33:0229(26)AR - - NTEU Chapter 15 and IRS (Los Angeles District) - - 1988 FLRAdec AR - - v33 p229
[ v33 p229 ]
The decision of the Authority follows:
33 FLRA No. 26
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL TREASURY EMPLOYEES
UNION, CHAPTER 15
INTERNAL REVENUE SERVICE
(LOS ANGELES DISTRICT)
October 21, 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 Carlton J. Snow. The sole issue presented to the Arbitrator was whether the grievance was arbitrable under the terms of the parties' collective bargaining agreement. The Arbitrator concluded that the grievance was arbitrable and directed that the parties proceed on the merits of the case.
The Internal Revenue Service (Los Angeles District) (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. The National Treasury Employees Union, Chapter 15 (the Union) filed an opposition to the exceptions.
For the reasons set forth below, we find that the Agency failed to demonstrate that the award is contrary to law, regulation or the parties' collective bargaining agreement. Accordingly, we deny the exceptions.
II. Background and Arbitrator's Award
At the time of the events giving rise to the grievance, the grievant occupied the position of office collection representative. During the course of her duties, she collected $1,176.91 in cash from several delinquent taxpayers. Ordinarily, money collected in this manner is kept in an office safe. The employees who possessed the office safe combination were not in the office when the cash payments were made, so the grievant locked the money in her desk. The money was later found to be missing. The grievant was determined by local agency management to be negligent in the safekeeping of monies paid by taxpayers. She was assessed and repaid the amount of the loss.
The Union filed a grievance on behalf of the employee challenging the Agency's failure to provide the employee with a hearing before determining that she was negligent. The issue before the Arbitrator was whether the Agency's determination of employee negligence was arbitrable under the parties' collective bargaining agreement.
The Arbitrator noted that as an employee who receives money for the Government, the grievant is an "accountable officer." Award at 7. Accountable officers are liable for any losses of funds received in the course of their official duties. A statutory procedure is available by which agency management can request relief from liability on an employee's behalf from the Comptroller General. In this case, local management decided to request relief on behalf of the employee. The request was submitted to the Assistant Regional Commissioner for the Internal Revenue Service who was responsible for filing the formal request for relief with the Comptroller General. The Assistant Regional Commissioner returned the request to local management for the purpose of reconciling inconsistencies in the request. Local management did not reconcile the inconsistencies or resubmit the request for relief. Instead, local management decided to assess the employee the amount of the loss pursuant to provisions contained in the Internal Revenue Code.
The Agency argued before the Arbitrator that the grievance is not arbitrable because it concerns a matter covered by Federal statutes. The Agency further argued that a finding of arbitrability would interfere with management's right to determine its internal security practices under section 7106(a)(1) of the Statute, and cited to various Authority decisions in which proposals concerning recovery for loss of Government property were found not to constitute appropriate arrangements under section 7106(b)(3) of the Statute. Finally, the Agency argued that arbitration of the grievance is not mandated since other remedies were available to the grievant for seeking relief from the assessment.
The Union argued that the Agency's determination as to the employee's negligence is grievable and arbitrable under the parties' agreement.
The Arbitrator found that the grievance was grievable under the parties' agreement. In reaching this result, he found that the grievance did not concern a matter that is specifically provided for by Federal law or a matter that was expressly excluded from the negotiated grievance procedure by the terms of the agreement itself. The Arbitrator also found that arbitrability of the grievance was not precluded by any other provisions of the agreement.
As to the Agency's argument concerning the applicability of Federal statutes, the Arbitrator noted that 31 U.S.C. § 3527(a) provides a mechanism by which accountable officers, such as the grievant, could be relieved of liability for a loss of funds.(1) Among other things, the head of an agency must determine that an employee is not negligent before seeking relief from the Comptroller General. In this case, the Arbitrator noted that there was no challenge to the Comptroller General's exclusive right to relieve accountable officers from liability. Rather, the grievance concerned the Agency head's decision that the grievant was negligent. The Arbitrator found that an Agency head determination of nonnegligence was a pre-condition to seeking relief under 31 U.S.C. § 3527(a). The provisions of section 3527(a) become operative after the Agency head has decided that an employee is not negligent. Award at 20. Therefore, the Arbitrator concluded the grievance did not concern a matter that was specifically provided for by Federal law.
The Arbitrator also examined decisions of the Authority and the Comptroller General on which the Agency relied to support its position that the grievance was outside the scope of a negotiated grievance procedure because it was a matter specifically covered by Federal law. The Arbitrator found that the decision of the Comptroller General in Matter of Forest Service, Comp. Gen. No. B-213804 (Aug. 13, 1985) (Forest Service) (unpublished), and the decisions of the Authority in National Treasury Employees Union and Internal Revenue Service, San Francisco, California, 14 FLRA 65 (1984) (Internal Revenue Service) and American Federation of Government Employees, AFL-CIO, Local 225 and Department of the Army, USARRADCOM, Dover, New Jersey, 15 FLRA 607 (1984), were not dispositive of the issue in this case.
The Arbitrator also rejected both the Agency's argument that arbitrability of the grievance would interfere with the Agency's right to determine its internal security practices under section 7106(a)(1) of the Statute and the Agency's reliance on prior Authority negotiability decisions. The Arbitrator found that the issue in this case was the scope of the grievance procedure. The issue presented did not involve questions as to limitations on employee liability or standards of liability which might impinge on an agency's internal security practices, or constitute an excessive interference with the exercise of a management right. Award at 24 and 26.
Finally, the Arbitrator rejected the Agency's argument that other available remedies at law precluded arbitrability of the grievance in this case. Id. at 26. The Arbitrator found that although arbitration was not the grievant's only remedy, the issue before him was whether arbitration of the grievance was precluded. The availability of other remedies, therefore, was not relevant.
Having found that arbitration of the grievance was not precluded, the Arbitrator directed the parties to proceed to the merits of the case. Award at 29.
III. Positions of the Parties
A. Agency's Exceptions
The Agency excepts to the award for three reasons: (1) the Arbitrator failed to consider the impact of section 7103(a)(14)(C) of the Statute on the scope of the negotiated grievance procedure; (2) the Arbitrator erroneously interpreted when the Federal statutes involved become operative; and (3) the award contradicts the Internal Revenue Code.
As to its first exception, the Agency states that section 7103(a)(14)(C) of the Statute excludes from the definition of conditions of employment matters that are specifically provided for by Federal law. The Agency argues that the "comprehensive scheme setting forth the requirements for relief for accountable officers has been established by federal statute, and submitting the question of whether relief is to be sought from the Comptroller General to arbitration directly interferes with that statutory scheme." Exceptions at 3. The Agency contends that both Authority decisions and decisions of the Comptroller General have established that statutes and regulations pertaining to accountable officers were intended to constitute exclusive procedures which would remove accountable officer cases from the scope of negotiations and which would exclude such cases from the scope of negotiated grievance procedures.
The Agency's second exception goes to the Arbitrator's determination that 31 U.S.C. § 3527(a) does not come into operation until an agency head has exercised discretion in deciding whether an employee has been negligent. The Agency argues to the contrary, contending that "principles determining accountability and relevant relief statutes come into operation immediately upon an employee's loss of Government funds." Exceptions at 8. Further, the Agency argues that the Arbitrator erred in deciding that because an agency head has discretion under 31 U.S.C. § 3527(a), the agency head's determination is arbitrable. Instead, the Agency argues that because the agency head has discretion, the matter is one which is specifically provided for by Federal statute and, therefore, neither bargainable nor arbitrable. In support of this assertion, the Agency relies on the decisions in Department of the Navy, Military Sealift Command v. FLRA, 836 F.2d 1409 (3d Cir. 1988) (Military Sealift Command) and Department of the Treasury, Bureau of Engraving and Printing v. FLRA, 838 F.2d 1341 (D.C. Cir. 1988) (Bureau of Engraving and Printing).
The Agency's third exception concerns the effect of 26 U.S.C. § 7803(c) on the arbitrability of the grievance.(2) The Agency argues that § 7803(c), part of the Internal Revenue Code, provides exclusive procedures for review of assessments against Agency employees, which procedures do not include arbitration. Exceptions at 10. The procedures available to employees are the same as those afforded to assessed taxpayers who have avenues of appeal through the judicial system. As a part of this system, an assessed employee is required to file a claim for refund or credit through procedures outlined in the Internal Revenue Code, which the grievant here failed to do. In any event, the Internal Revenue Code does not allow for arbitration of the grievant's assessment in this case, according to the Agency.
B. Union's Opposition
The Union argues that the Agency has failed to demonstrate that the Arbitrator's award is contrary to law, rule or regulation, or that it is otherwise deficient. More particularly, the Union claims that the issue raised in the grievance is whether the Agency head's determination of employee negligence is arbitrable. The Union concedes that the Comptroller General has sole authority to authorize relief in this case. In response to the Agency's first exception that section 7103(a)(14)(C) excludes the grievance from arbitral review, the Union contends that the Arbitrator correctly determined that the Agency head's determination was made prior to the invocation of the procedures set forth in 31 U.S.C. § 3527(a). Therefore, the Agency head's determination was not a matter specifically provided for by Federal law within the meaning of section 7103(a)(14)(C).
Similarly, as to the Agency's second exception, the Union argues that 31 U.S.C. § 3527(a) does not come into play until after an agency head has made a determination concerning employee negligence. The Union points out that the Comptroller General has so recognized in 59 Comp. Gen. 113 (1979). Finally, as to the Agency's third exception, that the award is inconsistent with the Internal Revenue Code, the Union claims that the sections of the Code relied on are not applicable to the grievance since there is no dispute regarding the accountability of lost funds and no action is being sought in Federal court.
IV. Analysis and Conclusions
We conclude that the Agency has not established that the Arbitrator's award is deficient on any of the grounds set forth in section 7122(a) of the Statute. The Agency has failed to establish that the award is contrary to any law, rule, or regulation, or that the award is deficient on other grounds similar to those applied by the Federal courts in private sector labor relations cases.
In agreement with the Arbitrator, we reject the Agency's arguments that the grievance concerns a matter that is specifically provided for by Federal law so as to remove it from the scope of the negotiated grievance procedure. In reaching this result, we have examined the provisions of 31 U.S.C. § 3527(a). This section empowers the Comptroller General to relieve employees for the physical loss or deficiency of public money or to authorize reimbursement for the amount of the loss or deficiency paid by the employee as restitution when three conditions are met: (1) the head of an agency decides that the loss or deficiency occurred under certain circumstances and was not the result of fault or negligence by the employee; (2) the loss or deficiency was not the result of an illegal or incorrect payment; and (3) the Comptroller General agrees with the decision of the agency head. The Agency argues that 31 U.S.C. § 3527(a) establishes the exclusive procedure for seeking relief in accountable officer cases.
The Authority previously has discussed the scope and coverage of negotiated grievance procedures under section 7121 of the Statute for resolving disputes where statutory or internal agency appeals procedures are also available to resolve those disputes. In Department of Defense Dependents Schools and Overseas Education Association, 22 FLRA 142 (1986) (DODDS), the Authority traced the pertinent legislative history of section 7121. The Authority found that except for matters covered by section 7121(d) and (e), negotiated grievance procedures were intended to be the exclusive procedures for resolving disputes within their coverage unless the statutory or internal agency appeal procedure involved was intended to be the exclusive procedure for resolving the matter. The Authority further noted that where laws other than the Statute limit the scope of negotiated grievance procedures, there have been clear, specific indications that the statutory procedures were intended to be exclusive. In DODDS, in the absence of any such clear, specific indication, the Authority rejected an agency argument that a grievance challenging an administrative determination of employee indebtedness was precluded by law from coverage under the negotiated grievance procedure. See also National Federation of Federal Employees, Local 29 and U.S. Army Corps of Engineers, Kansas City District, Kansas City, Missouri, 32 FLRA 721 (1988), petition for review filed sub nom. United States Army Corp of Engineers, Kansas City District v. FLRA, No. 88-2403 (8th Cir. Sept. 19, 1988) in which we found negotiable a proposal which would permit unit employees to utilize a negotiated grievance procedure for grieving a finding of employee indebtedness under the Debt Collection Act of 1982.
In this case, the Agency's support for its assertion that 31 U.S.C. § 3527(a) establishes an exclusive procedure rests on the decision of the Comptroller General in Forest Service and various decisions of the Authority and the courts. For the reasons which follow, we do not find the Agency's argument to be persuasive.
In Forest Service, the Comptroller General held that negotiated grievance procedures do not apply to accountable officers because 31 U.S.C. § 3527(a) constitutes the exclusive administrative relief in accountable officer cases. In so concluding, the Comptroller General relied, in large measure, on his interpretation of section 7103(a)(14)(C) of the Statute which excludes from the definition of conditions of employment matters that are specifically provided for by Federal statute. The Comptroller General found that as 31 U.S.C. § 3527(a) specifically and comprehensively governs the resolution of questions of responsibility of accountable officers for losses of public funds, such questions may not be submitted to a negotiated grievance procedure.
The decision in Forest Service does not lead us to conclude that the grievance here concerns a matter that is specifically provided for by Federal law so as to be outside the scope and coverage of the negotiated grievance procedure. First, it is the Authority and not the Comptroller General that is entrusted with interpreting provisions of the Statute. 5 U.S.C. § 7105. Consequently, whether a matter falls within the exclusion of section 7103(a)(14)(C) is a matter left for the Authority to determine.
Second, section 7103(a)(9) of the Statute defines the term "grievance" expansively. Newark Air Force Station and American Federation of Government Employees, Local 2221, 30 FLRA 616 (1987) (Newark). For example, a grievance may include "any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment." 7103(a)(9)(C)(ii). Additionally, as we noted in Newark, id. at 626, Congress intended that "[a]ll matters that under the provisions of law could be submitted to the grievance procedures shall in fact be within the scope of any grievance procedure negotiated by the parties unless the parties agree as part of the collective bargaining process that certain matters shall not be covered by the grievance procedures." Joint Explanatory Statement of the Committee on Conference, H.R. Rep. No. 1717, 95th Cong. 2d Sess. 157, reprinted in 1978 U.S. Code Cong. & Admin. News 2723, 2891.
Here, the Union filed a grievance challenging the Agency's failure to provide the grievant with a hearing before determining that she was negligent. The authority of an agency to make determinations of employee negligence is provided for in 31 U.S.C. § 3527(a). However, nothing in that section clearly and specifically prevents an employee from challenging a management determination of negligence. We find, therefore, that the grievance does not concern a matter that is specifically provided for by Federal statute so as to remove it from the definition of condition of employment and from coverage under the negotiated grievance procedure.
We further find that reliance by the Comptroller General in Forest Service and by the Agency in this proceeding on the Authority's decision in Internal Revenue Service is misplaced. Proposal 2 in Internal Revenue Service would have permitted a "certifying officer" to appeal to binding arbitration the agency's final decision to assess the employee financial liability. Since the Comptroller General is authorized by what is now 31 U.S.C. § 3527(c) to grant relief to certifying officers, the Authority found that allowing employees to arbitrate the issue of relief from liability in lieu of seeking such relief from the Comptroller General conflicted with the exclusive means by which relief can be granted.
The decision in Internal Revenue Service is distinguishable from this case because here there is no attempt to substitute arbitration for the role of the Comptroller General in authorizing relief. The Union concedes that the Comptroller General has sole authority to authorize relief in this case. As we noted, the grievance is concerned only with the Agency head's determination that the grievant was negligent. The Comptroller General's involvement in authorizing relief does not arise until after the agency head has acted and has made the requisite determinations finding the employee not to be negligent or at fault. The Comptroller General has recognized that his role is contingent on the action taken by an agency. In 59 Comp. Gen. 113 (1979), the Comptroller General stated that since his "sole authority, with respect to relief of accountable officers of other agencies, is limited to giving or withholding concurrence with the agency's determinations [he] has no role to play when the agency has either not made the requisite statutory determinations or has made a determination adverse to the officer." Id. at 114. Even assuming, as the Agency argues, that 31 U.S.C. § 3527(a) establishes the exclusive procedure by which relief can be authorized, a grievance which merely challenges an agency head decision and which is not an attempt to substitute arbitration for a Comptroller General determination on relief, does not conflict with the statutory scheme set forth in 31 U.S.C. § 3527(a).
The Agency also argued that matters that are outside the duty to bargain are necessarily outside the scope of a negotiated grievance procedure. In support of this argument, the Agency relied on decisions of the Authority concerning the scope of the bargaining obligation on issues of employee indebtedness and pecuniary liability and on the court decisions in Military Sealift Command and Bureau of Engraving and Printing which addressed the negotiability of pay and pay practices.
The Arbitrator correctly found that those decisions related to the scope of bargaining and were not dispositive of the issue concerning arbitrability of the grievance. A matter which is outside the duty to bargain is not necessarily outside the scope of a negotiated grievance procedure. As we noted previously, the definition of grievance in section 7103(a)(9) is expansive and may include a claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment. We have already determined that the grievance did not concern a matter that is excluded from the definition of conditions of employment. Rather, the grievance concerned the application of the Agency's authority to make determinations of employee negligence under 31 U.S.C. § 3527(a). As such, the grievance concerned a matter that was appropriately within the definition of section 7103(a)(9). The Agency's argument that the grievance is outside the scope of the negotiated grievance procedure, therefore, must be rejected.
We find equally unpersuasive the Agency's argument that other remedies are available, as set forth in the Internal Revenue Code, which preclude arbitrability of the grievance. We agree with the Union that the sections of the Internal Revenue Code relied on by the Agency do not apply here since the grievant repaid the amount of the loss and there is no dispute regarding the accountability of lost funds. Moreover, the Agency's argument that the Internal Revenue Code establishes an exclusive procedure that is available for Agency employees is inconsistent with its arguments regarding the applicability of 31 U.S.C. § 3527(a). While the Agency argued that 31 U.S.C. § 3527(a) establishes an exclusive procedure for seeking relief in accountable officer cases, the Agency also claims that the Internal Revenue Code contains an exclusive procedure for challenging the grievant's assessment of a liability.
Notwithstanding this apparent inconsistency, the Agency's argument presents no basis for finding the award deficient since the provisions of the Internal Revenue Code relied on do not apply here.
The Agency's exceptions are denied.
1/ 31 U.S.C. § 3527(a) provides, in relevant part, as follows:
§ 3527. General authority to relieve accountable officials and agents from liability
(a) [T]he Comptroller General may relieve a present or former accountable official or agent of an agency responsible for the physical loss or deficiency of public money . . . or may authorize reimbursement from an appropriation or fund available for the activity in which the loss or deficiency occurred for the amount of the loss or deficiency paid by the official or agent as restitution, when--
(1) the head of the agency decides that--
(A) the official or agent was carrying out official duties when the loss or deficiency occurred, or the loss or deficiency occurred because of an act or failure to act by a subordinate of the official or agent; and
(B) the loss or deficiency was not the result of fault or negligence by the official or agent;
(2) the loss or deficiency was not the result of an illegal or incorrect payment; and
(3) the Comptroller General agrees with the decision of the head of the agency.
2/ 26 U.S.C. § 7803(c) provides as follows:
(c) Delinquent internal revenue officers and employees
If any officer or employee of the Treasury Department acting in connection with the internal revenue laws fails to account for and pay over any amount of money or property collected or received by him in connection with the internal revenue laws, the Secretary shall issue notice and demand to such officer or employee for payment of the amount which he failed to account for and pay over, and, upon failure to pay the amount demanded within the time specified in such notice, the amount so demanded shall be deemed imposed upon such officer or employee and assessed upon the date of such notice and demand, and the provisions of chapter 64 and all other provisions of law relating to the collection of assessed taxes shall be applicable in respect of such amount.
(If blank, the decision does not have footnotes.)
1. 5 U.S.C. § 3527(a) is set forth in the Appendix.
2. 26 U.S.C. § 780