33:0075(9)AR - - GSA Region 9 and AFGE Local 2600 - - 1988 FLRAdec AR - - v33 p75
[ v33 p75 ]
The decision of the Authority follows:
33 FLRA No. 9
FEDERAL LABOR RELATIONS AUTHORITY
GENERAL SERVICES ADMINISTRATION
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
October 14, 1988
Before Chairman Calhoun and Member McKee.
I. Statement of the Case
This matter is before the Authority on exceptions to the award of Arbitrator M. Zane Lumbley filed by the American Federation of Government Employees, Local 2600 (the Union) under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The General Services Administration, Region 9 (the Activity) did not file an opposition.
The Arbitrator found that the Activity did not violate the parties' collective bargaining agreement when it refused to pay certain employees cash awards of 3 percent for outstanding performance and 1.5 percent for highly successful performance. The Arbitrator dismissed the grievance. For the reasons stated below, we deny the Union's exceptions.
II. Background and Arbitrator's Award
The Activity pays cash awards to employees performing at the highly successful and outstanding levels. The previous agreement, which expired in 1985, specified the rate at which cash awards were to be paid. It required a payment of 1.5 percent of the annual salary rate to any employee rated highly successful and 3 percent of the annual salary rate to any employee rated outstanding.
When the parties negotiated a new collective bargaining agreement, the required rates were eliminated from the agreement following the Authority's decision in National Treasury Employees Union and Internal Revenue Service, 14 FLRA 463 (1984). In that case, the Authority held that union participation in the determination of rates of incentive pay to be awarded to employees for superior performance interfered with managements's rights under section 7106(a) of the Statute. The required rates were replaced with the following wording in Article 20, Section 1(A)(3) of the parties' new agreement:
The parties agree that awards are an important factor in how management motivates employees to meet goals and objectives. Accordingly, the nature of (e.g. whether honorary or monetary), the amount of, and the circumstances under which awards will be given are decisions reserved to management.
The controversy in this case arose in fiscal year 1987. Various internal management directives circulated among different levels of the Activity concerning what percentages of salary should be given for cash awards for outstanding and highly successful ratings. Initially, the Activity recommended that awards of 3 percent be given for outstanding ratings and 1.5 percent for ratings of highly successful. However, following internal management deliberations concerning the Activity's budget and the size of the pool of employees eligible for awards, the Activity revised the percentages for its various divisions. As a result, the employees in the Activity's Federal Supply Customer Service Bureau in the Pacific Northwest (FSSB-North) received awards of .75 percent of their annual salary rate for highly successful performance and 1.65 percent of their annual salary rate for outstanding performance. Those rates were lower than those received by other employees in the Activity's other Federal Supply Service divisions.
The Union filed a grievance alleging that the Activity violated Article 4, Section 1, and Article 20, Section 2 of the parties' agreement. Article 4, Section 1 of the agreement provides as follows:
In all matters relating to personnel policies, practices, and other conditions of employment, the Employer will have due regard for the obligations imposed by the Statute and this Agreement.
Article 20, Section 2 provides:
The Employer agrees to provide incentives and awards for employees who are honored under these programs for either their job performance, or the adoption of their suggestion or recommendation.
The Union also alleged that the Activity violated its initial awards policy, which called for awards of 3 percent for outstanding ratings and 1.5 percent for highly successful ratings.
The matter was submitted to arbitration on the following stipulated issue:
1. Did the refusal of the Federal Supply Customer Service Bureau in the Pacific Northwest (FSSB-North) to pay certain employees cash awards of three percent (3.0%) for outstanding performance and one and one-half percent (1.5%) for highly successful performance violate either Article 4, Section 1 or Article 20, Section 2 of the National Agreement?
2. If so, what is the appropriate remedy?
The Arbitrator dismissed the grievance. He found that the Activity did not violate either Article 4, Section 1, or Article 20, Section 2 of the parties' national agreement by its refusal to pay FSSB-North employees cash awards of 3 percent for outstanding performance and 1.5 percent for highly successful performance in fiscal year 1987.
The Arbitrator found that Article 20, Section 1(A)(3) of the parties' agreement reserves to management the right to make unilateral determinations with respect to performance awards. He found that the only arguable qualifications to this management right were those set forth in Article 4, Section 1, and Article 20, Section 2 of the agreement. The Arbitrator stated that because of those two provisions, the Activity must have "due regard" for the Statute and the parties' agreement, and must "apply awards criteria to unit employees in a fair and equitable manner." Award at 9.
The Arbitrator also determined that there was no violation of the Statute. He found that the Activity had no obligation "either to inform the Union of any changes of position with respect to award amounts during its deliberations or of the final amounts selected or to bargain with the Union over the final amounts selected." Award at 10. The Arbitrator stated that the fact that the Authority has found these matters to be negotiable in response to remands of certain Authority decisions by the U.S. Court of Appeals for the District of Columbia Circuit cannot change those findings. See National Treasury Employees Union and Internal Revenue Service, 27 FLRA 132 (1987). He ruled that whatever the parties negotiated into their agreement was part of that agreement until it expired. The Arbitrator concluded that the Activity had "no obligation during the life of the Agreement to return to any pre-Agreement practice of discussing award amounts with the Union before implementing them." Award at 11.
The Arbitrator also found that the FSSB-North employees were not treated unfairly or inequitably. The Arbitrator reiterated his position that under Article 20, Section 1(A)(3) of the parties' agreement, the Activity had the right to determine the nature and amount of cash awards and the circumstances under which they would be given. Based on this finding, he determined that Article 20, Section 2 of the parties' agreement could refer only to the way in which employees were treated in relation to each other. The Arbitrator found that the Activity's approach in considering its budget and the size of the pool of employees eligible for cash awards was a way to effect fair and equitable distribution of award funds. Award at 11-13.
Additionally, the Arbitrator found nothing in the Activity's actions that would amount to a waiver of its rights under Article 20, Section 1(A)(3) to make decisions concerning awards.
As the Arbitrator found that the Activity did not violate the Statute, treat eligible FSSB-North employees in a manner that was unfair or waive its Article 20, Section 1(A)(3) rights, he dismissed the grievance.
The Union contends that the award is contrary to the Statute. In particular, the Union disputes the Arbitrator's finding that the Activity was under no obligation during the life of the parties' agreement to return to any pre-agreement practice of discussing award amounts with the Union before they were implemented. Exceptions at 2. The Union asserts that it did not waive its rights to negotiate over performance awards, but was precluded from negotiating over that matter because of Authority decisions which held that union participation in the determination of rates of incentive pay to be awarded to employees for superior performance interfered with management's rights under section 7106(a) of the Statute. The Union notes that the Authority's position was rejected by the U.S. Court of Appeals for the District of Columbia Circuit and that on remand, the Authority found that section 7106(a)(2)(A) and (B) of the Statute did not confer on management the sole prerogative to determine whether to reward superior performance. Exceptions at 2.
Additionally, the Union