36:0453(56)AR - - Treasury, IRS, Omaha, Nabraska District and NTEU - - 1990 FLRAdec AR - - v36 p453



[ v36 p453 ]
36:0453(56)AR
The decision of the Authority follows:


36 FLRA No. 56

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

OMAHA, NEBRASKA DISTRICT

(Agency)

and

NATIONAL TREASURY EMPLOYEES UNION

(Union)

0-AR-1738

DECISION

July 26, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on exceptions to the award of Arbitrator David A. Dilts filed by the Agency 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 Union filed an opposition to the Agency's exceptions.

The grievance alleged that the Agency failed to properly consider the grievant for one of several Revenue Officer positions in the Omaha District of the Internal Revenue Service. The Arbitrator found that the Agency failed to compare the grievant with candidates for the positions from outside the Agency and that the Agency did not use the same methods to evaluate the grievant and the candidates from outside the Agency. The Arbitrator ruled that the procedures used to evaluate the grievant violated the parties' collective bargaining agreement and the Agency's Policy Statement P-O-4. As a remedy, the Arbitrator ordered that the grievant be given priority consideration for the next available Revenue Officer position in the Omaha District.

We conclude that the Agency has failed to establish that the award is deficient on any of the grounds set forth in section 7122 of the Statute. Accordingly, we will deny the exceptions.

II. Background

The grievant was a GS-7 Revenue Representative/Tax Examiner Assistant in the Collection Division of the Omaha District. On July 31, 1987, the Agency announced seven new Revenue Officer positions in the Omaha District with a promotion series beginning at GS-5 and ending at GS-12. The grievant applied for and was certified as meeting the basic eligibility requirements for a GS-7 Revenue Officer position. The grievant ultimately was rated "the most highly qualified of the two internal candidates and was therefore placed on the 'best qualified list.'" Award at 3.

Subsequently, in an interview with Agency officials, the grievant was asked several "pre-prepared questions" which were "selected and/or composed inhouse." Id. The questions asked of the grievant in the interview were not the same as the questions asked of external candidates which were "imposed" by the Office of Personnel Management (OPM). Id. "The grievant was not selected for the Revenue Officer position, based primarily on the answers she gave during the interview." Id.

The Union filed a grievance alleging that the Agency failed to properly consider the grievant for the position of Revenue Officer in violation of the "Promotion" article of the parties' collective bargaining agreement and Internal Revenue Service Manual Policy Statement P-0-4. The grievance was submitted to arbitration.

III. Arbitrator's Award

As a preliminary matter, the Arbitrator examined the parties' arguments concerning the applicability of Policy Statement P-0-4. The Arbitrator stated that the Agency must fill positions or make selections from properly ranked and certified promotion candidates or the Agency may select from any appropriate source. The Arbitrator found that the Agency's right to fill positions and make selections is subject to limitations. The Arbitrator stated that "[t]he limitations placed on management are . . . not limitations deriving from its collective bargaining relations with [the Union], but derive from law and from its own, self-imposed regulations." Award at 24.

The Arbitrator described Policy Statement P-0-4 "as having the weight of a regulation" within the meaning of the parties' agreement and as providing "a definition of 'appropriate source.'" Id. The Arbitrator found that the policy statement provides that "[t]o be an appropriate source[,] outside candidates must be, in the opinion of the selecting official, better qualified than internal candidates certified[,] qualified and ranked." Id. at 28. According to the Arbitrator, "Policy Statement P-0-4 clearly shows that the Agency intends to select internal candidates when they are at least as qualified as external applicants." Award at 24. The Arbitrator found that "[a]lleged violations of Policy Statement P-0-4 are therefore grievable and arbitrable as necessary to the proper interpretation and application of the language of Articles 3 and 13 [of the parties' agreement]." Id. at 25.

The Arbitrator also found that Article 3 of the agreement "clearly contemplates the inclusion of external language and definitions" and that "Policy Statement P-0-4 is of little significance read out of the context of the parties' [a]greement." Id. The Arbitrator stated that "Policy Statement P-0-4 becomes clothed with contractual authority only because the contract itself convinces this Arbitrator that such was contemplated by the parties in agreeing to the express provisions of this [a]greement." Id. at 25-26.

According to the Arbitrator, the merits of the case could only be resolved by determining: (1) whether the grievant was qualified for the position of Revenue Officer, and (2) whether the grievant was improperly considered and, therefore, improperly bypassed for selection. The Arbitrator stated that "[t]his record of evidence does not clearly demonstrate . . . that the grievant is as qualified as any of the external candidates. In fact, this record of evidence also fails to convince this Arbitrator that the grievant was less qualified. What the record clearly demonstrates is that different evaluation methods were applied to the external and internal candidates." Id. at 28. The Arbitrator held that it would be improper for the Arbitrator to attempt to determine the relative qualifications of the internal and external candidates using the different methods of evaluation. The Arbitrator found that "[w]ithout a basis for comparison, a common denominator, the Arbitrator cannot find the grievant more or less qualified than external candidates." Id. at 29.

As to whether the grievant was properly considered for the Revenue Officer vacancy, the Arbitrator stated that "[t]he clear fact in all of this is that, by several events, the Agency has provided itself with a procedural fault." Id. at 33. According to the Arbitrator, the "procedural fault" resulted because the Agency did not compare the grievant's qualifications with those of the external candidates and because the Agency used evaluation methods in selecting outside applicants which were different from those used to evaluate the grievant. The Arbitrator stated "it is clear that consideration [of the grievant] is tainted." Id. at 34.

The Arbitrator found that "Policy Statement P-0-4 provides meaning to 'other appropriate sources' in Article 3, Section 1(A)4(b) which, in turn breathes life into Article 13 procedures." Id. The Arbitrator found that the consideration given the grievant was not in accordance with the policy statement and the collective bargaining agreement and, therefore, was tainted. "The tainted consideration process has, in fact, created the potential for harm, in that there is no certainty that the Agency would have reached the same conclusion with respect to outside candidates had the same evaluation methods been imposed or comparisons of qualification[s] been made." Id. at 34-35.

The Arbitrator held that:

[T]he grievant is entitled to consideration as contemplated by the parties' collective bargaining agreement. The collective bargaining agreement incorporates and recognizes several concepts to be found in the [Internal Revenue Manual]. The technical violation of Policy Statement P-0-4, together with the fact that differing evaluation methods . . . were utilized is sufficient to convince this Arbitrator that the grievant was not given the consideration required of the Agency in Article 13 and elsewhere.

Id. at 35.

The Arbitrator sustained the grievance and ordered that the grievant be given priority consideration for the next available Revenue Officer position in the Omaha District.

IV. Positions of the Parties

A. Agency's Exceptions

The Agency contends that the Arbitrator's determination that the parties' collective bargaining agreement restricts management's right to select external candidates is based on a nonfact. The Agency disputes the Arbitrator's finding that Policy Statement P-0-4 gives meaning to Article 3 of the parties' agreement and, therefore, is necessary to the interpretation of the agreement. The Agency maintains that the absence in the parties' agreement of procedures for determining the relative qualifications of internal applicants and external candidates indicates that the parties never intended to restrict the Agency's right to select external candidates. Agency's Exceptions to Arbitrator's Award (Exceptions) at 14-15. The Agency argues that if the Arbitrator had not made an erroneous finding that Policy Statement P-0-4 defined "appropriate source" in the parties' agreement, "he could not reasonably have found that the [a]greement limits management's right to select externally to those who are more qualified than internal applicants." Id. at 15. The Agency states that "[a]s the central fact underlying the Arbitrator's [a]ward is without a doubt in error and a gross mistake of fact but for which the Arbitrator would have reached a different result, his [a]ward is deficient, and it must be set aside." Id.

The Agency contends that the Arbitrator erred in concluding that the policy statement is necessary to the interpretation of the parties' agreement. The Agency states that the parties expressly excluded from the grievance procedure provisions of the Internal Revenue Manual that are inconsistent with the parties' agreement. The Agency argues that Policy Statement P-0-4--which is included in the Internal Revenue Manual--directly conflicts with the agreement and, therefore, the agreement must control. The Agency asserts that, contrary to the Arbitrator's finding, "the [a]greement does not incorporate the Policy Statement by reference to the term, 'appropriate source.'" Id. at 17.

The Agency also contends that the Arbitrator's finding that Policy Statement P-0-4 is subject to the grievance procedure is deficient because it is inconsistent with Government-wide rules and regulations. The Agency asserts that Federal Personnel Manual (FPM) chapter 335, subchapters 1-4 and 1-6 prohibit grievances over nonselection from a list of properly ranked best qualified candidates. The Agency asserts that the Arbitrator's award permits the type of grievance which is prohibited by the FPM.

The Agency contends that the Arbitrator exceeded his authority by imposing a restriction on the exercise of the Agency's rights which is not found in the parties' collective bargaining agreement. The Agency states that Article 43 of the parties' agreement expressly provides that an arbitrator may not impose on either the Agency or the Union any limitation or obligation not specifically provided for under the terms of the agreement. The Agency argues that the restrictions on management's rights imposed by the Arbitrator cannot be found on the face of the parties' agreement. The Agency claims that the Arbitrator exceeded his authority by providing a remedy for a violation of the policy statement. The Agency also contends that because the Arbitrator imposed restrictions on management's rights that cannot be found on the face of the parties' agreement, the award fails to draw its essence from the agreement.

The Agency further contends that the arbitration award is deficient because it interferes with management's right to fill vacancies under section 7106(a) of the Statute. The Agency argues that "the restriction on management's right to select external candidates constitutes a prohibited direct and substantive impediment on management's statutory right to select employees from any appropriate source." Exceptions at 28.

Finally, the Agency contends that the Arbitrator's finding that the Agency has the burden of proving that the selected candidates were more qualified than the grievant is contrary to law.

B. Union's Opposition

The Union contends that the Arbitrator's award is well reasoned and draws its essence from the parties' collective bargaining agreement. The Union states that "it is abundantly clear from the award that the Arbitrator reached his conclusion concerning the grievability and arbitrability of [Policy Statement] P-0-4 by interpreting and applying the relevant provisions of the parties' collective bargaining agreement[.]" Union's Opposition to Agency's Exceptions (Opposition) at 8. The Union asserts that the Agency's exceptions concerning the Arbitrator's application of the Policy Statement constitute "disagreement with the Arbitrator's interpretation of the terms of the [a]greement [and] completely fail to show with any degree of certainty that the award is implausible, unfounded in reason or fact, not rationally derived from the agreement or in manifest disregard of the agreement." Id. at 9.

The Union states that the Agency's contention that the award is based on a nonfact is an attempt by the Agency to relitigate the grievance. The Union argues that the exception is a restatement by the Agency of its disagreement with the Arbitrator's finding that Policy Statement P-0-4 provided a definition for the term "appropriate source" in the parties' agreement. The Union asserts that the Agency has failed to prove any of the elements necessary for showing that an arbitration award is based on nonfact.

The Union also contends that the Arbitrator's award is consistent with law, rule, and regulation. The Union asserts that the Arbitrator's award clearly states that Policy Statement P-0-4 "does not give a substantive right, but is procedural in nature." Id. at 19 (emphasis in original). The Union maintains that the Arbitrator, by applying the procedure in the policy statement, did not substitute his judgment for that of the Agency and, therefore, the award does not interfere with the Agency's substantive rights. The Union maintains that the remedy of priority consideration is appropriate because the Agency's own regulation "prescribes priority consideration as the appropriate form of relief for selections which involve procedural violations." Id.

The Union contends that the Arbitrator's assignment of burdens of proof is consistent with law. The Union argues that the Agency's exception to the Arbitrator's assignment of the burden of proof constitutes mere disagreement with the Arbitrator's findings of fact, reasoning, and conclusions on the evidence before him. The Union contends that the Agency's exception does not provide a basis for finding the award deficient.

V. Analysis and Conclusions

A. The Arbitrator's Award Is Not Based on a Nonfact

When a party contends that an arbitrator's award is deficient under the Statute because it is based on a nonfact, the party must demonstrate that the central fact underlying the award is clearly erroneous, but for which a different result would have been reached. American Federation of Government Employees, Local 1568 and U.S. Department of Housing and Urban Development, 34 FLRA 630 (1990).

The Arbitrator found that "Policy Statement P-0-4 provides meaning to 'other appropriate sources' in Article 3, Section 1(A)4(b) which in turn breathes life into Article 13 [promotion] procedures." Award at 34. The Arbitrator stated that "Policy Statement P-0-4 becomes clothed with contractual authority only because the contract itself convinces this Arbitrator that such was contemplated by the parties in agreeing to the express provisions of this [a]greement." Id. at 25-26. The Agency asserts that the Arbitrator's findings and conclusions as to the meaning of Articles 3 and 13 of the parties' collective bargaining agreement are erroneous. The Agency contends, therefore, that the award is based on a nonfact.

The Agency's disagreement with the Arbitrator's findings concerning the meaning of the agreement does not establish that the Arbitrator's findings and conclusions are incorrect and that the central fact underlying the Arbitrator's award is clearly erroneous, but for which a different result would have been reached. In our view, the Agency's exception does not establish that the award is based on nonfact. The arbitrator's "interpretation" of the collective bargaining agreement is not a "fact" that can be challenged as a "nonfact." Rather, the exception constitutes mere disagreement with the Arbitrator's findings and conclusions and the Arbitrator's interpretation of Articles 3 and 13 of the collective bargaining agreement. Disagreement with an arbitrator's interpretation of a collective bargaining agreement provides no ground for finding an arbitration award to be deficient. See, for example, American Federation of Government Employees, Local 916, AFL-CIO and Oklahoma Air Logistics Center, Tinker Air Force Base, Oklahoma, 34 FLRA 587 (1990).

B. The Award Is Not Inconsistent With FPM, Chapter 335, Subchapters 1-4 and 1-6

The Arbitrator's award is not deficient on the basis that it is inconsistent with chapter 335, subchapters 1-4 and 1-6 of the FPM. The Agency has not shown that the Arbitrator's award is inconsistent with the provisions of the FPM because it allows grievances over the nonselection of an employee to fill a position. To the contrary, unless the parties agree otherwise, grievances may be filed by employees who allege that they were not selected for positions as the result of agency violations of applicable merit promotion procedures. See, for example, Internal Revenue Service, Des Moines, Iowa District and National Treasury Employees Union, Chapter 4, 35 FLRA 144 (1990).

In National Treasury Employees Union and Department of the Treasury and U.S. Customs Service, 31 FLRA 181 (1988), enforced as to other matters sub nom. Department of the Treasury, United States Customs Service v. FLRA, 873 F.2d 1473 (D.C. Cir. 1989), the Authority considered a similar argument to that made by the Agency in this case with respect to FPM chapter 335, subchapter 1-6, and concluded that "OPM regulations cannot limit the statutorily prescribed scope of the negotiated grievance procedure." Id. at 199, citing American Federation of Government Employees, AFL-CIO, Local 2782 and Department of Commerce, Bureau of the Census, Washington, D.C., 6 FLRA 314, 322 (1981) ("OPM regulations . . . may not be applied in a manner inconsistent with the scope of negotiated grievance procedures allowed under section 7121 of the Statute."). See also Office of Personnel Management v. FLRA, 864 F.2d 165 (D.C. Cir. 1988). The Authority has stated that "the Statute and its relevant legislative history required that grievance procedures negotiated under section 7121 cover all matters that under the provisions of law could be submitted to the grievance procedure unless the parties exclude them through bargaining." U.S. Customs Service, 31 FLRA at 200.

The list of matters excluded from the coverage of the negotiated grievance procedures by section 7121(c) of the Statute does not include the nonselection of an employee to fill a position. Therefore, FPM chapter 335, subchapters 1-4 and 1-6 do not bar grievances over the nonselection of an employee to fill a position. See U.S. Department of the Treasury, Internal Revenue Service, Louisville District and National Treasury Employees Union, 36 FLRA No. 46 (1990) (IRS, Louisville District).

C. The Arbitrator Did Not Exceed His Authority

The Agency has failed to show that the Arbitrator has exceeded his authority. Contrary to the Agency's argument, the Arbitrator has not imposed on the parties any restriction not contained in the collective bargaining agreement.

The Arbitrator found that "[t]he limitations placed on management are . . . derive[d] from law and from [the Agency's] own, self-imposed regulations." Award at 24. The Arbitrator found that Policy Statement P-0-4 was a "self-imposed regulation" which the parties clearly intended to incorporate in their collective bargaining agreement. See id. at 24-26. The Arbitrator found that the policy statement "breathes life into" the procedures in the agreement governing promotions. Id. at 34. The Arbitrator also found that "[a]lleged violations of Policy Statement P-0-4 are . . . grievable and arbitrable as necessary to the proper interpretation and application of the language of Articles 3 and 13 [of the parties' agreement]." Id. at 25. The Arbitrator held that the Agency was obligated to follow the procedures of the policy statement because those procedures have been incorporated into the parties' agreement. Therefore, consistent with the Arbitrator's interpretation of the policy statement and the parties' agreement, the obligations imposed on the Agency by the Arbitrator are provided for under the terms of the collective bargaining agreement.

The Agency's contention that the Arbitrator exceeded his authority by imposing a restriction on the Agency which is not found in the parties' collective bargaining agreement constitutes nothing more than disagreement with the Arbitrator's interpretation and application of the parties' agreement. The Agency's contention provides no basis for finding the award deficient. See, for example, Department of the Navy, Norfolk Naval Shipyard and Tidewater Virginia Federal Employees Metal Trades Council, 34 FLRA 626 (1990).

D. The Agency Has Not Established that the Award Fails to Draw Its Essence from the Parties' Agreement

The Agency contends that the award does not draw its essence from the agreement. The Agency states that the agreement limited the Arbitrator's authority to only those matters found in the parties' agreement. The Agency argues that the Arbitrator imposed a restriction not found in the agreement and concludes, therefore, that the Arbitrator's award fails to draw its essence from the agreement. Agency's Exceptions at 20-21.

In order to establish that an award is deficient on the basis that it does not draw its essence from the agreement, the party making the allegation must demonstrate that the award: (1) cannot in any rational way be derived from the agreement; or (2) is so unfounded in reason and fact, and so unconnected with the wording and purpose of the agreement, as to manifest an infidelity to the obligation of the arbitrator; or (3) evidences a manifest disregard for the agreement; or (4) does not represent a plausible interpretation of the agreement. U.S. Department of Veterans Affairs, Medical Center, Leavenworth, Kansas and American Federation of Government Employees, Local 85, 34 FLRA 166 (1990).

The Agency's exception fails to establish that the Arbitrator's award does not draw its essence from the parties' agreement. As we stated above, the Arbitrator held that the Agency was obligated to follow the procedures of the policy statement because those procedures had been incorporated into the parties' agreement. The Arbitrator's award is based on his interpretation of the parties' agreement. The Agency has provided no basis for concluding that the Arbitrator's interpretation can in no rational way be drawn from the parties' agreement, is unfounded in reason and fact and unconnected to the wording of the agreement, evidences a manifest disregard for the agreement, or does not represent a plausible interpretation of the agreement. In our view, the Agency's contention merely constitutes disagreement with the Arbitrator's interpretation and application of the parties' agreement. That contention provides no basis for finding the award deficient under section 7122(a) of the Statute. For example, U.S. Department of the Air Force, Air Force Logistics Command, Hill Air Force Base, Utah and American Federation of Government Employees, Local 1592, 34 FLRA 331 (1990).

E. The Arbitrator's Award Is Not Contrary to Section 7106(a)(2)(C) of the Statute

In IRS, Louisville District, we rejected the Agency's contention that the arbitration award in that case interfered with management's right to make selections. The arbitrator in that case also interpreted Policy Statement P-0-4 as incorporated into the collective bargaining agreement and as requiring the Agency to simultaneously consider bargaining unit employees and nonbargaining unit employees to determine their relative qualifications for vacant positions within the Agency. The Agency contended that the arbitrator's award was contrary to section 7106(a)(2)(C) of the Statute because it placed a substantive limitation on the Agency's ability to select from among outside candidates when filling a position.

We found that by enforcing the procedure for evaluating candidates for vacant positions, the award did not directly interfere with the Agency's rights under section 7106(a)(2)(C) of the Statute. The award did not inhibit the Agency's ability to solicit or consider applications from outside the Agency. Nor did it limit the universe of candidates that section 7106(a)(2)(C) guarantees management the right to consider. IRS, Louisville, District, slip op. at 11. Compare American Federation of Government Employees, Local 3296 and National Guard Bureau, Alaska National Guard, 33 FLRA 99 (1988) (provision which would preclude management from developing additional lists of qualified candidates, expanding the area of consideration, or considering other appropriate sources goes to the substance of management's right to make selections for appointments and is nonnegotiable).

In this case, the Arbitrator found that the procedure established in Policy Statement P-0-4 and incorporated in the parties' agreement required the Agency only to compare the qualifications of unit employees with those of external candidates to determine their relative qualifications for the vacant positions within the Agency. The Arbitrator found that the Agency committed a "procedural fault" when it failed to follow that procedure and because it used different evaluation methods to evaluate unit employees and external candidates. Award at 34. The Arbitrator found that, because of the procedural fault, the consideration given the grievant was not in accordance with the policy statement and the collective bargaining agreement and, therefore, was "tainted." Id. at 34-35.

By enforcing this procedure of comparing the qualifications of unit employees and outside candidates, the award does not directly interfere with the Agency's rights under section 7106(a)(2)(C) of the Statute. The award does not inhibit the Agency's ability to solicit or consider applications from outside the Agency. The award does not limit the universe of candidates that section 7106(a)(2)(C) guarantees management the right to consider. The Agency retains the discretion to determine the qualifications for a position and to determine which candidate is best qualified. Thus, the procedure enforced by the arbitration award leaves substantive decisions concerning selections to the unfettered discretion of the Agency. See IRS, Louisville, District, slip op. at 11-12.

We conclude that like the award in IRS, Louisville District, the award in this case does not prevent the Agency from selecting from any appropriate source to fill vacant positions. Therefore, the award is not deficient as inconsistent with the Agency's rights under section 7106(a)(2)(C) of the Statute.

F. The Award is Not Deficient Because the Arbitrator Assigned the Agency the Burden of Proof

Unless a specific burden of proof is required, an arbitrator may establish and apply whatever burden the arbitrator considers appropriate. Veterans Administration, Leavenworth, Kansas and American Federation of Government Employees, Local 85, 34 FLRA 898, 901-02 (1990). The Agency does not contend that a specific burden of proof was established in the parties' agreement, by agreement between the parties during the arbitration hearing, or by law. In the absence of any evidence that the Arbitrator was obligated to apply a specific burden of proof, the Agency's claim that the Arbitrator incorrectly placed the burden of proof on the Agency provides no basis for finding the award deficient.

VI. Decision

The Agency's exceptions are denied.(*)