32:0721(105)NG - - NFFE Local 29 and Army Corps of Engineers, Kansas City District, Kansas City, MO - - 1988 FLRAdec NG - - v32 p721



[ v32 p721 ]
32:0721(105)NG
The decision of the Authority follows:


32 FLRA No. 105

UNITED STATES OF AMERICA
BEFORE THE
FEDERAL LABOR RELATIONS AUTHORITY
WASHINGTON, D.C.

 

NATIONAL FEDERATION OF FEDERAL
EMPLOYEES, LOCAL 29
Union

and 

U.S. ARMY CORPS OF ENGINEERS
KANSAS CITY DISTRICT
KANSAS CITY, MISSOURI
Agency

NATIONAL FEDERATION OF FEDERAL
EMPLOYEES, LOCAL 29
Union

and 

U.S. ARMY CORPS OF ENGINEERS
KANSAS CITY DISTRICT
KANSAS CITY, MISSOURI
Agency

Case No. 0-NG-846
Case No. 0-NG-1146

CONSOLIDATED DECISION AND ORDER ON NEGOTIABILITY ISSUES

I. Statement of the Case

These cases are before the Authority because of negotiability appeals filed under section 7105(a)(2)(D) and (E) of the Federal Service Labor-Management Relations Statute (the Statute). Both cases concern the negotiability of portions of proposed procedures to be followed in disputes arising under section 5 of the Debt Collection Act of 1982 (the Act), 5 U.S.C. § 5514. Since the same proposal is presented in both cases, we have consolidated them for the purpose of decision.

For the reasons discussed below, we find that insofar as the proposal pertains to debts owed by bargaining unit members to other agencies, it is nonnegotiable because it is inconsistent with law. We find further that Sections 1, 2.b., 2.b.4, and 3 are within the duty to bargain to the extent that the disputed portions of the proposal concern debts owed by employees to the Agency.(1) We find that Section 4, concerning the blanket waiver of debt collection processing charges, is outside the duty to bargain because it is inconsistent with law and Government-wide regulation.

II. History of the Cases

A. Background

Article 31 was initially proposed by the Union when the Act was enacted, during the term of the parties' collective bargaining agreement. The Union appealed the Agency's allegation of nonnegotiability during these mid-term negotiations in Case No. 0-NG-846. The Union also filed an unfair labor practice charge alleging a failure to bargain in good faith in violation of section 7116(a)(1) and (5) of the Statute. Subsequently, the Union elected to proceed first with the unfair labor practice complaint (ULP complaint).

After the expiration of the parties' agreement but before the ULP complaint was resolved, the Union submitted the same proposal during negotiations for a new collective bargaining agreement. The Agency again refused to bargain and the Union filed a negotiability appeal in Case No. 0-NG-1146. It also filed another unfair labor practice charge. The Regional Director, however, decided not to issue a complaint and only the original ULP complaint remained to be resolved. Agency letter of Feb. 11, 1986. Pursuant to the Agency's motion, which was not opposed by the Union, the Authority consolidated the negotiability cases.

The Authority dismissed the ULP complaint in U.S. Army Corps of Engineers, Kansas City District, Kansas City, Missouri, 18 FLRA 358 (1985) (Kansas City I). The Union appealed this decision to the U.S. Court of Appeals for the District of Columbia Circuit.

The Authority held the processing of the negotiability cases in abeyance pending a decision by the court on the Union's appeal of Kansas City I. The court reversed the Authority's decision in Kansas City I--NFFE Local 29 v. FLRA, No. 85-1486 (D.C. Cir. Aug. 19, 1987)--in its consolidated Order in NAGE Locals R14-68, 71, 73 and 96 v. FLRA, No. 85-1463 (D.C. Cir. Aug. 19, 1987). The court remanded the case for proceedings consistent with its decision in NTEU v. FLRA, 810 F.2d 295 (D.C. Cir. 1987).

B. Related Decision and Order of the Authority

In our decision on remand, we rescinded the Authority's previous order dismissing the Union's complaint and found that the Agency's refusal to bargain, to the extent consistent with law, over the Union's proposal during the term of the parties' agreement violated section 7116(a)(1) and (5) of the Statute. U.S. Army Corps of Engineers, Kansas City District, Kansas City, Missouri, 30 FLRA 1174 (1988) (Kansas City II). There was no assertion in the unfair labor practice case that the subject matter of the Union's proposal was nonnegotiable.

Therefore, the issue of whether the proposal now before us is within the duty to bargain was not resolved in Kansas City II. Id. at 1176.

The Proposal is set forth in the Appendix to this decision. The disputed portions are underlined.

III. The Negotiability of the Proposal As It Pertains to Debts Owed by Bargaining Unit Employees to Other Agencies

A. Positions of the Parties

The Agency contends that the proposal is outside the duty to bargain to the extent that it applies to debts which unit employees owe to another agency. It asserts that, as to such debts, the proposal (1) does not concern a condition of employment; (2) is inconsistent with law--5 U.S.C. § 5514(a)(2); and (3) is inconsistent with Government-wide regulations issued by the Office of Personnel Management (OPM). Agency statement of position at 3-6.

The Union contends that the proposal concerns a condition of employment, is consistent with law, and is not barred from negotiations by Government-wide or Agency regulations. Union response at 3-4.

B. Analysis and Conclusions

Under the Act, an agency may offset its employees' salaries to collect debts owed to the Government. In some cases, the agency employing the debtor and the agency to which the debt is owed are different agencies.

For example, the Department of Education might determine that an individual employed by the Department of the Army had defaulted on a student loan. In those circumstances, the creditor agency holding the debt (Education) would notify the salary-paying agency (Army) of the indebtedness. 5 U.S.C. § 5514(a)(1). Before the salary-paying agency may initiate the salary offset, however, the Act requires "the agency holding the debt" to provide the individual with notice of the determination of indebtedness, opportunities to inspect and copy records and to enter into a payment arrangement, and a hearing on the initial determination. 5 U.S.C. § 5514(a)(2).

The Agency contends that the Union's proposal that it negotiate the due process protections to be provided to members of the bargaining unit who are determined to be indebted to another agency is inconsistent with 5 U.S.C. § 5514(a)(2). Therefore, the Agency argues that the proposal is nonnegotiable insofar as it covers debts owed other agencies.

We agree with the Agency's argument. It is clear that the Agency correctly interprets the proposal: the Union intends the proposal to be "the sole procedure for appealing decisions under the Debt Collection Act" whether the debt is owed the Agency or another agency. Union response at 2. Therefore, we conclude that the Union seeks to negotiate a procedure with the Agency to be used to determine debts owed to it as well as to other agencies. However, 5 U.S.C. § 5514(a)(2) requires the agency "holding the debt" to provide an individual determined to be indebted with the procedures required by the Act. Congressional intent that the agency holding the debt will provide the procedures required by the Act is fully supported by the relevant legislative history. See S. Rep. No. 378, 97th Cong. 2d Sess. 24, reprinted in 1982 U.S. CODE CONG. & ADMIN. NEWS 3377, 3400.

Since the Union admits that the proposal is to constitute the "sole" procedure for unit employees, including unit employees who are indebted to agencies other than the Agency, the proposal conflicts with 5 U.S.C. § 5514(a)(2). Therefore, it is nonnegotiable to the extent that the Union seeks to negotiate procedures for debts owed to other agencies with the Agency. As already stated, the Act requires the agency "holding the debt" to provide such procedures. In view of this conclusion, we find it unnecessary to consider the Agency's additional arguments on this point.

The Agency claims that portions of the proposal are nonnegotiable even in regard to debts owed by unit employees to the Agency. Next, we will address these contentions.

IV. The Negotiability of the Proposal As It Pertains to Debts Owed the Agency

As noted above, the Act entitles an individual from whom an agency proposes to collect a debt to certain procedures, including written notice of the nature and amount of the indebtedness, an opportunity to inspect records, and an opportunity for a hearing and decision on the agency's determination on the existence and amount of the debt. 5 U.S.C. § 5514(a)(2). The Union's proposal establishes the procedures available to unit employees who are initially determined to be indebted. The procedures of the Act and as set forth in the proposal apply before any collection proceedings are commenced.

A. Section 1 and Section 2.b.4.

1. Positions of the Parties

The Agency contends that the underlined portions of these sections of the proposal are inconsistent with (1) the Act, (2) section 7121 of the Statute, and (3) 5 C.F.R. § 550.1104. The Agency maintains that sections 1 and 2.b.4. provide an employee with an option of using the negotiated grievance procedure to obtain a decision on the validity and amount of the initial determination of indebtedness.

The Agency argues that the use of the negotiated grievance procedure in this manner conflicts with the Act in two respects. First, the Agency argues that such use conflicts with section 5514(a)(2)(D), which grants the employee the right to a hearing. Section 7121(b)(3)(C) of the Statute, however, does not grant the employee the right to invoke a hearing before an arbitrator. Only the agency or the union can invoke arbitration. Second, the Agency argues that the proposed use of the negotiated grievance procedure in debt collection proceedings conflicts with section 5514(a)(2). The Agency argues that although section 5514(a)(2) provides that the hearing officer's decision shall be "final," an arbitration award is not "final" because exceptions may be filed to an award under section 7122 of the Statute.

The Agency states that 5 C.F.R. § 550.1104 provides that each agency must assure that the regulations governing collection of internal debts are uniformly and consistently applied to all its employees. The Agency notes that the negotiated grievance procedure can be used by unit employees only. The Agency argues that because the proposal would result in unit and nonunit employees using different procedures, the proposal conflicts with 5 C.F.R. § 550.1104.

The Agency acknowledges that section 5514(b)(2) of the Act provides that for purposes of section 7117(a) of the Statute, no regulation prescribed to carry out the provisions of section 5514(a)(2) shall be considered to be a Government-wide regulation. The Agency maintains, however, that section 5514(b)(2) applies only to regulations issued by an agency which apply to Federal employees who are not employees of that agency. The Agency claims that section 5514(b)(2) was not intended to permit negotiations in conflict with regulations issued by the Office of Personnel Management in the Code of Federal Regulations, including 5 C.F.R. § 550.1104.

The Union asserts that the Agency has misinterpreted the proposal. It argues that the proposed procedures do not prevent an employee from filing a grievance, as appropriate.

2. Analysis and Conclusions

We conclude that to the extent that the Department of the Army is the creditor agency, the disputed provisions are not inconsistent with the Act, the Statute, or 5 C.F.R. § 550.1104. The disputed parts of sections 1 and 2.b.4.: (1) preserve the scope of the parties' existing negotiated grievance procedure for an employee who is initially determined to be indebted, and (2) provide the employee with an explanation of his or her rights under the grievance procedure.

The Union does not intend the negotiated grievance procedure to either constitute--or be an optional alternative to--the procedures which are required by section 5514. The procedures set forth in the proposal constitute the procedures required by the Debt Collection Act and apply before collection proceedings are initiated. The proposal also states that the proposed procedure will not "abridge an employee's right to file a grievance." This statement does not add to what is already covered by the parties' negotiated grievance procedure. The negotiated grievance procedure covers all matters which fall within the definition in section 7103(a)(9) of the Statute, unless the parties agree to an exclusion. Newark Air Force Station and American Federation of Government Employees, Local 2221, 30 FLRA 616, 627 (1987).

The purpose of the procedures in the Debt Collection Act is to validate the existence and amount of indebtedness proposed to be collected by salary offset. See 5 U.S.C. § 5514(a)(2)(D). That process culminates in a review of the initial determination of indebtedness by a hearing officer, who issues a "final decision." 5 U.S.C. § 5514(a)(2). The "final decision" determines that a debt is owed in a specified amount and authorizes the commencement of collection proceedings. 5 U.S.C. § 5514(a)(2).

Until the proceedings required by section 5514(a)(2) have resulted in a final decision on the alleged debt or until the proceedings have been waived by the employee, the employee has no "complaint" concerning the employee's employment. Consequently, until the proceedings required by section 5514 are completed or waived, there is no grievance under section 7103(a)(9) of the Statute. See, for example, U.S. Department of Justice, Bureau of Prisons, Federal Correctional Institution (Ray Brook, New York), 29 FLRA 584, 591 (1987), petition for review filed sub nom. AFGE, Local 3882 v. FLRA, No. 87-1723 (D.C. Cir. Nov. 27, 1987) (until there was a final decision by the agency on the proposed action, no grievance under a contractual grievance procedure was involved).

If the proposed procedures resulted in a finding that a unit employee was indebted and led to authorization of collection proceedings, a complaint by the employee about the indebtedness would constitute a "grievance." The grievance would be covered by the negotiated grievance procedure, unless excluded by the parties. Nothing in the Act, including the provision for a final decision by a hearing officer, precludes a grievance over a determination of indebtedness or limits the authority of an arbitrator to review such a determination. See Department of Defense Dependents Schools and Overseas Education Association, 22 FLRA 142 (1986) (DoDDS).

In DoDDS, the Authority also decided that the availability of the negotiated grievance procedure to unit employees did not preclude the uniform application of the procedures required by section 5514 to all employees. 22 FLRA at 146. Consistent with our decision in DoDDS, we conclude that the disputed provisions are not inconsistent with 5 C.F.R. § 550.1104. See also, our discussion of 5 C.F.R. § 550.1104 in part IV.B. of this decision.

Therefore, we conclude that the disputed portions of section 1 and section 2.b.4. of the proposal are consistent with the Statute and the Act. Accordingly, these sections are within the duty to bargain.

B. Section 2.b. and Section 3

1. Positions of the Parties

The Agency contends that section 2.b. (establishing a 45-day notice period) and section 3 (requiring hearings which are held to be in the employee's commuting area and allowing arbitrators who are not Department of Defense employees to be hearing officers) are nonnegotiable because they: (1) conflict with the requirements of 5 C.F.R. § 550.1104 and 5 U.S.C. § 5514(b)(1) concerning the uniform application of agency collection procedures; (2) require the Agency to bargain over conditions of employment of nonunit employees; and (3) conflict with an Agency regulation for which there is a compelling need. The Agency also argues that Section 3 conflicts with section 7121 of the Statute.

The Union asserts that its proposal is consistent with the Act and Agency regulations. Union Response at 4. The Union also contends that the Act provides in section 5514(b)(2) that regulations implementing the procedural safeguards required under section 5514(a)(2) will not "pre-empt negotiations." Id. Finally, the Union contends that the Authority's decision in DoDDS, pertaining to grievances over debt collection matters, must be read as an implicit rejection of the Agency's contention regarding a compelling need for Agency regulations which implement the Act's uniformity requirement. Id.

2. Analysis and Conclusions

For the reasons which follow, we conclude that sections 2.b. and 3 of the proposal are within the duty to bargain even though they conflict with regulations prescribed by the Department of Defense.

a. Section 5514(b)(1) Does Not Bar Negotiation Over the Proposal

The Act requires agencies to issue regulations to carry out its provisions and states: "Regulations prescribed by the Secretaries of the military departments shall be uniform for the military services insofar as practicable." 5 U.S.C. § 5514(b)(1). The Agency claims that section 5514(b)(1) requires uniform regulations to be prescribed for the military services and concludes that "this requirement cannot be met if the agency is obligated to bargain on the [collection procedures] to be applied in each of its more than 600 bargaining units." Agency statement of position at 7. Based on this conclusion, the Agency argues that sections 2.b. and 3 of the proposal are inconsistent with section 5514(b)(1) and, therefore, are nonnegotiable.

We conclude that section 5514(b)(1) does not require the Agency to establish uniform procedures applicable to civil service employees and members of the Armed Forces. Therefore, we reject the Agency's contention that sections 2.b and 3 of the proposal are nonnegotiable because they are inconsistent with that 5 U.S.C. § 5514(b)(1).

First, section 5514(b)(1) requires uniformity only "insofar as practicable." The Act and its legislative history are silent as to the meaning of that phrase. At a minimum, however, the phrase "insofar as practicable" indicates Congressional intent that absolute uniformity is not required. If Congress had intended to mandate uniformity, it would not have expressly authorized agencies to exercise their discretion with regard to considerations of practicability. Consequently, in the absence of any expression of Congressional intent to the contrary, we find that the phrase, "insofar as practicable," provides agencies with sufficient flexibility to carry out their duty to bargain under the Statute.

Our conclusion is supported by section 5514(b)(2), which precludes a regulation "prescribed to carry out subsection(a)(2)" from being "considered to be a Government-wide rule or regulation" for the purposes of section 7117(a) of the Statute. This section indicates that Congress was aware of the provisions of the Statute which establish the duty to bargain over the conditions of employment of bargaining unit employees. It further indicates, as discussed in more detail in section b., below, that Congress intended to preserve the scope of bargaining established under the Statute.

Second, although the Act and its legislative history do not provide an explanation of the phrase "military services" in section 5514(b)(1), we conclude that the phrase "military services" refers to the "Armed Forces or Reserve of the Armed Forces." The Act covers both civilian employees and members of the "Armed Forces or Reserve of the Armed Forces." See 5 U.S.C. § 5514(a)(1). If Congress intended by subsection (b)(1) to require the regulations prescribed by the Secretaries of the military departments to be uniform for all employees of those departments, the qualifier "for the military services" would be superfluous. Furthermore, the phrase "military service" is used in various other parts of the U.S. Code in contexts where it is clear that the phrase is not used to refer to "civil service" employees. See for example, 38 U.S.C. § 1401; 42 U.S.C. § 1522; and 50 U.S.C. app. § 511. Finally, the Agency's interpretation of section 5514(b)(1) leads to the conclusion that Congress intended unit employees of the military departments to have fewer bargaining rights than all the other civilian employees in the Government. Nothing in the Act or its legislative history supports that conclusion.

In sum, we conclude that sections 2.b. and 3 of the proposal are not inconsistent with section 5514(b)(2) of the Act. That section does not require the Agency to establish uniform procedures applicable to unit employees and members of the Armed Forces.

b. OPM Regulations Implementing the Debt Collection Act Are Government-wide Regulations Under the Statute

Under section 5514(b)(1), agencies must "prescribe regulations" to carry out the Act, including the procedures required by section 5514(a)(2). Under section 5514(b)(2), "no regulation prescribed to carry out subsection (a)(2) of this section shall be considered to be a Government-wide rule or regulation" for the purposes of section 7117(a) of the Statute.

The Agency states that under section 5514(b)(1), agencies must issue regulations pertaining to debts which are owed by (1) Federal employees who are not employed by the Agency, and (2) an agency's own employees. The Agency asserts that section 5514(b)(2) applies only to the regulations which concern debts which are owed to that agency by a Federal employee who is not employed by the agency. The Agency concedes that under section 5514(b)(2), those regulations are not Government-wide within the meaning of section 7117 of the Statute so as to bar negotiations. The Agency claims, however, that section 5514(b)(2) does not apply to regulations issued by OPM and, therefore, that OPM regulations regarding the Debt Collection Act are Government-wide within the meaning of section 7117.

We agree with the Agency's position. We find that this interpretation is consistent with the plain meaning of the Act and is consistent with the scope of bargaining established under the Statute.

Section 7117(a) of the Statute provides, among other things, that Government-wide rules or regulations bar negotiations on conflicting bargaining proposals. Only a few Federal agencies, such as OPM or the General Services Administration, have authority to issue regulations which affect a broad segment of the Federal workforce and are, therefore, considered to be "Government-wide" within the meaning of the Statute. See, for example, Overseas Education Association, Inc. and Department of Defense, Office of Dependents Schools, 22 FLRA 351, 353, aff'd sub nom. Overseas Education Association, Inc. v. FLRA, 827 F.2d 814 (D.C. Cir. 1987).

Section 5514(b)(2) states that "no regulation prescribed" to carry out section 5514(a)(2) shall be considered to be Government-wide for purposes of section 7117 of the Statute. Section 5514(b)(2) must be read in the context of the requirement in the immediately preceding subsection: 5514(b)(1). Under section 5514(b)(1), "the head of each agency shall prescribe" regulations to carry out the Debt Collection Act.

Section 5514(b)(1) of the Act provided "each agency" of the Government with the authority to issue regulations which apply to all Federal employees who are indebted to that agency. By enacting section 5514(b)(2), Congress prevented the regulations of "each agency" from being considered "Government-wide." Congress thereby preserved the scope of bargaining established under the Statute: only those regulations which are issued by agencies with traditional Government-wide roles, such as OPM, and which apply to personnel policies and matters affecting a broad segment of the Federal workforce can bar the negotiation of conflicting bargaining proposals.

Therefore, we conclude that OPM regulations implementing the Debt Collection Act are Government-wide regulations within the meaning of the Statute.

c. The Proposal Does Not Violate OPM Regulations and Does Not Directly Determine the Conditions of Employment of Nonunit Employees

OPM regulations state that each agency is "responsible for assuring that the regulations governing collection of internal debts are uniformly and consistently applied to all its employees." 5 C.F.R. § 550.1104. For the following reasons we conclude that sections 2.b. and 3 of the proposal do not conflict with section 550.1104 or with the Statute.

The Agency argues that in order to comply with section 550.1104, it would be required to apply sections 2.b. and 3 of the proposal to all employees in the Agency, not just to employees in the bargaining unit. We rejected similar arguments concerning the impact of OPM regulations on a proposal to extend "bumping and retreat" rights in a reduction-in-force (RIF) to excepted service employees. See Merit Systems Protection Board Professional Association and Merit Systems Protection Board, 31 FLRA 258 (1988), petition for review filed sub nom. U.S. Merit Systems Protection Board v. FLRA, No. 88-1268 (D.C. Cir. Apr. 6, 1988) (MSPB). We reject the Agency's arguments here for the same reasons.

5 C.F.R. § 550.1104 provides only that regulations must be applied in a uniform and consistent manner. Section 550.1104 does not prohibit the Agency from considering bargaining unit status in determining the procedures which will apply under the Act. The requirement to assure uniform and consistent application of the regulations governing collection of debts allows agencies flexibility. The requirement does not determine the content of the procedures which will be applied, nor does it mandate that the same procedures must be applied to all employees.

Therefore, this case is distinguishable from cases involving proposals to negotiate over "competitive areas" for RIF purposes. OPM regulations require a competitive area to be "defined solely in terms of an agency's organizational unit(s) and geographical location, and it must include all employees within the competitive area so defined." 5 C.F.R. § 351.402(b). [Emphasis added.] Consistent with 5 C.F.R. § 351.402(b), an agency may not consider bargaining unit status in establishing competitive areas. Accordingly, proposals seeking to limit a competitive area solely to bargaining unit positions are nonnegotiable because they are inconsistent with this Government-wide regulation. See for example, National Treasury Employees Union and Department of Health and Human Services, Region X, 25 FLRA 1041, 1043-44 (1987).

Because we find that nothing in the OPM regulation precludes the Agency from negotiating procedures applicable to bargaining unit employees only, it follows that the proposal would not determine the procedures applicable to the collection of the debts of nonunit employees. Consequently, the proposal would not directly determine the conditions of employment of nonunit employees.

d. Agency Regulations Do Not Bar Negotiations

The Agency's argument that there is a compelling need for Department of Defense regulations concerning collection procedures results from its interpretation of 5 U.S.C. § 5514(b)(1). That is, the Agency claims that the regulations implement in an "essentially nondiscretionary manner the mandate of a Federal statute" to apply uniform procedures throughout the Agency. Agency statement of position at 7. Since we have found that section 5514(b)(1) does not mandate such uniformity, there is no basis to sustain the Agency's claim of compelling need. Therefore, the DoD regulations do not bar negotiations over the portions of sections 2.b. and 3 of the proposal which conflict with those regulations.

e. Section 3 of the Proposal Does Not Conflict With Section 7121 of the Statute

As we explained with respect to section 1 of the proposal, the proposal does not grant an employee the option of using either the proposed procedures in connection with debt collection under the Act or the grievance procedure negotiated under the Statute. Rather, the proposed procedures, which add specifics to the general procedures set forth in the Act, are intended to be the "sole" procedures available to unit employees who are initially determined to be indebted. Union response at 2.

The proposed procedures apply before debt collection proceedings are initiated. Until the proposed procedures have been completed or waived, there is no grievance under section 7103(a)(9) of the Statute. See section IV. A. 2., above. The proposed procedures are separate from and apply before the negotiated grievance procedure. Therefore, the proposed procedures do not infringe in any manner on the exclusivity of the negotiated grievance procedure for resolving matters subject to its coverage under section 7121(a)(1).

C. Section 4

Section 4 requires the Agency to "waive assessment of any charges" relating to the cost of processing claims.

1. Positions of the Parties

The Agency contends that Section 4 requires a blanket waiver of any charges relating to the cost of processing claims of indebtedness owed to the United States by its employees. Supplemental statement of position at 1. The Agency asserts that a blanket waiver of charges is inconsistent with law. It cites the Authority's decision in National Federation of Federal Employees, Local 29 and U.S. Army Engineer District, Kansas City, Mo., 21 FLRA 101 (1986) (NFFE, Local 29), in support of its argument.

The Union asserts that this section of the proposal does not refer to interest on the repayment of debts which the NFFE, Local 29 case addressed. Rather, the Union states that it intends section 4 to cover only the additional assessment of processing costs. Union Response at 5.

2. Analysis and Conclusions

As relevant here, 31 U.S.C. § 3717(e)(1) requires an agency to assess charges covering the cost of processing delinquent debts owed to the United States. Subsection (e) of section 3717 provides in relevant part:

(e) The head of an executive or legislative agency shall assess on a claim owed by a person--

(1) a charge to cover the cost of processing and handling a delinquent claim[.]

We conclude that the plain wording "shall" is intended to be mandatory. Therefore, an agency does not have unlimited discretion to waive processing charges. See NFFE, Local 29, 21 FLRA 101, 106 (1986).

The administrative costs of processing claims of debts owed to the United States can be waived only if justified in the circumstances of an individual case in accordance with the standards for waiver set forth in pertinent regulations. Id. at 110. There is no statutory or regulatory provision which permits a blanket waiver of interest charges or the processing charges encompassed by Section 4 of this proposal. Id. at 110. A waiver is permissible only when an agency settles a claim or "determines that collection of these charges would be against equity and good conscience or not in the best interests of the United States." 4 C.F.R § 102.13(g).

Section 4 of the proposal constitutes a blanket waiver of charges connected with processing delinquent claims owed to the United States by bargaining unit employees. Accordingly, Section 4 conflicts with the standards for the waiver of processing costs set forth in 4 C.F.R. § 102.13(g), which provides for waiver only in particular instances and on a case by case basis. That regulation does not provide an agency with discretion to waive such costs without regard to the circumstances surrounding the delinquent claim. Therefore, we conclude that Section 4 is outside the duty to bargain because it is inconsistent with 31 U.S.C. § 3717(e)(1) and 4 C.F.R. § 102.13(g). In view of our conclusion, we find it unnecessary to consider the Agency's other contentions concerning the nonnegotiability of Section 4.

V. Order

The Agency must upon request, or as otherwise agreed to by the parties, bargain on Sections 1, 2.b., 2.b.4., and 3 of the Union's proposal insofar as it pertains to debts owed by employees to the Agency.(2)

The Union's petition for review as it relates to Section 4 of the proposal is dismissed.

The Union's petition for review as it relates to section 2.b.7 of Article 31 and to Article 32 is dismissed without prejudice to the Union's right to file a negotiability appeal if the conditions governing review of negotiability issues are met and if the Union chooses to file such an appeal.

Issued, Washington, D.C.,

________________________
Jerry L. Calhoun, Chairman
Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY

APPENDIX

[The underlined portions of the Union's proposal are in dispute.]

Article 31 - Collection of Debts Owed the U.S. Government

Section 1. Purpose. The purpose of this article is to define the procedures for collection of debts owed the U.S. Government by unit employees. This article will not, in any way, abridge employee rights under any appropriate law, rule or regulation, nor will it abridge an employee's right to file a grievance, under the procedure of Article 9 or any appropriate statutory appeal.

Section 2. Notification. When the head of the agency or his/her designee determines that an employee is indebted to the United States, or when the head of the agency or his/her designee is notified by the head of any agency or his/her designee, that an employee is indebted to the United States for debts which the government is entitled to be repaid, the following procedures will apply:

a. The employee will be notified, in writing, by the agency that a debt is owed.

b. The employee will be given a minimum of forty-five days written notice; this notice will contain, at a minimum, the following information:

1. nature of indebtedness;

2. amount of indebtedness;

3. notice of the agency's intent to initiate proceedings to collect the debt through payroll deduction; not to exceed 15 percent of the employee's disposable pay per pay period;

4. an explanation of the employee's rights, under appropriate laws, rules and regulations and the Negotiated Agreement;

5. an opportunity to review/inspect and/or copy any relevant Government record relative to the debt, and location of such records, and if such records are not reasonably available, that such records will be made available and that all time frames will be extended until such records are reasonably available;

6. the opportunity to negotiate a written agreement for repayment of the debt; and

7. the opportunity to request a hearing, if requested within twenty days of receipt of the written notice, relative to the existence and/or amount of the debt or the terms of a repayment agreement.

Section 3. Hearing. The hearing referred to in Section 2, will, if requested in a timely manner, be held within the employee's commuting area. The hearing will be conducted by an impartial individual, who is not under the supervision or control of the Agency, normally a recognized arbitrator, if selected by procedures similar to those of Article 10, Section 2, or an administrative law judge. The hearing officer's fees and expenses shall be borne by the agency. The hearing officer shall issue a final decision within sixty days of receipt of the request for the hearing.

Section 4. Interest and/or Charges. The Employer will waive assessment of any charges relative to the cost of processing and handling delinquent claims on any indebtedness.




FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

1. The Union withdrew its petition for review concerning Section 2.b.7, providing a 20-day period in which to request a hearing, and the phrase "Interest and/or" from Section 4. We will therefore not consider those matters further. The Union further states that it "would like to change" the proposed Section 2.b.7 to provide a 15-day period. Union Response at 1. The Agency has not had an opportunity to allege or state its position that this new wor