37:0816(67)AR - - HHS, SSA, Kansas City, MO and AFGE Local 1336 - - 1990 FLRAdec AR - - v37 p816



[ v37 p816 ]
37:0816(67)AR
The decision of the Authority follows:


37 FLRA No. 67

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SOCIAL SECURITY ADMINISTRATION

KANSAS CITY, MISSOURI

(Agency)

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

LOCAL 1336

(Union)

O-AR-1639

DECISION

September 28, 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 Charles E. Krider. The Arbitrator found that the Activity violated Article 26, Section 8 of the parties' collective bargaining agreement by not properly giving the grievant priority consideration for a promotion. The Arbitrator concluded that the grievant would have been promoted but for the failure of management to give him bona fide consideration for noncompetitive selection under his priority consideration and ordered that within 90 days of the date of his award, the grievant be promoted and a satisfactory training program be started. He further ordered that the grievant was to receive the higher rate of pay appropriate for the position no later than 90 days from the date of his award. He did not order backpay.

The Social Security Administration (the Agency) filed exceptions to the award on behalf of the Activity 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 exceptions.

We conclude that the Arbitrator properly enforced Article 26, Section 8 and that there is no basis for finding the award deficient on the ground that it is contrary to management's right to select under section 7106(a)(2)(C) of the Statute or FPM chapter 335, subchapter 1-4, requirement 4. However, we conclude that the Arbitrator's remedy ordering the grievant to be promoted within 90 days of the date of the award is contrary to section 7106(b)(1) of the Statute. Accordingly, we will modify the Arbitrator's award, as set forth below.

II. Background and Arbitrator's Award

The grievant is employed by the Activity as a GS-8 benefit authorizer. In 1986, his name was omitted from the best-qualified list for vacancies in a claims representative position. Because of this, he was given one priority consideration for a future vacancy. The grievant exercised his right to priority consideration for a November 1987 vacancy announcement for 22 claims authorizer positions. On December 22, 1987, the grievant was notified that he was not selected for the promotion. A grievance was filed over the grievant's failure to be selected.

The Arbitrator framed the issue as follows: "Did management violate Article 26, Section 8 of the National Agreement by not selecting the grievant for promotion based on priority consideration. If so, what is the appropriate remedy." Arbitrator's Award at 3. According to the Arbitrator, Article 26, Section 8 states in part:

Section 8 - Priority Consideration

A. Definition. For the purposes of this article a priority consideration is the bona fide consideration for noncompetitive selection given to an employee on account of previous failure to properly consider the employee for selection because of procedural, regulatory, or program violation.

Id. at 2.

There was no dispute that the grievant was entitled to priority consideration for a claims authorizer position. Id. at 5. The only issue was whether he in fact was given priority consideration by the Activity. The Arbitrator found that a priority consideration does not entitle the employee to automatic selection. Id. at 6. According to the Arbitrator, the crucial question is what standard the selecting officer must use in deciding whether to select the employee who has exercised a priority consideration. The Arbitrator concluded that because priority consideration under the collective bargaining agreement entitles an applicant to noncompetitive selection, the intent of the parties was that management must select an applicant with priority consideration if that employee meets the minimum standard that management has set for adequate performance of the job. Thus, the Arbitrator found that the phrase "noncompetitive selection" in Article 26, Section 8 of the parties' agreement requires management to: (1) avoid all comparisons with other actual or potential applicants; and (2) determine if the employee exercising priority consideration meets the minimum standard for promotion and, consequently, could adequately perform the job. He noted that there is no requirement that an unqualified employee be promoted under a priority consideration. Id. at 7-8.

The Arbitrator concluded that the record indicated that the grievant was qualified for the promotion and that he was not selected because of comparisons with other possible applicants who were better qualified. Id. at 8-11. The Arbitrator therefore determined that the grievant was not given bona fide consideration for noncompetitive selection, but had been subject to competitive selection. Id. at 11.

The Arbitrator further determined that the grievant would have been promoted under his priority consideration but for the failure of management to give him bona fide consideration. Id. at 12. The Arbitrator did not order backpay because there was no evidence of bad faith on the part of management. Instead, he ordered that the grievant be promoted within 90 days of the date of his award and be provided a satisfactory training program. He further ordered that the grievant was to receive the higher rate of pay appropriate for the claims authorizer position no later than 90 days from the date of the award. Id.

III. First Exception

A. Positions of the Parties

1. The Agency

The Agency excepts to the Arbitrator's order to promote the grievant to a claims authorizer position on the grounds that it violates section 7106(a)(2)(C) of the Statute and Federal Personnel Manual (FPM) chapter 335, subchapter 1-4, requirement 4. The Agency cites to the Authority's decision in Veterans Administration Medical Center, Houston, Texas and American Federation of Government Employees, Local 1633, 32 FLRA 997 (1988) (VAMC, Houston), where the Authority found an arbitrator's award that precluded an agency from selecting from any other appropriate source to be contrary to section 7106(a)(2)(C) of the Statute.

The Agency maintains that the grievant was entitled to be given priority consideration for the promotion in question in accordance with the terms of the parties' collective bargaining agreement and that this requirement was met. The Agency stresses that priority consideration is not an entitlement to selection and that a finding of such an entitlement usurps management's right under both section 7106(a)(2)(C) of the Statute and FPM chapter 335, subchapter 1-4, requirement 4 to consider alternative sources for such a selection and to determine the factors upon which its choice of source will be made. The Agency argues that but for the Arbitrator's illegal construction of the parties' agreement, there is no causal connection between the failure of the grievant to be promoted and an unwarranted personnel action.

The Agency asserts that the Authority should look behind the Arbitrator's "incantation of the 'magic words,' that the grievant would have been promoted but for" the violation of the agreement. Agency's Exceptions at 11. The Agency further claims that the Arbitrator's holding limits management's consideration of applicants to the factor of the employee's qualifications and prevents consideration of other bona fide factors related to the accomplishment of the Agency's mission.

The Agency argues that the Arbitrator's holding that the parties' intent was to mandate the selection of the employee if the employee could adequately perform the duties of the position violates section 7106(a)(2)(C) in two ways: (1) it mandates the selection of a given employee for a given position, thereby depriving management of its substantive right to determine whether to select or not to select a given individual and of its right to determine the appropriate source from which to fill a position; and (2) by holding that management must make the selection if the employee meets a certain minimum standard, the Arbitrator is depriving management of its right to set the criteria for selection to a given position. The Agency contends that by unilaterally defining the elements of those standards, and not restricting himself to the application of any such standards as defined by management, the Arbitrator negated management's right to determine the factors for selection to a position. The Agency maintains that the nonselection of the grievant was based on the selecting official's decision that he did not feel that the grievant was an adequate candidate for the job and that the Arbitrator erred in finding that the selecting official could not use any criteria in determining whether to select the grievant other than whether the grievant met the minimum qualifications as defined by the Arbitrator. Consequently, the Agency claims that as the Arbitrator's premise was faulty, any reconstruction based on that premise would be incorrect. Additionally, the Agency contends that it is questionable whether the Arbitrator did in fact engage in the reconstruction required by the Authority to support his determination.

The Agency claims that this case is distinguishable from the case before the Authority in American Federation of Government Employees, Local 1923, AFL-CIO and Health Care Financing Administration, Department of Health and Human Services, 33 FLRA 88 (1988) (HCFA), where the Authority denied exceptions to an award finding that the grievant would have been selected for a vacancy had she been notified of her entitlement to priority consideration, as required by the collective bargaining agreement, and ordering the promotion of the grievant. Finally, the Agency cautions that any decision by the Authority that allows a priority consideration to be equated to a right to selection has far-reaching implications across the Federal Government.

2. The Union

The Union disagrees with the Agency's argument that the Arbitrator "usurped" the rights of management and contends, instead, that the Arbitrator made no finding that priority consideration meant selection. The Union argues that agencies may negotiate exceptions to their merit promotion plans including a limitation on their power to select from all appropriate sources, citing American Federation of Government Employees, AFL-CIO, Local 32 and Office of Personnel Management, 29 FLRA 380 (1987), petition for review denied sub nom. OPM v. FLRA, 864 F.2d 165 (D.C. Cir. 1988) (AFGE, Local 32). Thus, the Union claims that the interpretation by the Arbitrator that the parties limited management's power to select by agreeing to the language in Article 26, Section 8 is not contrary to law. The Union also claims that the FPM gives agencies the discretion to limit selection authority in the consideration of a candidate not given proper consideration in a competitive promotion action. FPM chapter 335, subchapter 1-5(c)(7).

The Union argues that, according to the Authority's decision in AFGE, Local 32 and the FPM, priority consideration is listed as one of the exceptions to normal merit promotion procedures and is negotiable under section 7106(b)(3) of the Statute. In the Union's view, because priority consideration is part of the collective bargaining agreement and is an exception provided for in the FPM, management has clearly relinquished the right to unilaterally determine the source for selection. Therefore, the Union asserts that the Arbitrator's award is not contrary to the FPM and section 7106(a)(2)(C), as claimed by the Agency.

The Union also asserts that the award is based on the Arbitrator's finding of what the selection official should have done in the review of the grievant's priority consideration. The Union maintains that this reconstruction is in accordance with the Authority's decision in HCFA and was correct.

B. Analysis and Conclusions

In Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA No. 20 (1990) (U.S. Customs Service), we recently reexamined our approach to cases in which an agency contends that an arbitrator's award, enforcing a provision of the parties' collective bargaining agreement, is contrary to management's rights under section 7106(a). We held that when an agency contends that an arbitrator's award enforcing a provision of the parties' collective bargaining agreement is contrary to section 7106(a), we will examine the provision enforced by the arbitrator to determine: (1) if it constitutes an arrangement for employees adversely affected by the exercise of management's rights; and (2) if, as interpreted by the arbitrator, it abrogates the exercise of a management right. We explained that if it is evident that the provision constitutes an arrangement and, as interpreted by the arbitrator, does not abrogate management's rights, the provision is within the range of matters that can be bargained under the Statute. Accordingly, we held that we will not find that such an award is contrary to law and we will deny the exception. We also held that if the arbitrator's interpretation does result in an abrogation of management's rights under section 7106(a), the award will be found deficient as contrary to law, but the contractual provision, susceptible to a different and sustainable interpretation by a different arbitrator, will not be affected.

We noted in U.S. Customs Service that, of course, the arbitrator's interpretation and application of the provision must draw its essence from the parties' collective bargaining agreement. We encouraged the parties to set forth plainly and precisely the arrangements to which they have agreed for employees adversely affected by the exercise of management's rights. We held that when a party establishes that the arbitrator's enforcement of the agreement does not represent a plausible interpretation of the agreement or evidences a manifest disregard of the agreement, we will find the award deficient, not because it is contrary to section 7106(a) of the Statute, but because the award fails to draw its essence from the parties' collective bargaining agreement. Because documentary evidence of the meaning and intent of the negotiated arrangement can serve as support for such an exception, we encouraged such documentation by the parties.

Applying the approach set forth in U.S. Customs Service in this case, we conclude that the Agency fails to establish that the award is contrary to section 7106(a)(2)(C). Article 26, Section 8 provides that priority consideration is "given to an employee on account of previous failure to properly consider the employee for selection because of procedural, regulatory, or program violation." The Agency noted that priority consideration is "to remedy the employee's having been wrongfully denied consideration for a prior promotion." Agency's Exceptions at 4. It is clear that Article 26, Section 8 constitutes an arrangement for employees adversely affected by management's right to select. Furthermore, the provision as interpreted and applied by the Arbitrator only requires management to select an employee exercising a priority consideration when management determines that the application meets the minimum standards that management has set for adequate performance of the job. Although this interpretation limits management from selecting from any appropriate source in those instances where a qualified employee exercises priority consideration, this interpretation preserves management's right to determine the "minimum standard . . . for adequate performance of the job" and provides "no requirement than [sic] an unqualified employee be promoted under a priority consideration." Award at 7-8.

Consequently, we find that the provision as interpreted and applied by the Arbitrator clearly does not abrogate the exercise by management of its right to select. Therefore, the provision was enforced by the Arbitrator consistent with management's rights. In this regard, we note that FPM chapter 335, subchapter 1-5(c) provides that agencies have the discretion to except from their merit promotion plans the consideration of employees not given proper consideration in a competitive promotion action. Under Authority precedent, this discretion may be exercised through negotiations. Because we find that Article 26, Section B, as interpreted by Arbitrator, was enforced consistent with section 7106(a)(2)(C), we also find that the award does not conflict with FPM chapter 335, subchapter 1-4, requirement 4. AFGE, Local 32 (Proposal 2).

Accordingly, we conclude that the Arbitrator properly enforced Article 26, Section 8 of the parties' agreement and that there is no basis for finding the award deficient on the ground that it is contrary to management's right to select under section 7106(a)(2)(C) of the Statute or FPM chapter 335, subchapter 1-4, requirement 4.(*)

IV. Second Exception

A. Positions of the Parties

The Agency excepts to the Arbitrator's failure to limit his award to requiring the Activity to select the grievant for the next available vacancy in view of the fact that there is no vacancy into which the grievant can be promoted. The Agency asserts that, to the extent the award requires the Activity to create a vacancy, the award conflicts with section 7106(b)(1) of the Statute by violating management's right to determine staffing patterns.

The Union disputes the Agency's assertion that the Arbitrator's remedy violates section 7106(b)(1). The Union cites to the Authority's decision in Social Security Administration and American Federation of Government Employees, Local 1336, 29 FLRA 225 (1987), where the Authority held that an arbitrator's award directing the transfer of an employee was proper and that the agency had not established that the award was directly related to the numbers of employees or positions assigned to an organizational subdivision so as to be determinative of such matters. The Union contends that the Agency has not established that the Arbitrator's award would directly affect the number of employees or positions assigned. The Union notes that shortly after the Arbitrator issued his award, management announced the filling of 30 claims authorizer vacancies.

B. Analysis and Conclusions

The Agency's exception presents an issue of first impression before the Authority of whether an award of a prospective promotion, without regard to whether an appropriate vacant position exists, is contrary to section 7106(b)(1) of the Statute. For the reasons that follow, we conclude that such an award is deficient.

The Authority has expressly held that an arbitrator's award that improperly interferes with management's right to determine the numbers of employees or positions assigned to an organizational subdivision will be found deficient as contrary to section 7106(b)(1) of the Statute. See U.S. Immigration and Naturalization Service and American Federation of Government Employees, AFL-CIO, Local 1917, 20 FLRA 391, 396-97 (1985) (INS). We will continue to apply this approach to section 7106(b)(1). We will not apply the approach set forth in U.S. Customs Service because section 7106(b)(1) concerns matters over which an agency may elect to bargain. The abrogation standard of U.S. Customs Service is not applicable to matters which an agency may elect to bargain on and agree to as part of its collective bargaining agreement. Accordingly, when an award is claimed to be contrary to section 7106(b)(1), we will continue to examine the award and the record to determine whether the award has merely enforced a provision of the parties' collective bargaining agreement which, as interpreted by the arbitrator, constitutes the parties' agreement on the section 7106(b)(1) matter in dispute. See INS, 20 FLRA at 376. If the award merely enforces the parties' agreement, we will deny the exception. Bureau of Engraving and Printing, Department of the Treasury and Washington Plate Printers Union, Local No. 2, International Plate Printers, Die Stampers and Engravers, 29 FLRA 467 (1987); National Treasury Employees Union and U.S. Customs Service, 18 FLRA 780 (1985); Local 1917, American Federation of Government Employees and United States Immigration and Naturalization Service, Eastern Region, 13 FLRA 77 (1983). We will find the award deficient when the award interferes with the exercise of a management right under section 7106(b)(1) and does not constitute the enforcement of the parties' agreement on the section 7106(b)(1) matter in dispute. INS.

In terms of the Arbitrator's remedy in this case, we find that an arbitration award that orders an employee prospectively promoted without regard to whether an appropriate vacant position exists interferes with management's right under section 7106(b)(1) to determine the numbers of employees or positions assigned to an organizational subdivision. In our view, such an award encompasses the situation where, in order to comply with the award, the agency must establish an appropriate position to which the grievant can be promoted. Consequently, unless the arbitrator is merely enforcing an applicable agreement of the parties, the consistency of such an award with management's right to determine its staffing patterns cannot be conclusively confirmed when the arbitrator renders the award. Accordingly, when an arbitrator orders an employee prospectively promoted without regard to whether an appropriate vacancy exists and an agency excepts to the award on the basis that the award conflicts with management's right under section 7106(b)(1) to determine the numbers of employees or positions assigned to an organizational subdivision, we will find that such an award is deficient unless the award merely enforces an applicable agreement of the parties on such matter. On finding the award deficient, we will modify the award to preserve both management's right to determine its staffing patterns and the essence of the arbitrator's relief.

To preserve management's right, we will substitute the remedy that the grievant be promoted to the next available appropriate vacancy. To maintain the essence of the arbitrator's relief, we will also direct that the grievant receive backpay, if appropriate. Backpay will be appropriate when the agency fills an appropriate vacancy with a person other than the grievant between the date of the arbitrator's award and the date of the Authority's decision modifying the award as stated above. This approach will permit the agency to file exceptions to the award and to fill vacancies during the pendency of the exceptions before the Authority without fear of committing an unfair labor practice by failing to comply with the arbitrator's award. At the same time, this remedy establishes that the date the agency fills a position appropriate for the grievant will be the benchmark for backpay relief to the grievant under the modified award.

Of course, such a finding of deficiency and modification of the award can be avoided if arbitrators limit awards of prospective promotions to the next available appropriate vacancy. We encourage parties to inform their arbitrators of this limitation and urge arbitrators to take notice of this limitation in fashioning appropriate remedies. In this respect, we note that section 7106(b)(1) applies only to awards of prospective promotions. Nothing in section 7106(b)(1) or this decision applies to awards of retroactive promotions with backpay. Arbitrators remain authorized to award retroactive promotions when they have made the required findings, which findings are unaffected by this decision.

Applying this approach in the present case, we find that the Arbitrator's order that the grievant be promoted within 90 days of the date of the award is contrary to management's right to determine staffing patterns under section 7106(b)(1). The Arbitrator's order was without regard to whether an available appropriate vacancy existed and was not the enforcement of a provision of the parties' collective bargaining agreement relating to the numbers of employees or positions assigned to an organizational subdivision. Accordingly, we will modify the award to substitute an order that the grievant be promoted to the next available GS-9 claims authorizer position with backpay, if appropriate. Backpay will be appropriate if during the period from September 23, 1988, to the date of this decision, the Agency filled a GS-9 claims authorizer position with a person other than the grievant for which the grievant would have been within the specified area of consideration. In such event, the backpay will commence on the effective date of that appointment to the position and will run until the grievant is promoted consistent with this decision. In the event that more than one such position was filled during this period, the backpay will commence on the earliest effective date of an appointment. Any dispute over backpay under this decision would be appropriately raised as an issue of compliance with the award, as modified by this decision.

Because we find, for the reasons stated above, that the Arbitrator's remedy conflicts with management's right to determine the numbers of employees or positions in an organizational subdivision, we believe that this case is distinguishable from AFGE Local 1336, cited by the Union. In AFGE Local 1336, the Authority expressly concluded that the agency failed to establish that the award in any manner conflicted with section 7106(b)(1), although the Authority did not explain the reasons for its conclusion. In contrast to this case, AFGE Local 1336 involved a transfer rather than a promotion and the agency did not argue that in order to comply with the award, it would have to establish a position that did not exist. However, to the extent that AFGE Local 1336 may be viewed as conflicting with the approach we have outlined above and applied in this case, it will no longer be followed.

V. Decision

The Arbitrator's award is modified by vacating the Arbitrator's order that the grievant is to be promoted within 90 days of the date of the award with no backpay. The following remedy is substituted for the vacated order: The grievant will be promoted to the next available GS-9 claims authorizer position with backpay, if appropriate. As described above, backpay will be appropriate if during the period from September 23, 1988, to the date of this decision, the Agency filled a GS-9 claims authorizer position for which the grievant would have been within the specified area of consideration. Such backpay will be computed from the effective date of the appointment to the position until the grievant is promoted.




FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

*/ In applying the foregoing analysis, we recognize that the Arbitrator found that the grievant would have been promoted but for management's failure to grant him priority consideration and that, normally, we will not look behind an arbitrator's award in cases where the arbitrator makes the necessary "but for" finding. However, when an arbitrator evaluates and interprets the intent of provisions in the parties' agreement in making such a finding, and management argues that such interpretation interferes with a management right under the Statute, we will review the basis for the arbitrator's "but for" finding. W