to employees at the Social Security Administration, Baltimore, Maryland; the Health Care Financing Administration; and the Office of the Secretary, Office of the General Counsel, Social Security Division, are customarily posted. Reasonable steps shall be taken to ensure that notices are not altered, defaced, or covered by any other material.
(d) Pursuant to section 2423.30 of the Federal Labor Relations Authority's Rules and Regulations, notify the Regional Director, Region III, in writing, within 30 days from the date of this Order, what steps have been taken to comply. [ v30 p8 ] Further, we dismiss the allegations in the complaints against the Social Security Administration, Baltimore, Maryland and the Office of the Secretary, Office of the General Counsel, Social Security Division.
Issued, Washington, D.C., January 15, 1988
Jerry L. Calhoun, Chairman
Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY [ v30 p9 ]
NOTICE A
NOTICE TO ALL EMPLOYEES
AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY
AND TO EFFECTUATE THE POLICIES OF THE
FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE
WE NOTIFY OUR EMPLOYEES THAT:
WE WILL NOT unilaterally change established conditions of employment at the Social Security Administration, Baltimore, Maryland concerning the manner of distributing wage and tax statements (W-2 forms) of employees represented by the American Federation of Government Employees, AFL - CIO, the employees' exclusive collective bargaining representative.
WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce our employees in the exercise of their rights assured by the Federal Service Labor - Management Relations Statute.
WE WILL NOT, in any like or related manner, interfere with the local bargaining relationship between the American Federation of Government Employees, AFL - CIO and the Social Security Administration, Baltimore, Maryland.
WE WILL rescind the policy concerning the manner of distribution of wage and tax statements (W-2 forms) for wages earned after the 1987 tax year as applicable to employees of the Social Security Administration, Baltimore, Maryland, represented by the American Federation of Government Employees, AFL - CIO, and reinstate the procedures and policies in effect prior to its issuance.
WE WILL notify the American Federation of Government Employees, AFL - CIO, the exclusive representative of the employees of the Social Security Administration, Baltimore, Maryland, of any intended change in the manner of distributing bargaining unit employees' wage and tax statements (W-2 forms) and will, upon request, negotiate with the representative to the extent consonant with law and regulations on any change.
______________________________
(Agency)
Dated:____________________By:______________________________
(Signature) (Title)
[PAGE] This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material.
If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Region III, Federal Labor Relations Authority, whose address is: 1111 18th Street, N.W., 7th Floor (P.O. Box 33758), Washington, D.C. 20033-0758, and whose telephone number is: (202) 653-8500. [ v30 p2 ]
NOTICE B
NOTICE TO ALL EMPLOYEES
AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY
AND TO EFFECTUATE THE POLICIES OF THE
FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE
WE NOTIFY OUR EMPLOYEES THAT:
WE WILL NOT unilaterally change established conditions of employment at the Health Care Financing Administration concerning the manner of distributing wage and tax statements (W-2 Forms) of employees represented by the American Federation of Government Employees, Local 1923, AFL - CIO, the employees' exclusive collective bargaining representative.
WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce our employees in the exercise of their rights assured by the Federal Service Labor - Management Relations Statute.
WE WILL NOT, in any like or related manner, interfere with the local bargaining relationship between the American Federation of Government Employees, Local 1923, AFL - CIO and the Health Care Financing Administration.
WE WILL rescind the policy concerning the manner of distribution of wage and tax statements (W-2 forms) for wages earned after the 1987 tax year as applicable to employees of the Health Care Financing Administration, represented by the American Federation of Government Employees, Local 1923, AFL - CIO, and reinstate the procedures and policies in effect prior to its issuance.
WE WILL notify the American Federation of Government Employees, Local 1923, AFL - CIO, the exclusive representative of the employees of the Health Care Financing Administration, of any intended change in the manner of distributing bargaining unit employees' wage and tax statements (W-2 forms) and will, upon request, negotiate with the representative to the extent consonant with law and regulation on any change.
------------------------------
(Agency)
Dated:____________________By:______________________________
(Signature) (Title)
[PAGE]
This Notice must remain posted for 6o consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material.
If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Region III, Federal Labor Relations Authority, whose address is: 1111 18th Street, N.W., 7th Floor (P.O. Box 33758), Washington, D.C. 2O033-0758, and whose telephone number is: (202) 653-8500. [ v30 p2 ]
NOTICE C
NOTICE TO ALL EMPLOYEES
AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY
AND TO EFFECTUATE THE POLICIES OF THE
FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE
WE NOTIFY OUR EMPLOYEES THAT:
WE WILL NOT unilaterally change established conditions of employment at the Office of the Secretary, Office of the General Counsel, Social Security Division concerning the manner of distributing wage and tax statements (W-2 forms) of employees represented by the American Federation of Government Employees, Local 1923, AFL - CIO, the employees' exclusive collective bargaining representative.
WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce our employees in the exercise of their rights assured by the Federal Service Labor - Management Relations Statute.
WE WILL NOT, in any like or related manner, interfere with the local bargaining relationship between the American Federation of Government Employees, Local 1923, AFL - CIO and the Office of the Secretary, Office of the General Counsel, Social Security Division.
WE WILL rescind the policy concerning the manner of distribution of wage and tax statements (W-2 forms) for wages earned after the 1987 tax year as applicable to employees of the Office of the Secretary, Office of the General Counsel, Social Security Division, represented by, American Federation of Government Employees, Local 1923, AFL - CIO, and reinstate the procedures and policies in effect prior to its issuance.
WE WILL notify the American Federation of Government Employees, Local 1923, AFL - CIO, the exclusive representative of the employees of the Office of the Secretary, Office of the General Counsel, Social Security Division, of any intended change in the manner of distributing bargaining unit [PAGE] employees' wage and tax statements (W-2 forms) and will, upon request, negotiate with the representative to the extent consonant with law and regulation on any change.
______________________________
(Agency)
Dated: ___________________ By:_____________________________
(Signature) (Title)
This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by, any other material.
If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Region III, Federal Labor Relations Authority', whose address is: 1111 18th Street, N.W., 7th Floor (P.O. Box 33758), Washington, D.C. 20033-0758, and whose telephone number is: (202) 653-8500. [ v30 p2 ]