31:1271(115)AR - VA and AFGE Local 1228 -- 1988 FLRAdec AR



[ v31 p1271 ]
31:1271(115)AR
The decision of the Authority follows:


31 FLRA NO. 115

VETERANS ADMINISTRATION

                   Agency

      and

AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 1228

                   Union

                                                   0-AR-1461

                         DECISION

     I. statement of the Case

     This matter is before the Authority on exceptions to the
award of Arbitrator James A. McClimon. The Arbitrator ordered the
Agency to change the grievant's performance rating from
"satisfactory" to "highly satisfactory." The Agency filed
exceptions under section 7122(a) of the Federal Service Labor -
Management Relations Statute (the Statute) and part 2425 of the
Authority's Rules and Regulations.

     For the reasons stated below, we conclude that the award is
contrary to section 7106(a)(2)(A) and (B) of the Statute.
Accordingly, the award must be set aside.

     II. Background and Arbitrator's Award

     As his annual performance appraisal for the period between
April 1, 1986, and March 31,  1987, the 1986-87 appraisal year,
the grievant received an overall rating of "satisfactory." A
grievance was filed, and subsequently submitted to arbitration,
seeking an "outstanding" rating. The parties stipulated that the
issue at arbitration was: "Did (the grievant) receive an
appropriate or fair job performance rating; and if not, what is
the appropriate or fair job performance rating." Award at 2. 

     The Arbitrator stated that the grievant's job was divided
into four areas of key responsibility. Under the 
performance appraisal system, management evaluated each
responsibility using specific job performance standards. The
grievant's overall rating was based on whether he "met,"
"exceeded," or "far exceeded" the performance standards for each
key responsibility. For the 1986-87 appraisal year, the grievant
received "far exceeded" ratings in three key responsibilities.
However, in "credit underwriting and loan analysis" he was
evaluated at the "met" level, which precluded him from receiving
either a "highly satisfactory" or an "outstanding" overall
performance rating. Under the performance appraisal system, the
grievant would have had to receive a "far exceeded" rating in
"credit underwriting and loan analysis" in order to be rated
outstanding. The Union argued before the Arbitrator that the high
Veterans Administration (VA) loan application workload during the
1986-87 appraisal year prevented the grievant from achieving an
outstanding overall performance rating and that the job
performance standard for that key responsibility should be
waived.

     The Arbitrator found that the record did not support the
Union's contention that the grievant's workload precluded him
from achieving an outstanding rating. He noted that the VA loan
application workload decreased from 477 in the 1985-86 appraisal
period to 375 in the 1986-87 period. Award at 9. Further, he
noted that management instituted the following changes affecting
the workload such as: approving overtime; obtaining assistance
for certain underwriting activities; providing the grievant with
an unpublished telephone number to alleviate interruptions of his
loan processing activities; and instructing the grievant to spend
less time with sales meeting activities. Award at 10. Based on
these changes and the reduced number of loan applications, the
Arbitrator concluded that the grievant's workload did not prevent
him from achieving an outstanding rating. Award at 7, 10. The
Arbitrator, therefore, denied the grievant an outstanding
rating.

     The grievant had initially sought revision of his
performance standards at his mid-year review. At that time, his
supervisor did not agree to revise the standards, but he stated
that any changes would have to be consistent with Central Office
standards used to evaluate the Regional Office's loan guaranty
operations. Subsequently, the grievant proposed "far exceeded"
standards which were based on the Central Office's "met"
timeliness standards. After the close of the grievant's 1986-87
appraisal period, his supervisor implemented new "fully
successful" standards which were the same as the Central Office's
previous "met" level standards. Award at 8.  

     The Arbitrator stated, "Even though (the grievant's) formal
job evaluation was not based upon the new 'fully successful'
performance standards, I find that these new standards and (the
grievant's) proposed 'far exceeded' standards are relevant in
reviewing (the grievant's) 1986-87 work performance." Award at 8.
The Arbitrator applied the performance standards which management
implemented after the end of the grievant's 1986-87 appraisal
period. He then concluded that the record demonstrated that the
grievant was an "above-average" employee.

     In reaching his decision that the grievant's performance was
above average, the Arbitrator noted that under the new standards,
the grievant's completion of credit underwriting and loan
applications exceeded the average completion rate of other
employees. Award at 9. He stated, "the data clearly indicates
that under the new 'fully successful' job performance standards
developed by (the supervisor), (the grievant's) completion of the
credit underwriting and analysis of loan applications 'exceeded'
the average completion rate of other employees performing credit
underwriting and loan analysis work." Award at 9. Thus, the
Arbitrator found that the grievant was an above-average employee
and awarded him a rating of "highly satisfactory" for the 1986-87
appraisal period. Award at 11.

     III. Positions of the Parties

     The Agency contends that the Arbitrator's award is contrary
to section 7106(a)(2)(A) and (B) of the Statute. First, the
Agency argues that the Arbitrator's award has the effect of
changing management's established performance standards. Second,
the Agency argues that the Arbitrator substituted his judgment
for that of management by measuring the grievant's performance
against the performance of other employees and independently
determining the level of performance that the grievant reached
for the 1986-87 appraisal period.

     The Union did not file an opposition to the Agency's
contentions. 

     IV. Analysis and Conclusion

     In Social Security Administration and American Federation of
Government Employees, AFL - CIO, 30 FLRA  1156 (1988) (SSA and
AFGE), we reexamined the remedial authority of arbitrators in
performance appraisal matters. We held that:

     when an arbitrator finds that management has not applied the
     established elements and standards or that management has applied
     the established elements and standards in violation of law,
     regulation, or a properly negotiated provision of the parties'
     collective bargaining agreement, the arbitrator may cancel the
     performance appraisal or rating. When the arbitrator is able to
     determine on the basis of the record presented what the rating of
     the grievant's work product or performance would have been under
     the established elements and standards, if they had been applied,
     or if the violation of law, regulation, or the collective
     bargaining agreement had not occurred, the arbitrator may direct
     management to grant the grievant that rating. If the record does
     not enable the arbitrator to determine what the grievant's rating
     would have been, the arbitrator should direct that the grievant's
     work product or performance be reevaluated by management as
     appropriate.

30 FLRA  at 1160-61.

     In this case, the Arbitrator cancelled the grievant's
"satisfactory" performance rating. However, the Arbitrator did
not cancel the grievant's rating because he found that management
had not applied the established elements and standards or that
management had applied the established elements and standards in
violation of law, regulation, or the collective bargaining
agreement. Rather, by utilizing performance standards different
from those established by management, he found that the
grievant's performance during the 1986-87 appraisal period
exceeded a satisfactory level of achievement. Award at 11. Since
the Arbitrator's cancellation of the grievant's performance
rating did not result from a finding that management failed to
apply the established elements and standards or that management
applied the performance standards in violation of law,
regulation, or the parties' collective bargaining agreement, we
conclude that he was not authorized to cancel the
grievant's performance rating under our decision in SSA and AFGE.
Accordingly, the Arbitrator's award must be set aside.

     Moreover, we also note that the Arbitrator exceeded his
authority by establishing new performance standards. In Newark
Air Force Station and American Federation of Government
Employees, Local 2221, 30 FLRA  616 (1987), we held that an
arbitrator may examine the performance standards and elements
established by management only in order to determine whether they
comply with applicable legal and regulatory requirements, notably
the provisions of 5 U.S.C. 4302 and 5 C.F.R. Chapter 430.
Further, if an arbitrator were to find that a grievant's
performance plan did not comply with applicable requirements, the
appropriate remedy would be for the arbitrator to direct the
agency to establish a plan which complies with applicable legal
requirements. As we stated in Newark, "(a)n arbitrator may not
determine what the content of the employee's plan should be and
may not establish new performance standards." Id. at 636-37.

     In this case, we find that the Arbitrator exceeded his
authority by changing management's established performance
standards. The Arbitrator substituted a different performance
plan for the one which management had established by applying the
performance standards implemented by the