36:0743(77)AR - - NLRB, Office of the General Counsel and NLRBU - - 1990 FLRAdec AR - - v36 p743
[ v36 p743 ]
The decision of the Authority follows:
36 FLRA No. 77
FEDERAL LABOR RELATIONS AUTHORITY
NATIONAL LABOR RELATIONS BOARD
OFFICE OF THE GENERAL COUNSEL
NATIONAL LABOR RELATIONS BOARD UNION
August 22, 1990
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on an exception to the award of Arbitrator David Goodman. The issue before the Arbitrator was whether the Agency's denial of the grievants' requests for permission to engage in outside employment was arbitrary and unreasonable. The Arbitrator concluded that the Agency violated the collective bargaining agreement when it denied the grievants' requests, and ordered the Agency to provide each grievant with $600 to compensate for the breach of the agreement.
The Agency filed an exception 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 exception.
For the following reasons, we conclude that the award is contrary to law. Accordingly, we will strike the portion of the award requiring the Agency to provide each grievant with $600.
II. Background and Arbitrator's Award
The grievants are attorneys employed by the Agency in Denver, Colorado. In early 1988, the grievants submitted separate requests to the Agency for permission to engage in outside employment as hearing officers for the Denver Civil Service Commission (DCSC). The Agency denied their requests based upon concerns of conflicts of interest. Because the Agency denied their requests, the grievants were not able to accept appointments as hearing officers. A grievance was filed over the denial of the requests and, when it was not resolved, the grievance was submitted to arbitration.
The parties stipulated the following issue before the Arbitrator:
Was the Agency's denial of Grievants' requests for permission to engage in outside employment arbitrary and unreasonable? If so, what is the appropriate remedy.
Award at 4.
The Arbitrator concluded that "[t]he Agency violated Article 4, Section 6 of the Agreement by acting in an arbitrary and unreasonable manner in refusing Grievants' outside employment requests to serve as hearing officers for DCSC." Id. at 32-33. The Arbitrator also concluded that:
[t]he loss in compensation was caused by and was the direct result of an Agency action in contravention of its commitment reflected in Article 4, Section 6 of the negotiated Agreement. Having breached that Agreement, and having knowledge and notice of the compensation which Grievants could have received had their requests been honored, Grievants are entitled to an appropriate make whole remedy.
Id. at 32.
The Arbitrator stated that the Union's suggestion that "each Grievant would have been assigned three [DCSC] cases is a fair and reasonable approach[,]" and that "[a]ssuming further that each case would have been heard in one day or less, the contracted rate of $35 per hour would have produced at least $600 in income for each Grievant." Id. Therefore, the Arbitrator ordered as a remedy that each grievant receive "$600 in compensation for breach of the Agreement." Id. at 33.
III. Agency's Exception
The Agency argues that the award is deficient because it is contrary to the Back Pay Act, 5 U.S.C. § 5596. The Agency asserts that the compensation awarded is not directly related to the contractual violation and that it, therefore, does not meet the "but for test." Exception at 2 (emphasis in original). According to the Agency, the Arbitrator's award constitutes an award of nominal damages and, as such, is deficient.
IV. Union's Opposition
The Union asserts that the Arbitrator was authorized to issue his award. Opposition at 2. The Union argues that because there was sufficient evidence on the record to estimate the income which the grievants would have earned if the Agency had not violated the parties' agreement, it is "just and proper that the Agency should be required to make whole those individuals that have been subject to its arbitrary and unreasonable acts." Id.
V. Analysis and Conclusion
It is clear that, as asserted by the Union, arbitrators have broad remedial authority. See, for example, American Federation of Government Employees, Local 12 and United States Department of Labor, 32 FLRA 771, 774 (1988). Nevertheless, awards of compensation under the Statute must comply with the requirements of the Back Pay Act or be authorized by some other clear expression of a waiver of sovereign immunity. The Union asserts that, under the Back Pay Act, "an arbitrator may issue an award granting outside earnings, as well as 'inside' earnings." Opposition at 2. The Union provides no support, and research fails to disclose any support, for its assertion, however.
For an award of backpay to be authorized under the Back Pay Act, the arbitrator must determine that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; (2) the personnel action directly resulted in the withdrawal or reduction of the grievant's pay, allowances or differentials; and (3) but for the action, the grievant otherwise would not have suffered the withdrawal or reduction. See U.S. Department of Agriculture, Forest Service and National Federation of Federal Employees, Local 450, 35 FLRA 542, 548 (1990).
The Arbitrator determined that the Agency violated the parties' collective bargaining agreement by arbitrarily denying the grievants' request for permission to engage in outside employment. Violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action. Id. The award, therefore, satisfies the first requirement for an award of backpay under the Back Pay Act. We find, however, that the Arbitrator's award does not meet the remaining two requirements of the Back Pay Act.
The Back Pay Act applies when an employee has been affected by an unwarranted or unjustified personnel action which "resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee[.]" 5 U.S.C. § 5596(b)(1). As stated by the United States Supreme Court, the Back Pay Act, "as its words so clearly indicate, was intended to grant a monetary cause of action only to those who were subjected to a reduction in their duly appointed emoluments or position." United States v. Testan, 424 U.S. 392, 407 (1976). 5 C.F.R. § 550.803, a Government-wide regulation, defines "[p]ay, allowances, and differentials" under the Back Pay Act as "monetary and employment benefits to which an employee is entitled by statute or regulation by virtue of the performance of a Federal function."
The Arbitrator found that as a result of the Agency's violation of the parties' collective bargaining agreement, the grievants lost the income they would have received as hearing officers for the DCSC. Acting as hearing officers for the DSCS, however, does not constitute "performance of a Federal function." 5 C.F.R. § 550.803. Further, even assuming that the grievants, as Federal employees covered by the parties' agreement, were entitled to approval for their requests for outside employment, the income that the grievants would have earned from that outside employment cannot be characterized as emoluments of their positions as Federal employees. Accordingly, we conclude that the grievants' pay, allowances, or differentials were not affected by the Agency's unjustified or unwarranted personnel action.
The Federal Government is not subject to monetary liability unless it has waived its sovereign immunity. See, for example, United States v. Testan, 424 U.S. at 399. Further, a "waiver of the traditional sovereign immunity 'cannot be implied but must be unequivocally expressed.'" Id. (citations omitted). As the Agency's violation of the parties' agreement did not result in a withdrawal or reduction of the grievants' pay, allowances or differentials, within the meaning of the Back Pay Act, the Back Pay Act does not provide a basis for the Arbitrator's award. We are aware of no other express authorizations for the Arbitrator's award of compensation to the grievants and none have been cited to us. Accordingly, we conclude that the award is deficient because it is contrary to law. We will, therefore, strike the portion of the award ordering compensation to the grievants.
The award is modified by striking the portion of the award ordering compensation to the grievants.
(If blank, the decision does not have footnotes.)