36:0555(64)NG - - MMP and Panama Canal Commission - - 1990 FLRAdec NG - - v36 p555



[ v36 p555 ]
36:0555(64)NG
The decision of the Authority follows:


36 FLRA No. 64

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

INTERNATIONAL ORGANIZATION OF

MASTERS, MATES AND PILOTS

(Union)

and

PANAMA CANAL COMMISSION

(Agency)

0-NG-1123

(27 FLRA 958)

DECISION AND ORDER ON REMAND

August 8, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This negotiability case is before the Authority on remand from the United States Court of Appeals for the Fifth Circuit. Panama Canal Commission v. FLRA, 867 F.2d 905 (5th Cir. 1989) (Panama Canal Commission). The court vacated the Authority's decision in International Organization of Masters, Mates and Pilots and Panama Canal Commission, 27 FLRA 958 (1987) (IOMMP). In IOMMP, the Authority (Member Frazier concurring in part and dissenting in part) dismissed the Union's petition for review on the ground that section 7114(c) of the Federal Service Labor-Management Relations Statute (the Statute) did not authorize the Agency head to review provisions that were directed to be included in the parties' agreement as a result of an interest arbitration award. The court vacated the Authority's order and remanded the case for consideration of "the issues presented by the order . . . on their merits." Panama Canal Commission, 867 F.2d at 908.

For the following reasons, we find that the parties' collective bargaining agreement, including the provision in dispute in this case, became final and binding when it was not disapproved by the Agency head within the 30-day time limit set forth in section 7114(c)(3) of the Statute. Consequently we will dismiss the Union's petition for review.

II. Background

During collective bargaining, the Union invoked the services of the Federal Service Impasses Panel (Panel) to aid in the resolution of a number of outstanding issues, including a Union proposal concerning incentive pay bonuses for pilots engaged in representational activities on official time. The Panel directed the parties to mediation/arbitration and designated a Member of the Panel to serve as the mediator/arbitrator (hereinafter "arbitrator"). On January 17, 1985, the arbitrator issued a Decision in which he directed the parties to adopt a collective bargaining agreement, including the provision in dispute in this case.

In February 1985, both parties requested clarification of the arbitrator's award. On February 28, 1985, while the parties' requests for clarification were pending before the arbitrator, the Panama Canal Commission submitted the collective bargaining agreement to the Secretary of Defense Representative for Panama Canal Affairs for Agency head approval under section 7114(c) of the Statute. On March 15, 1985, in response to the parties' request for clarification, the arbitrator reiterated his earlier award. On March 24, 1985, the Secretary of Defense Representative for Panama Canal Affairs disapproved the portion of the provision in dispute here. On April 3, 1985, the Union filed exceptions with the Authority to the January 17, 1985, arbitrator's decision and on April 8, 1985, the Union filed the negotiability petition in this case.

In Panama Canal Commission and International Organization of Masters, Mates and Pilots, Marine Division, ILA, AFL-CIO, 22 FLRA 605 (1986) (IOMMP Marine Division), the Authority dismissed the Union's exceptions to the arbitrator's decision as untimely filed. The Authority found that the arbitrator's clarification did not modify his January 17, 1985, award but, rather, "essentially reiterated his earlier award." Id. at 606. Therefore, the Authority concluded that the operative date of the award, for the purpose of determining the timeliness of exceptions, was January 17, 1985.

Subsequently, in IOMMP, the Authority dismissed the Union's negotiability appeal. Consistent with previous decisions, the Authority concluded that it had no jurisdiction to consider the Union's negotiability appeal because section 7114(c) of the Statute does not authorize agency heads to review provisions that are directed to be included in an agreement by a decision of a Panel Member acting as an interest arbitrator. The Authority found that the appropriate mechanism for challenging the propriety of such decisions is through the procedures set forth in section 7122 of the Statute (relating to the filing of exceptions to arbitration awards). Accordingly, the Authority dismissed the Union's petition for review.

In Panama Canal Commission, the court vacated the Authority's decision in IOMMP. The court found that when parties reach impasse during negotiations, an agency may either (1) refer the impasse to the Panel pursuant to section 7119(b)(1) of the Statute; or (2) in conjunction with the union, seek jointly "to adopt a procedure for binding arbitration" pursuant to section 7119(b)(2). Panama Canal Commission, 867 F.2d at 908. The court found further that if both parties agree to binding arbitration under section 7119(b)(2) "then the resulting arbitration award is reviewable by the [Authority] under section 7122 but is not subject to agency head review." Id. The court concluded, however, that if an agency refers an impasse to the Panel pursuant to section 7119(b)(1), the agency head does not "waive his right to review, even if the Panel imposes binding contract terms under section 7119(c)(5)(B)(iii)." Id. According to the court, "the agency head does not forfeit the right to judicial review of a decision of the [Authority] rejecting the agency head's disapproval of an agreement under section 7114(c)." Id. The court vacated the Authority's order in IOMMP and remanded the case to the Authority for consideration of "the issues presented by the order . . . on their merits." Id.

We adopt, as the law of the case, the court's decision in Panama Canal Commission. We will, therefore, consider the issues presented in the negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Statute.

III. The Provision

Only the underlined portion of the following provision is in dispute:

There will be a total of three thousand (3,000) hours of official time per contract year available for use by Organization representatives. Official time not utilized in a given contract year may not be carried forward to the next contract year. In order that two (2) Organization representatives, who are employees of the Panama Canal Commission, may schedule representational activities in a manner that meets the needs of the parties, the Commission agrees to grant sixteen (16) hours of official time per week to each representative (which shall be deducted from the aforesaid three thousand [3,000] hours) and shall credit each representative with three (3) assignments per pay period for the purpose of PILOT ADDITIONAL COMPENSATION (Appendix B).

IV. Preliminary Matter

Section 7117(c)(3) of the Statute provides that an agency's response to a petition for review must be filed within 30 days after receipt of the petition. In its statement of position, dated May 14, 1985, the Agency representative asserts that the Union's petition was received on April 18, 1985. The Union asserts that its return receipt shows that the Agency representative received the petition on April 16, 1985. The Union states that "whether or not the Agency Response was untimely is a question which should be addressed by the Authority." Reply Brief at 2.

The parties' assertions as to the date on which the Union's petition was received by the Agency are in conflict. If the Union's assertion is correct, the Agency's response was filed 1 day late. If the Agency's assertion is correct, the response was timely filed. In these circumstances, the postal return receipt constitutes the only definitive evidence of receipt. The Union raised the issue of the timeliness of the Agency's response based on its postal receipt, but did not attach a copy of the receipt to its submission. As the Union did not supply the only evidence which would allow resolution of the conflicting assertions, we will consider the Agency's response.

V. Positions of the Parties

A. The Union

The Union notes that the Agency head's disapproval was dated March 24, 1985, "sixty-six (66) days after the date of the January 17" arbitrator's decision. Reply Brief at 4. The Union also notes that the Agency took the position in IOMMP, Marine Division that the Union's exceptions were untimely filed because "the January 17 Arbitrator's Opinion and Award, and not his subsequent . . . clarification, imposed the contract[.]" Id. at 5. The Union asserts that "the Agency cannot have it both ways." Id.

As to the merits of the provision in dispute, the Union contends that the "wages of employees of the Agency, at least for those in the situation of Canal Pilots, are subject to negotiation." Id. at 9. The Union characterizes the arbitrator's decision as holding that "the method of determining bonuses [for Pilots] is completely different than the determination of compensation of Civil Service Employees." Id. at 7.

The Union rejects the Agency's contention that the provision interferes with the Agency's right to assign work and direct employees. The Union concludes that, consistent with the arbitrator's clarification of his original award, "the intent of the provision is not to interfere [with] the Agency's right to make assignments or to grant a 'bonus' to organizational representatives." Id. at 8. Instead, "it is designed to insure that the representatives of the Exclusive Representatives 'not fall behind their peers in compensation.'" Id.

B. The Agency

The Agency claims that the disputed portion of the provision is nonnegotiable because it "deals directly with pay matters[.]" Statement of Position at 2. The Agency contends that "Congress did not intend to include the subject of pay or money-related fringe benefits in the ambit of 'conditions of employment' that were negotiable." Id. at 7. The Agency also asserts that because the Pilot Additional Compensation system referred to in the provision "is an incentive bonus system," the provision infringes on its rights to assign work and direct employees. Id. at 2. In support, the Agency relies on National Treasury Employees Union and Internal Revenue Service, 14 FLRA 463 (1984), vacated and remanded sub nom. National Treasury Employees Union v. FLRA, 793 F.2d 371 (D.C. Cir. 1986) (NTEU v. FLRA).

VI. Analysis and Conclusions

Under section 7114(c)(3) of the Statute, a collective bargaining agreement which has not been approved or disapproved by the head of the agency within 30 days after its execution becomes effective and binding on the parties on the 31st day, subject to the requirements of the Statute and any other applicable law, rule, or regulation. An agency head's disapproval of a negotiated agreement under section 7114(c)(3) of the Statute must be in writing and must be served on the union, by certified mail or by personal delivery to the union's designated representative, within 30 days from the date the agreement is executed. See, for example, American Federation of Government Employees, Local 2182, AFL-CIO and Propulsion Laboratory, U.S. Army Research and Technology Laboratories, 26 FLRA 600, 601 (1987).

Absent timely service of a written disapproval, a collective bargaining agreement becomes effective on the 31st day following its execution and is binding on the parties thereafter, subject to the provisions of the Statute and any other applicable law, rule, or regulation. Antilles Consolidated Education Association and Department of Defense, Department of the Navy, Antilles Consolidated School System (ACSS), 28 FLRA 118 (1987) (Antilles Consolidated School System). The date a collective bargaining agreement is executed, for purposes of section 7114(c) review, is normally the date the local parties sign the written agreement. See, for example, Bremerton Metal Trades Council and Naval Supply Center Puget Sound, 32 FLRA 643, 644 (1988).

As noted above, the Authority previously held that agency heads were not authorized under section 7114(c) of the Statute to review provisions imposed by an interest arbitrator. Consistent with those decisions, the Authority did not address whether it was necessary for the parties to "execute" the agreement so as to trigger the statutory time limit applicable to agency head review. For the following reasons, we now conclude that, in this case, the date on which the arbitrator's decision was served on the parties constituted the date on which the agreement was executed, within the meaning of section 7114(c).

Section 7114(b)(5) of the Statute provides that the obligation to bargain in good faith includes the obligation "to execute on the request of any party to the negotiation a written document embodying the agreed terms, and to take such steps as are necessary to implement such agreement." See also Internal Revenue Service, Philadelphia District Office, 22 FLRA 245, 255 (1986). The execution of the agreement, in turn, triggers a step necessary to implement the agreement: agency head review under section 7114(c). In situations where the parties have reached agreement bilaterally, the purpose of section 7114(b)(5) appears clear. Execution of a written agreement is necessary to ensure that, in fact, there is a "meeting of the minds" on the terms of the agreement. Until such time as the parties have signed a written document embodying their understandings, there is no agreement to review under section 7114(c) or to otherwise implement.

In the case now before us, however, the arbitrator's decision encompassed the parties' entire agreement. That is, the decision included provisions which had been agreed on bilaterally, those on which agreement was reached during mediation with the arbitrator, and those which the arbitrator decided. In fact, the arbitrator noted that "[I]t was agreed by counsel for the [Agency and the Union] that [the arbitrator] would direct the adoption of the full contract." Arbitrator's Opinion and Decision at 4, Case No. 84 FSIP 73, published in Federal Service Impasses Panel Release No. 233 (February 5, 1985). Consistent with the parties' agreement, the arbitrator "directed" the parties "to place in effect the collective bargaining contract attached [to the decision] as Appendix A[.]" Id. at 26. Appendix A included all articles of the parties' agreement.

Further, the parties themselves took the position that, in view of the nature of the arbitrator's decision, execution of the collective bargaining agreement was not necessary. The Union asserted to the Agency that:

[N]o execution is required. The terms of the "contract" are not the result of negotiation and mutual agreement. They are being imposed upon us by statutory authority.

Attachment 1 to Agency's Statement of Position at 2. The Agency agreed with the Union's position and, in the letter transmitting the agreement to the Agency head for review, stated:

Attached is a copy of the . . . letter from [the Union's representative] which states, in essence, that in the opinion of the [Union] the terms of Mr. Howlett's order were in fact imposed by statutory authority. Certainly, we consider the Commission to be bound by Mr. Howlett's decision and [the Union representative's] letter conveys this sense also. This, we believe, is equivalent to the execution of the agreement.

Id. at 1.

Finally, consistent with the parties' statements concerning execution of the agreement, there is no basis in the record before us on which to conclude that the parties agreed that further action was necessary to finalize their agreement. There is no indication, for example, that the parties intended to alter, by agreement, any of the provisions imposed by the arbitrator. In addition, the Agency did not await the arbitrator's response to the clarification requests to begin the review process under section 7114(c) and the Union did not assert that the Agency should await clarification before beginning that process. In fact, the agreement was forwarded to the Agency for review on February 28, 1985, while the clarification requests were pending before the arbitrator.

In this situation, we find no basis on which to conclude that the parties were required to "execute" their agreement so as to trigger, as relevant here, the time limit applicable to review by the Agency head. We emphasize, in this regard, the unique circumstances involved in this case: pursuant to the parties' request, the arbitrator's decision encompassed their entire agreement; the parties did not jointly agree to stay implementation of the arbitrator's decision; and in fact, neither party viewed the pendency of their requests for clarification of the arbitrator's decision as affecting the finality of the decision for purposes of Agency head review. In these circumstances, we conclude that a requirement that the parties act so as to "execute" this agreement would constitute a meaningless formality.

Thus, we hold that the date on which the arbitrator's decision imposing the parties' collective bargaining agreement was served on the parties, constitutes the date that the collective bargaining agreement was "executed" for purposes of review by the Agency head under section 7114(c) of the Statute. The arbitrator's award was served ("issued") on the parties on January 17, 1985. Arbitrator's Opinion and Award at 27.

The Secretary of Defense Representative for Panama Canal Affairs disapproved the portion of the provision in dispute here on March 24, 1985. Although the March 24, 1985, disapproval occurred 24 days after February 28, 1985, the date the agreement was forwarded to the Agency for review, February 28, 1985, is more than 30 days after the agreement was served on the parties on January 17, 1985. The record does not indicate in what manner the notice of disapproval was served on the Union. That issue is irrelevant, however, as the date of the Agency's disapproval is well more than 30 days after the date the agreement was executed.

As the Agency head's disapproval of the disputed provision was not timely served on the Union, the parties' agreement went into effect, pursuant to section 7114(c)(3), on the 31st day after January 17, 1985, and was binding on the parties thereafter, subject to the provisions of the Statute and any other applicable law, rule, or regulation. See Antilles Consolidated School System. Under these circumstances, the Agency head's disapproval raises no dispute concerning the terms of the agreement which the Authority can consider under section 7117 of the Statute and we will dismiss the Union's petition for review.

We find no inconsistency between our action here and the court's decision in Panama Canal Commission to vacate the Authority's order in IOMMP and remand for consideration of "the issues presented by the order . . . on their merits." 867 F.2d at 908. Section 7114(c)(3) of the Statute provides clearly that if an agency does not timely disapprove a collective bargaining agreement, the agreement "shall take effect and shall be binding on the agency and the exclusive representative[.]" Consistent with section 7114(c), therefore, timely disapproval constitutes a statutory condition precedent to our jurisdiction under section 7117 of the Statute.

Further, the Union raised the issue of the timeliness of the Agency head's review in these proceedings. The Agency is, and has been, aware, therefore, that this issue is before the Authority. We recognize, in this regard, that the Union raised the issue in its Reply Brief. However, at no time has the Agency addressed, or sought leave to address, the issue. See United States Office of Personnel Management v. FLRA, No. 88-1901 (D.C. Cir. June 15, 1990), slip op. at 8 (rejecting certain arguments made to the court because, in part, "petitioner never sought leave to file additional materials or to amend their briefs before the Authority[]" to present those arguments).

The conclusion that there is no basis to consider the Agency's disapproval of the agreement in the present proceeding does not, of course, mean that any provisions in the agreement which are contrary to the Statute or any other applicable law, rule, or regulation, are thereby enforceable. Rather, consistent with section 7114(c) of the Statute, the result of the untimely disapproval is that the parties' agreement became effective "subject to the provisions of [the Statute] and any other applicable law, rule, or regulation." Accordingly, questions as to the consistency of provisions of the agreement with law, rule, or regulation may be raised in other appropriate proceedings. See, for example, Antilles Consolidated School System, 28 FLRA at 121.

As the Agency head did not timely disapprove the parties' agreement, there is no negotiability dispute properly before us in this case.

We recognize that, where a negotiability dispute is not properly before us because an agency head did not timely disapprove a collective bargaining agreement, it is unnecessary for us to decide whether the disputed provision is consistent with law, rule, and regulation. However, significant time has passed since the dispute arose and, during that time, numerous Authority and court decisions have been decided which are dispositive of the issues raised in this case. Consequently, in these circumstances we will address the merits of the provision in dispute.

As set out earlier in this decision, the portion of the provision in dispute provides that Panama Canal Pilots who are acting as representatives of the Union in an official time status pursuant to the parties' collective bargaining agreement will be given credit toward earning an incentive pay bonus for which they might become eligible were they not engaged in representational activities. The Agency claims that this portion of the provision concerns pay matters and thus, is nonnegotiable because "Congress did not intend to include the subject of pay or money-related fringe benefits in the ambit of 'conditions of employment' that were negotiable." Statement of Position at 7. The Agency also asserts that because the Pilot Additional Compensation system referred to in the provision "is an incentive bonus system," the provision infringes on its rights to assign and direct employees under section 7106(a)(2)(A) and (B) of the Statute. Id. at 2.

For the reasons that follow, we reject the Agency's claims. First, we conclude that the portion of the provision in dispute concerns conditions of employment of bargaining unit employees within the meaning of section 7103(a)(14) of the Statute. We note that in its decision in Fort Stewart Schools v. FLRA, 58 U.S.L.W. 4624 (U.S. May 29, 1990) (Fort Stewart), affirming 860 F.2d 396 (11th Cir. 1988), the Supreme Court concluded that proposals involving the wages and fringe benefits of Federal employees who are not covered by the General Schedule (GS) pursuant to 5 U.S.C. § 5332 concern the conditions of employment of those employees. The Court upheld the Authority's determination that the three proposals in Fort Stewart, involving mileage reimbursement, leave, and salary increases, concerned "conditions of employment," within the meaning of section 7103 of the Statute.

In reaching its conclusion, the Court rejected the argument, also advanced by the Agency, that Congress did not intend the duty to bargain under the Statute to extend to proposals relating to wages and money-related fringe benefits. The Court found that statements in the legislative history of the Statute indicating that wage and fringe benefits would not be subject to bargaining "may reflect nothing more than the speakers' incomplete understanding of the world upon which the [S]tatute will operate." Fort Stewart, 58 U.S.L.W. at 4626. Consistent with the Court's decision, we reject the Agency's argument noted above that the portion of the provision in dispute is not a negotiable condition of employment because it concerns pay and money-related fringe benefits.

Second, we find that the portion of the provision in dispute does not interfere with the Agency's rights to direct employees and to assign work under section 7106(a)(2)(A) and (B) of the Statute and that the Agency's reliance on the Authority's decision in Internal Revenue Service to support its argument is misplaced. Subsequent to the Authority's decision in Internal Revenue Service, the United States Court of Appeals for the District of Columbia Circuit, in National Treasury Employees Union v. FLRA, 793 F.2d 371 (D.C. Cir. 1986), reviewed the question of whether a proposal which would establish levels of incentive payments interfered with management's right to assign work and direct employees, and reversed the Authority's decision in Internal Revenue Service. The court held that "the level of incentive pay awarded for the performance of agency work, even work that has been 'assigned' or 'directed,' [did] not come within the nonbargainable management rights to assign work and direct employees." 793 F.2d at 375. In so holding, the court further examined the scope of the right to direct employees and assign work, stating:

[W]hile the assignment of work includes, as we have said earlier, designation of the category of duties an employee is to perform, it also includes (if the agency chooses to be so specific) designation of the precise quantity and quality of those duties--which is unquestionably achieved by performance standards that must be met to avoid disciplinary action. Id.

The Authority adopted the court's position in National Treasury Employees Union and Internal Revenue Service, 27 FLRA 132, 135 (1987) (IRS): "[A] proposal . . . determining the level of incentive award for the performance of [a]gency work does not constitute an exercise of management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute." Likewise, the Authority adopted the court's holding in American Federation of Government Employees, AFL-CIO, Local 3477 and Commodity Futures Trading Commission, 27 FLRA 440 (1987) (Commodity Futures Trading Commission) at 442. There, the proposal sought to determine the level of incentive pay for above-normal performance of assigned work.

The portion of the provision in dispute seeks to establish that Pilots who are acting as representatives of the Union in an official time status pursuant to the parties' collective bargaining agreement will be given credit toward earning an incentive pay bonus for which they might become eligible were they not engaged in representational activities. That portion of the provision does not prescribe the type of work unit employees will perform nor does it establish the performance level necessary to avoid disciplinary action. Accordingly, based on National Treasury Employees Union v. FLRA, and the Authority's decisions in IRS and Commodity Futures Trading Commission, the portion of the provision in dispute in this case also does not interfere with management's rights to direct employees and to assign work under section 7106(a)(2)(A) and (B) of the Statute.

In summary, we conclude that because the Agency head's disapproval of the parties' collective bargaining agreement was not timely served on the Union u