37:1204(103)AR - - Commerce, Patent and Trademark Office and Patent Office Professional Association - - 1990 FLRAdec AR - - v37 p1204



[ v37 p1204 ]
37:1204(103)AR
The decision of the Authority follows:


37 FLRA No. 103

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF COMMERCE

PATENT AND TRADEMARK OFFICE

(Agency)

and

PATENT OFFICE PROFESSIONAL ASSOCIATION

(Union)

0-AR-1730

DECISION

October 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 Robert J. Ables filed by the Union 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 Agency filed an opposition to the Union's exceptions.

The Arbitrator denied the grievance claiming that the Agency violated the parties' collective bargaining agreement by changing the requirements for employees to qualify for overtime assignments. The Arbitrator determined, in this regard, that a previous decision by the Authority prevented him from finding a violation of the agreement. Based on this determination, the Arbitrator did not address the Union's other contentions, or determine an appropriate remedy.

For the following reasons, we have determined that it is necessary to remand this case to the parties, so that they may, in turn, request the Arbitrator to address unresolved issues and, if appropriate, determine a remedy.

II. Preliminary Matters

The Agency contends that the Union's exceptions were filed untimely. The Agency notes that the award was served on the parties on March 31, 1989, and that the Union's exceptions were filed with the Authority on May 8, 1989, 39 days after service of the award. The Agency acknowledges that, consistent with the Authority's interpretation of applicable regulations in American Federation of Government Employees, Local 1960 and Department of the Navy, Development Center, 29 FLRA 680 (1987) (Navy Development Center), the exceptions were timely filed. The Agency, however, "respectfully suggests that case was wrongly decided." Opposition at 5. The Agency relies on interpretations of Rule 6(e) of the Federal Rules of Civil Procedure in support of its assertion.

We reject the Agency's contention that the Union's exceptions were filed untimely. The time limit for filing exceptions to an award is 30 days beginning on the date the award is served on the filing party. 5 C.F.R. § 2425.1(b). The date of service is the date the arbitration award is deposited in the U.S. mail or is delivered in person. 5 C.F.R. § 2429.27(d). If the award is served by mail, 5 days are added to the 30-day period. 5 C.F.R. § 2429.22. As the Agency acknowledges, however, the 5 days are added only after the 30-day period is calculated, with due allowances for weekends and holidays as required by section 2429.21 of our Regulations. See Navy Development Center. See also U.S. Department of the Army, Aberdeen Proving Ground and International Association of Machinists and Aerospace Workers, Local Lodge No. 2424, 33 FLRA 855 (1989).

In the instant case, the award was served on the parties on March 31, 1989. Accordingly, the 30-day time period for filing exceptions expired on April 29, 1989. As April 29 was a Saturday, however, the last day of the 30-day period is advanced to the end of the next workday: Monday, May 1, 1989. 5 C.F.R. § 2429.21. Then, because the award was served by mail, 5 days are added to the filing period. Accordingly, the time period for filing exceptions is advanced to May 6, 1989. As May 6 was a Saturday, however, the time limit is again advanced to the end of the next workday: Monday, May 8, 1989.

The Union's exceptions were filed, by hand delivery, with the Authority on May 8, 1989. Accordingly, the exceptions were timely filed.

We reject the Agency's assertion that the Authority's construction of its Regulations is improper. Nothing in the Authority's interpretation of its Regulations is inconsistent with the plain wording of the regulations and, in addition, the interpretation is one of long-standing and is well known to the parties. The Agency has presented no good reason that this well-established interpretation is impermissible.

III. Background

The Agency employs approximately 1,400 patent examiners who are divided into examining groups and art units. The patent examiners, who are responsible for examining patent applications, are assigned production goals based on their grade levels. An examiner must achieve 80 percent of his/her production goal to receive a satisfactory performance rating. For "at least 15 years" prior to the filing of the grievance, "no patent examiner who had attained an 80 [percent] productivity level had been denied overtime." Award at 7.

On January 29, 1987, the supervisor in one art unit (Unit 221) increased the productivity level required for overtime assignments. (1) As a result of the increase, the Union filed a grievance alleging that the Agency violated Article 9 of the parties' collective bargaining agreement, "particularly section 1 E" of that article. (2) To remedy the claimed violation, the Union requested "back[]pay for those patent examiners who would have worked overtime if their supervisor in . . . Unit 221 had not excluded them by raising production standards." Id. at 4.

When the grievance was not resolved, it was submitted to arbitration.

IV. The Arbitrator's Award

The Arbitrator did not specifically frame the issue before him. The Arbitrator stated only that "[a]t issue is a dispute about overtime under a collective bargaining agreement . . . in which the [U]nion charges that the [Agency] violated that agreement by increasing the percentage of work a patent examiner had to complete before being eligible for overtime work." Id. at 1.

Before the Arbitrator, the Union argued two things. First, the Union argued that "specific negotiations leading to the current contract and long application of existing criteria for measuring work production" established that the "cut-off" for assigning overtime based on production goals was a rating of fully satisfactory (80 percent of the production goal). Id. at 2. The Union claimed that the Agency could not unilaterally change the production requirement for overtime.

Second, the Union argued that, based on Article 9, section 2 of the parties' agreement, the criteria for authorizing overtime must be applied uniformly in any "cost center" for which overtime is authorized. Id. at 3. According to the Union, the term "cost center" meant the entire "examining corps" and not one art unit. Id. at 4.

The Agency asserted to the Arbitrator that, consistent with the management rights enumerated in Article 3 of the parties' agreement and previous Authority decisions, it "was privileged to raise production quotas in deciding which patent examiners were to work overtime." Id. The Agency asserted also that (1) Unit 221 constituted the "cost center" for purposes of application of Article 9, section 2 of the parties' agreement; and (2) the Union's reliance on Article 9, section 1(E) of the parties' agreement was misplaced because that provision does not "mention or imply" any specific production goals. Id. at 4-5. (3)

The Arbitrator noted that in 1986, the parties agreed to retain "the exact language appearing in the contract back to 1972 to determine eligibility for overtime." Id. at 8. The Arbitrator stated that "Union witnesses testified convincingly" that in negotiations for the parties' agreement, the Agency's chief negotiator "not only confirmed . . . that no patent examiner had ever been denied overtime who had achieved an 80 [percent] productivity factor, but that such level of production would be the standard in applying the contract, as renewed." Id. Accordingly, the Arbitrator concluded that the parties "had a long, unchanged collective bargaining agreement, with a long, unchanged standard" for determining qualifications for overtime assignments, and that there was "a solid foundation . . . to find that management could not comprehensively change the standard . . . ." Id. at 9.

The Arbitrator concluded also that, if the dispute "had occurred in the private sector[,]" there were other reasons to sustain the grievance. Id. The Arbitrator noted that, in part, the Agency increased the production levels "to induce low producers to bring up their production . . . ." Id. at 10. The Arbitrator found, however, that because productivity "on overtime counts for productivity determinations on level of performance[,]" patent examiners "with higher productivity factors, who are selected to work overtime and who work overtime, have increased opportunities to work still additional overtime, while those not so selected fall further and further behind, unless those patent examiners . . . work harder so that they later qualify for overtime." Id. at 10-11 (emphasis omitted). According to the Arbitrator, the Agency's change was "a left-handed way to increase regular production." Id. at 11.

Further, with regard to the Agency's claim that it raised the production levels, in part, to "reward good producers[,]" the Arbitrator stated that "[t]ypical collective bargaining agreements" were drawn to equalize distribution of overtime among qualified employees and that "[a]lmost always" the agreements were drawn "to preclude management from assigning overtime work to the best or preferred employees." Id. at 10-11. The Arbitrator stated that "[a]ssigning overtime as a reward or withholding assigning overtime as a penalty is archaic in labor relations most everywhere--except[], perhaps, in some [F]ederal agencies." Id. (4)

However, the Arbitrator determined that, in asserting that "despite agreed standards for assigning overtime, . . . there is no limit on what a supervisor may decide[,]" the Agency had "the law on its side." Id. at 11-12. The Arbitrator stated that the Authority's decision in Social Security Administration, Office of Hearings and Appeals and National Treasury Employees Union, Chapter 224, 31 FLRA 1172 (1988) (SSA), "block[ed] a decision here favorable to the [U]nion." Id. at 13. The Arbitrator noted that, in that case, the Authority set aside an arbitrator's finding that the agency violated the parties' collective bargaining agreement by changing the standards for assignments to overtime based on the Authority's conclusion that the award violated the agency's right to assign work under section 7106(a)(2)(B) of the Statute.

The Arbitrator rejected the Union's arguments that the situation in SSA was distinguishable from the one before him. Accordingly, based on "findings only that the decision . . . in [SSA] preclude[d] a decision favorable to the [U]nion . . . ," the Arbitrator denied the grievance. Id. at 16. The Arbitrator stated, in this regard, that his "disposition . . . to sustain the grievance . . . [was] clear." Id. n.13. The Arbitrator also stated, however, that if he sustained the grievance, it was "inevitable" that the Authority would set aside the award. Id. As the Arbitrator denied the grievance, he stated that findings were "not required about the intended scope of the term 'cost center' in Article 9, Section 2 of the contract, or with respect to back[]pay." Id. at 16. (5)

V. The Parties' Positions

A. The Union's Exceptions

The Union asserts that the Arbitrator's award is deficient because it is inconsistent with sections 7122(b) and 7116(a)(1) and (5) of the Statute.

With respect to its first exception, the Union notes that the parties' agreement "is not an agreement at all." Exceptions at 2. Instead, according to the Union, the parties' agreement is, "in its entirety, the award of" an interest arbitrator. Id. The Union asserts that because the Agency did not file timely exceptions to the interest arbitration award, the award, which encompassed the entire agreement, became final and binding under section 7122(b) of the Statute.

The Union asserts, based on Authority decisions, that once an interest arbitration award becomes final and binding, it is not subject to collateral attack. The Union claims, in this regard, that the Arbitrator "permitted the [Agency] to collaterally attack the enforceability" of the interest arbitration award. Id. at 8. Accordingly, the Union argues that the award conflicts with section 7122(b) of the Statute.

Second, the Union asserts that the Agency committed an unfair labor practice, in violation of section 7116(a)(1) and (5) of the Statute, by unilaterally changing the requirements for assigning overtime. The Union contends that even if, under SSA, a status quo ante remedy is not appropriate for the Agency's unfair labor practice, there are other appropriate remedies available in this case, including individual monetary relief for the employees who were adversely affected by the change.

The Union requests that the case be remanded to the Arbitrator to determine an appropriate remedy for the Agency's violation of the parties' agreement and for the Agency's unfair labor practice.

B. The Agency's Opposition

The Agency asserts that the award is not inconsistent with section 7122(b) of the Statute. The Agency claims, in this regard, that it has not alleged that "any part of the contract is invalid, or is contrary to law or regulation." Opposition at 7. Instead, according to the Agency, it argued to the Arbitrator only that "to place the interpretation on the disputed words that the [U]nion seeks would thereby cause the [A]gency to apply the contract so as to limit the management rights it possesses under the law; rights it never gave up during negotiations, and never had taken away by the interest arbitrator." Id. The Agency asserts that the Union should not be allowed "to read words" into the existing contract and that the Union's exception constitutes mere disagreement with the Arbitrator's findings and does not provide a basis for finding the award deficient. Id. at 9.

With respect to the Union's second exception, the Agency asserts that "[b]ecause there has never been a ruling that . . . a ULP was committed, the award cannot be contrary to law because it did not provide a remedy for the non-existent ULP." Id. at 10.

VI. Analysis and Conclusions

We reject the Union's contentions that the award is inconsistent with sections 7122(b) and 7116(a)(1) and (5) of the Statute. Nevertheless, for reasons discussed below, we find that the award must be remanded to the parties in order to request the Arbitrator to decide any unresolved issues and, if appropriate, determine an appropriate remedy.

First, it is clear that an award which has become final and binding under section 7122(b) of the Statute must be complied with by the parties. See U.S. Department of Health and Human Services, Health Care Financing Administration, 35 FLRA 491, 494-97 (1990). The Union has confused interpretation of the contract with compliance with the contract, however. In this case, the parties' dispute centered on the interpretation of Article 9 of their agreement. The dispute did not involve the validity, or enforceability, of that provision. In other words, the Agency did not defend its failure to take required action by asserting that the contract was unenforceable. Compare Patent and Trademark Office and Patent Office Professional Association, 22 FLRA 7, 9-10 (1986) (Agency's assertion that portion of award, which required the Agency to "honor and implement" a contractual provision previously imposed by an interest arbitrator, was deficient because the underlying provision was unenforceable provided no basis for finding the award deficient).

Instead, the Agency here asserted that its actions were consistent with the parties' agreement. By resolving the parties' dispute over the meaning of the contract, therefore, the Arbitrator did not permit a collateral attack on the validity, or enforceability, of the agreement. Accordingly, we find no basis on which to conclude that the award conflicts with section 7122(b) of the Statute. See U.S. Patent and Trademark Office and Patent Office Professional Association, 32 FLRA 1168, 1180-81 (1988) (Authority rejected Union's assertion that Arbitrator's interpretation of provision imposed by interest arbitrator and finding that the Agency did not violate that provision constituted a collateral attack on the validity of the interest arbitration award).

Second, we will not here entertain the Union's assertion that the Agency's actions constituted an unfair labor practice. There is no indication in the record that this issue was raised to the Arbitrator. We note, in this regard, that there are no assertions that the Union was precluded in any way from grieving the allegation that the Agency violated section 7116(a)(1) and (5). Instead, the Union grieved only the alleged contractual, as opposed to the statutory, violation. As the allegation that the Agency committed an unfair labor practice was not raised before the Arbitrator, there is no basis for finding the award deficient because it did not provide a remedy for the alleged unfair labor practice.

For the foregoing reasons, we reject the Union's exceptions. Nevertheless, for the following reasons, we conclude that the case must be remanded to the parties.

In Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA 309 (1990) (Customs Service), we reexamined our approach to cases involving an arbitrator's enforcement of contractual provisions relating to management's rights under section 7106(a) of the Statute. We held that in resolving exceptions alleging that an arbitrator's enforcement of a contractual provision is contrary to management's rights under 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 stated that if it is evident that a 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. Customs Service, 37 FLRA at 314. We held also that, when an arbitrator is presented with a provision that constitutes an arrangement, the arbitrator may not refuse to enforce the provision on the basis of a conflict with management's rights under section 7106 of the Statute unless the provision abrogates a management right. Id. at 315.

We noted in Customs Service that an arbitrator's interpretation and application of a provision must draw its essence from the parties' agreement. 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. In such a circumstance, however, the award will be found deficient because it fails to draw its essence from the agreement, not because it conflicts with management's rights. Id. at 316-17.

Applying the approach set forth in Customs Service in this case, it is evident that the Arbitrator refused to enforce Article 9, section 1, of the parties' agreement solely because he concluded that, as interpreted, that provision conflicted with management's rights under section 7106(a) of the Statute. The Arbitrator concluded, in this regard, that:

[T]he parties have had a long, unchanged collective bargaining agreement, with a long, unchanged standard by which to measure the number of cases a patent examiner had completed, with agreed standards when he would be eligible for overtime work, within the meaning of Article 9, Section 1 E of the contract.

There is, accordingly, a solid foundation under this contract and facts to find that management could not comprehensively change the standard by which to determine who will be eligible for overtime work.

Award at 9.

It is evident also that, as interpreted by the Arbitrator, Article 9 of the parties' agreement constitutes an arrangement for employees adversely affected by the exercise of management's right to assign work and that the provision does not abrogate management's right. The provision, as interpreted and applied by the Arbitrator, merely requires the Agency to adhere to objective criteria and agreed-upon production standards in assigning overtime. Those standards, in turn, guarantee that employees who are producing quantities of work which satisfy their performance standards will not be denied opportunities to perform overtime and, according to the Arbitrator, thereby "fall further and further behind" those patent examiners with higher productivity factors. Id. at 10. In addition, as work performed during overtime "counts for productivity determinations on level of performance[,]" enabling "satisfactory" performers to perform overtime facilitates the ability of those employees to increase their productivity. Id. Finally, as noted by the Arbitrator, the provision, as he interpreted and applied it, precludes the Agency from selectively assigning overtime only to "preferred employees." Id. at 11. The provision provides a measure of equity, therefore, while preserving the Agency's rights to ensure that necessary overtime work is performed by "satisfactory" employees.

Article 9, as interpreted and applied by the Arbitrator, constitutes an arrangement that does not abrogate management's rights. Accordingly, the Arbitrator could not, consistent with Customs Service, refuse to enforce that provision simply because it conflicted with management's right to assign work. It is clear, in this regard, that the Arbitrator refused to enforce the provision solely on that basis. In fact, the Arbitrator stated that he denied the grievance "[o]n findings only that the decision of the [Authority] in [SSA] preclude[d] a decision favorable to the [U]nion . . . ." Id. at 16.

We note, in this regard, that it is unnecessary here to address whether, or to what extent, the Authority's decision in SSA is inconsistent with Customs Service. The approach developed in Customs Service was expressly recognized to be a "reexamination" of previous approaches and is not to be applied to cases previously decided by the Authority. 37 FLRA at 313. Moreover, it appears from the Authority's analysis in SSA that the union sought contractual enforcement of a past practice. As noted previously, in this case, the Arbitrator found specifically that the parties agreed that Article 9, section 1(E) of their agreement included the 80 percent productivity level.

In view of our conclusion that the Arbitrator could not refuse to enforce Article 9 of the parties' agreement, as he interpreted it, it is appropriate to address the Agency's assertion that the phrase "required quantity and quality of work" in Article 9, section 1(E) of the parties' agreement cannot be given "precise meaning" by applying the 80 percent productivity level established for satisfactory performance. Opposition at 9. According to the Agency, the Union "is trying to have additional language placed into the agreement, not by bargaining, but by interpretation and application." Id. The Agency maintains, in this regard, that the Union's exceptions constitute mere disagreement with the Arbitrator's interpretation and application of the parties' agreement.

We reject the Agency's assertion. It is clear, in this regard, that the Union does not disagree with the Arbitrator's interpretation of the agreement. In fact, the Arbitrator adopted the Union's interpretation of the parties' agreement. See Award at 8 (Arbitrator found "convincing[]" testimony that the Agency's chief negotiator agreed during contract negotiations that "an 80 [percent] productivity factor . . . would be the standard in applying the contract[.]"). The Union expressly states, in this regard, that "[i]t ought to be obvious that [the Union] has no quarrel" with the Arbitrator's interpretation of the parties' agreement. Exceptions at 5.

As it is clear from the award that the Arbitrator's and the Union's interpretations of the parties' agreement are the same, the Agency's assertions regarding that matter are, in our view, disagreement with the Arbitrator's interpretation of the agreement. As noted previously, an award that otherwise is enforceable under the Customs Service analysis is deficient if it fails to draw its essence from the agreement. We construe, for purposes of this decision, the Agency's arguments concerning the interpretation of Article 9 of the parties' agreement as an assertion that the Arbitrator's award, interpreting and applying Article 9, fails to draw its essence from the contract.

To demonstrate that an award fails to draw its essence from an agreement, it must be shown 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. See, for example, U.S. Department of the Treasury, Internal Revenue Service, Omaha, Nebraska District and National Treasury Employees Union, 36 FLRA 453, 462 (1990) (IRS).

There is no basis in this case on which to conclude that the Arbitrator's interpretation of Article 9 of the parties' agreement fails to draw its essence from the agreement under any of the tests set forth above. The Arbitrator's interpretation of Article 9 is not irrational, implausible, or unconnected to the wording and purpose of the agreement. In fact, the Arbitrator's interpretation of the agreement is not inconsistent with testimony offered by the Agency during the arbitration hearing. As noted above, the Union's witnesses testified "convincingly" during the arbitration hearing that the Agency agreed during contract negotiations that Article 9, section 1(E) encompassed the 80 percent productivity level. Award at 8. The Agency's chief negotiator testified that he "could not remember committing" the Agency to the 80 percent factor. Id. at n.6.

Based on the foregoing, we conclude that: (1) Article 9 of the parties' agreement constitutes an arrangement for employees adversely affected by the exercise of management's right to assign work; (2) as interpreted and applied by the Arbitrator, that provision does not abrogate management's right; (3) the Arbitrator's interpretation of Article 9 draws its essence from the agreement; and (4) the Arbitrator refused to enforce the negotiated arrangement solely on the basis of a conflict with management's right. Consistent with Customs Service, therefore, the award is deficient.

As the Arbitrator determined that he could not, consistent with the Statute, enforce Article 9, the Arbitrator stated that "findings [were] not required about the intended scope of the term 'cost center' in Article 9, Section 2 of the contract, or with respect to back[]pay." Award at 16. With respect to the former point, we note the Arbitrator's discussion of the parties' dispute over the meaning of the "cost center" reference. See id. at 8 n.5. With respect to the latter point, the Union's requested remedy, there are no findings in the award on that matter.

Accordingly, it is necessary to remand the award to the parties. On remand, the parties are, of course, free to resolve any remaining disputed issues bilaterally. If they are unable to do so, the parties should request the Arbitrator to decide any unresolved issues and, if appropriate, determine a remedy.

VII. Decision

The award is remanded to the parties to take action consistent with this decision.




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

1. The Arbitrator made no findings concerning the extent of the increase in the productivity levels. According to the Arbitrator, the parties' dispute was "about management's right to make a change, not about the amount of change in productivity goals." Award at 6 n.3.

2. Article 9 of the parties' agreement provides:

Section 1

When management deems there is a specific need for compensated overtime or that such is a proper and fit manner to expend funds, then overtime shall be authorized in accordance with the following criteria:

A. the amount of work to be done;

B. the funds available to do the work;

C. the ability of the member of the Unit to satisfy the specific need;

D. the ability of the member of the Unit to perform the work to be done in an independent manner during the period of overtime;

E. demonstrated effectiveness in producing the required quality and quantity of the work product involved.

Section 2

The above criteria shall be uniformly applied in any cost center for which overtime is authorized. Insofar as practicable, overtime will be on a voluntary basis. Justification for restricting or denying overtime shall be in writing if requested by the member of the Unit affected.

Award at 3 n.1.

3. According to the Arbitrator, the Agency's chief negotiator "confirmed the historical application of the agreement but could not remember committing the [Agency] to future cut-off standards, the same as in the past." Award at 8 n.6.

4. The Arbitrator found, in this regard, that "[w]hen on overtime, almost without exception, patent examiners do what they have been doing on regular time." Award at 10 (citation omitted). The Arbitrator found also that "[n]othing in evidence suggest[ed] working overtime in the patent office require[d] special protection of management rights, as compared to private industry." Id. at 9 n.8.

5. Although the Arbitrator found that the dispute over the "cost center reference" in the parties' agreement was "academic," he stated, "because of extensive argument on the point, that the [U]nion seem[s] not to understand what was intended by the phrase when it adopted that reference from