37:1218(104)AR - - DOD, Defense Contract Audit Agency, Central Region and AFGE Local 3529 - - 1990 FLRAdec AR - - v37 p1218



[ v37 p1218 ]
37:1218(104)AR
The decision of the Authority follows:


37 FLRA No. 104

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF DEFENSE

DEFENSE CONTRACT AUDIT AGENCY

CENTRAL REGION

(Agency)

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

LOCAL 3529

(Union)

0-AR-1727

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 H. Kubie. Grievances were filed disputing the 1988 performance appraisal ratings and promotion potential ratings for GS-12 bargaining unit employees. The Arbitrator sustained the grievances and ordered the Activity to reappraise the employees.

The Activity filed exceptions 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 award is contrary to 5 C.F.R. § 430.206(c), and we will modify it accordingly.

II. Background

The Union filed grievances claiming that management had changed its practices in connection with the 1988 annual performance appraisals and promotion potential appraisals of GS-12 bargaining unit employees. The grievances were not resolved and were submitted to arbitration.

Before the Arbitrator, the Union contended that the Activity had violated applicable law, the Defense Contract Audit Agency Personnel Management Manual (PMM), and the parties' collective bargaining agreement in several respects. The Union claimed that the ratings were not made by the employee's immediate supervisor, then discussed with the employee, and then reviewed by the next higher level of supervision, as required by both the collective bargaining agreement and the PMM. The Union maintained that, instead, the ratings were first discussed among all rating supervisors and higher-level management, revised and adjusted by this group, and only then presented to the employee. The Union further claimed that the adjustments were made without reference to the employee's actual job performance, but were based on a desired change in the pattern of ratings.

The Activity contended before the Arbitrator that the Union could not file both individual grievances on behalf of some GS-12 auditors and a group grievance on behalf of all GS-12 auditors. The Activity also contended that the procedure that was followed in rating performance was in accordance with a revised version of chapter 17 of the PMM, which pertained to performance appraisal. The Activity likewise contended that the procedure that was followed in rating promotion potential was in accordance with PMM chapter 36, pertaining to merit promotion. The Activity further claimed that the procedure, as it pertained to performance, was also consistent with the original version of PMM chapter 17 before its revision.

III. The Arbitrator's Award

The Arbitrator found the Activity's objection to consideration of both individual grievances and a group grievance to be without merit. He found no basis in the parties' collective bargaining agreement for the Activity's objection and concluded that all four grievances before him were arbitrable.

The Arbitrator also addressed the question of the governing version of PMM chapter 17, pertaining to performance appraisal. The Arbitrator noted that the parties had submitted as a joint exhibit a version of PMM chapter 17. A union representative testified that he had obtained the version from an Activity employee in the office where a copy of the PMM is maintained for use by both the Activity and the Union. The Arbitrator further noted that at the hearing the Activity offered in evidence as its exhibit a later version of chapter 17 without any authentication. The Arbitrator explained that the matter was of considerable concern to him "because the purported later version of Chapter 17 might be read as permitting at least the procedure that was followed by the Employer in the disputed ratings." Award at 19-20. He determined not to accept the Activity's "purported update of Chapter 17 as authentic." Id. at 20. He explained his conclusion as follows:

When one of the parties arrives on the morning of trial with a new version that very materially alters the terms of the parties' joint submission, I need an explanation before I will allow that party to recede from his joint submission. In the case at hand, I have none.

Id. Accordingly, he ruled that the version of PMM chapter 17 that governed the grievances was that received into evidence as the parties' joint exhibit.

On the merits, the Arbitrator sustained the grievances. In agreement with the Union, he found that the Activity held meetings where the grievants' immediate supervisors were required to submit to their superiors for review their proposed ratings of the grievants and other GS-12 employees. According to the Arbitrator, at these meetings, the proposed ratings were discussed among all supervisors and not merely those supervisors who directly supervised and rated the GS-12 employees. The Arbitrator noted that at least some of the proposed ratings were also forwarded to headquarters for further review, discussion, and modification. It was clear to the Arbitrator that these meetings were held before any of the proposed ratings had been shown to or discussed with the employees being rated.

The Arbitrator concluded that both the standards the Activity applied and the procedure it followed in appraising the performance and promotion potential of the identified grievants violated the PMM and the parties' collective bargaining agreement. More specifically, the Arbitrator found that the basis of the ratings departed from the requirements of PMM chapter 17 and were not "fair, equitable, objective and job-related" as required by Article XIX, Section 1(A) of the parties' collective bargaining agreement. Id. at 24 (quoting agreement). The Arbitrator also found that the rating procedure followed by the Activity in the 1988 ratings violated Article XIX, Section 1(D), which set forth the following sequence:

An employee's annual performance appraisal will be prepared by the employee's immediate supervisor and be recorded on DCAA Form 1417.5, "DCAA Performance Planning and Appraisal," (a copy of which will be given to and discussed with the employee). The employee will be given an opportunity to add his comments to the form and will be asked to sign his appraisal. He has three (3) work days in which to do this. The appraisal will then be given to the reviewing official for finalization. If the reviewing official disagrees with the rater, he will complete a new appraisal to replace that made by the immediate supervisor. He will sign this appraisal as a rater. The employee will then be given the opportunity to add any comments to the new appraisal form if he wishes.

He similarly found that the Activity's rating procedure violated PMM chapter 17, which also provided that the performance appraisal would be discussed with the employee before submission to the reviewing official.

The Arbitrator rejected the Activity's contention that the meetings which had been held to discuss the ratings were confined to a general discussion of rating policy. He determined that proposed ratings, both performance and promotion potential, were considered in detail at such meetings and were altered.

As a remedy for the individual grievances, the Arbitrator directed that the Activity reappraise the 1988 performance and promotion potential of the individual grievants in accordance with the collective bargaining agreement and the version of PMM chapter 17 that he found to govern. With respect to the group grievance, the Arbitrator directed that the parties prepare a plan to identify those GS-12 bargaining unit employees who desire their 1988 appraisals to be reopened and their performance and promotion potential to be reappraised.

IV. General Exception to the Award

A. Positions of the Parties

The Activity contends that "[t]he Award is based on a nonfact." Exceptions at 2. However, in its arguments, the Activity does not address this exception.

In its opposition,(*) the Union does not address this exception.

B. Analysis and Conclusions

With no argument provided in support of this exception, we conclude that the Activity fails to establish that the award is based on a nonfact and we deny the exception.

V. Exceptions to the Award As It Pertains to Promotion Potential Appraisals

A. Positions of the Parties

The Activity contends that the award, as it pertains to promotion potential appraisal ratings: (1) violates PMM chapter 36; (2) exceeds the Arbitrator's authority; (3) fails to draw its essence from the collective bargaining agreement; and (4) interferes with management rights under section 7106(a) of the Statute.

The Activity maintains that promotion potential appraisals and performance appraisals are two separate events under two separate chapters of the PMM. The Activity further maintains that the procedures for evaluating promotion potential are contained in PMM chapter 36 and not in the collective bargaining agreement. The Activity states that Article XX, not Article XIX, of the agreement concerns merit promotion and that Article XX "is devoid of any mention of promotion potential appraisals." Exceptions at 3.

The Activity asserts that PMM chapter 36 provides that promotion potential appraisals should reflect the coordinated views of those who supervise the employee and that for GS-12 auditors, such as the grievants in this case, the appraisals will be reviewed and approved by higher-level management. The Activity argues that the process for the 1988 promotion potential appraisal ratings complied with chapter 36 and that the Arbitrator's sustaining of the grievance violates PMM chapter 36 and exceeds the Arbitrator's authority.

The Activity also contends that the award as to the promotion potential ratings is deficient because the Arbitrator never found violations of PMM chapter 36 and his remedy on promotion ratings is based solely on the performance appraisal provisions of Article XIX of the agreement and PMM chapter 17. The Activity maintains that the Arbitrator could not sustain the grievance without finding that the aggrieved action was in violation of the collective bargaining agreement or regulation. The Activity claims that because the Arbitrator failed to make such a finding, the award: (1) does not draw its essence from the collective bargaining agreement; (2) violates agency regulation; and (3) interferes with management's rights.

The Union agrees with the Activity that PMM chapter 36 provides for coordination. However, the Union argues that chapter 36 does not provide for discussions and meetings of the sort that the Arbitrator found had occurred.

The Union disputes the Activity's claim that the parties' collective bargaining agreement does not address promotion potential appraisals. The Union maintains that the enclosure submitted by the Activity to support its exception is the version of Article XX that was implemented more than 3 months after the grievance was filed. As part of its opposition, the Union submitted Article XX of the agreement, dated December 6, 1982, which provides, as follows:

Section 8:

Although procedures for promotion to positions outside the bargaining unit are excluded from this Article, employees have certain rights under Chapter 36 of the DCAA Manual which, for informational purposes, we have agreed to outline here. Employees have the right to have the assessments of their ability to perform at a higher position, as documented on DCAA Form 1436-4 (April 1982) Auditor Promotion Appraisal, discussed with them. They also have a right to make comments and attach them for consideration by the Regional Audit Manager prior to the finalization of the appraisal. Further, a copy of each Auditor Promotion Appraisal prepared will be provided the employee.

The Union also disputes the Activity's claim that the Arbitrator did not find violations of the collective bargaining agreement or regulation.

B. Analysis and Conclusions

We conclude that the Activity fails to establish that the award, as it pertains to promotion potential appraisal ratings, is deficient.

The Arbitrator expressly found as follows:

The fact is, the evidence is ample to establish that both the tests the Employer applied and the procedure it followed in appraising the performance and the promotion potential of the identified grievants violated the collective bargaining agreement and the DCAA Personnel Manual, as well.

Award at 31. Therefore, we reject the Activity's contention that the award is deficient because the Arbitrator failed to find "that the aggrieved action was in violation of the CBA or appropriate regulation." Exceptions at 4. Accordingly, we deny the Activity's exceptions that the award: (1) does not draw its essence from the collective bargaining agreement; (2) violates agency regulation; and (3) interferes with management rights under section 7106(a) because the exceptions are based on the Activity's contention that the Arbitrator failed to find a violation of the collective bargaining agreement or agency regulation with respect to the 1988 promotion potential appraisal ratings.

We also reject the Activity's contention that the process for the 1988 promotion potential appraisal ratings complied with PMM chapter 36. The Arbitrator expressly held that "[i]t is clear beyond question that the Employer's contention that any such meetings were confined to a general discussion of rating policy has no basis in fact; individual proposed ratings, both performance and promotion potential, were considered in detail at such meetings and altered." Award at 24. We are not persuaded that the process and the procedures that the Arbitrator found were followed by the Activity with respect to 1988 promotion potential appraisal ratings were consistent with the coordination and higher-level review process set forth in PMM chapter 36, as claimed by the Activity. The Activity's contention constitutes mere disagreement with the Arbitrator's findings and provides no basis for finding the award deficient. Accordingly, we deny the Activity's exceptions that the award is contrary to PMM chapter 36 and that the Arbitrator exceeded his authority.

VI. Exceptions to the Award As It Pertains to Performance Appraisals

A. Positions of the Parties

The Activity contends that "[c]ompliance with the Award would require the Agency to violate controlling regulation." Exceptions at 2. The Activity also contends that the award is contrary to section 7106(a): (1) by denying management the right to discuss ratings with management officials responsible for managing the awards budget before they are finalized; (2) by denying management the right to determine the methods for evaluating performance; and (3) by precluding a reviewing official from carrying out the assigned duty of review.

The Activity notes that annual performance appraisals are conducted under PMM chapter 17 and Article XIX of the collective bargaining agreement. The Activity maintains that the Arbitrator should have considered the performance appraisal process and procedures as set forth in the revised chapter 17 of the PMM because the revisions reflected the revision in March 1986 of 5 C.F.R. § 430.206(c), pertaining to higher-level review. The Activity states that as a result of the revision, "[r]atings of record may not be communicated to employees prior to approval by the final reviewer." Id. at 5 (quoting 5 C.F.R. § 430.206(c)). The Activity also argues that the new regulations governing performance appraisal procedures "superseded the conflicting provisions of Article XIX of the CBA as of October 19, 1986." Id. at 6.

The Activity explains that the parties' collective bargaining agreement was for a term of 3 years expiring on October 18, 1984, but subject to automatic renewal on a yearly basis. The Activity notes that the agreement has been renewed for 1-year terms commencing on October 19 of each year since 1984. The Activity claims that because the revision of 5 C.F.R. § 430.206(c) was issued in March 1986, these revised procedures superseded the agreement when the agreement renewal term expired on October 18, 1986.

The Union contends that 5 C.F.R. § 430.206(c) cannot be enforced under section 7116(a)(7) of the Statute because the collective bargaining agreement was in effect before the regulation was prescribed. The Union also contends that in view of the automatic renewals of the collective bargaining agreement, 5 C.F.R. § 430.206(c) cannot take effect until negotiated with the Union and there have been no such negotiations.

B. Analysis and Conclusions

We conclude that the award is contrary to 5 C.F.R. § 430.206(c) because the award enforced provisions of the collective bargaining agreement and agency regulation in conflict with the governing provisions of section 430.206(c).

The Arbitrator determined that the Activity had violated Article XIX, Section 1(D) (quoted on page 4, supra) and PMM chapter 17, before revision, by the procedure it followed for the 1988 performance appraisal ratings because employees were not afforded a chance to comment orally and in writing on their immediate supervisor's rating of their performance before the rating was submitted to the reviewing official. However, in 1986, the Office of Personnel Management (OPM) issued final regulations on the performance management system. One of the changes in the system was the process and procedures for higher-level review of performance ratings of record. Since April 10, 1986, 5 C.F.R. § 430.206(c) has provided as follows:

Ratings of record and performance-based personnel actions shall be reviewed and approved by a person(s) at a higher level in the organization than that of the appraising official. Ratings of record may not be communicated to employees prior to approval by the final reviewer. This does not preclude communication about appraisal of performance between a supervisor and an employee prior to the determination of the rating of record. Ratings of record must be approved by the official with the responsibility for managing the performance awards budget within the agency. Agencies may describe exceptions to higher level approval of ratings of record and performance-based personnel actions in their Performance Management Plans.

We agree with the Activity that the procedure provided by Article XIX, Section 1(D) and PMM chapter 17, before revision, conflicts with the procedure provided by section 430.206(c) because that section prescribes that "[r]atings of record may not be communicated to employees prior to approval by the final reviewer." Section 430.206(c) is part of the regulations OPM has prescribed for performance appraisal systems for General Schedule employees to implement and supplement the provisions of 5 U.S.C. §§ 4301-4305. Accordingly, we find that section 430.206(c) is a Government-wide regulation and is binding on Federal agencies. See U.S. Department of the Army, Fort Campbell District, Third Region, Fort Campbell, Kentucky and American Federation of Government Employees, Local 2022, 37 FLRA 186 (1990) (Ft. Campbell); National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 747 (1980). As a Government-wide regulation, section 430.206(c) governs a matter in dispute to which it applies even if the same matter is covered by an agency regulation or a collective bargaining agreement. See Ft. Campbell, 37 FLRA at 193. Consequently, section 430.206(c) governs in relation to any conflicting provisions of PMM chapter 17.

However, as noted by the Union, the only limitation on the supremacy of a Government-wide regulation is set forth in section 7116(a)(7) of the Statute, which makes it an unfair labor practice for an agency "to enforce any rule or regulation (other than a rule or regulation implementing section 2302 of this title) which is in conflict with any applicable collective bargaining agreement if the agreement was in effect before the date the rule or regulation was prescribed." Therefore, under section 7116(a)(7), a Government-wide regulation which does not implement 5 U.S.C. § 2302, pertaining to prohibited personnel practices, is not controlling in relation to a conflicting provision of a collective bargaining agreement that was in effect before the date the regulation was prescribed. Ft. Campbell, 37 FLRA at 193.

We agree with the Union that section 430.206(c) was not controlling in relation to the conflicting provision of Article XIX on April 10, 1986, the effective date of section 430.206(c), because Article XIX, Section 1(D) was in effect before that date as a result of the 1-year renewal of the agreement on October 19, 1985. However, we disagree with the Union that section 430.206(c) has never become effective with regard to this unit of employees because of the repeated automatic renewals of the collective bargaining agreement. Rather, we conclude that Article XIX was controlling until October 18, 1986, but that, effective October 19, 1986, section 430.206(c) controlled.

As stated by the parties, the collective bargaining agreement was automatically renewed for a 1-year term commencing October 19, 1985. Because Article XIX was in effect on April 10, 1986, when section 430.206(c) was prescribed, section 430.206(c) was not then enforceable under section 7116(a)(7) of the Statute because it did not implement 5 U.S.C. § 2302. The 1-year renewal term expired on October 18, 1986, and the agreement was renewed for another 1-year term commencing October 19, 1986. In our view, the automatic 1-year renewal that commenced October 19, 1986, could not preclude the enforcement of section 430.206(c) under section 7116(a)(7). We interpret section 7116(a)(7) to provide that preexisting collective bargaining agreement provisions are to govern for the express term of the collective bargaining agreement of which they are a part, but that provisions of a renewed agreement do not operate to override Government-wide regulations existing on the effective date of the new term of the collective bargaining agreement.

We reach this conclusion on the basis of the status accorded Government-wide regulations. As noted, Government-wide regulations are binding on Federal agencies and Federal officials to which they apply. In addition, under section 7117 of the Statute, Government-wide regulations bar the negotiation of, and agreement on, union proposals that conflict with them. In view of this, we believe that the policies of the Statute are best served by interpreting and applying section 7116(a)(7) narrowly. The policies underlying section 7116(a)(7) of preservation, stability, and certainty of the collective bargaining agreements that exist on the date a Government-wide regulation is prescribed and the policy of the Statute barring negotiations in conflict with Government-wide regulations are all accommodated by preserving the collective bargaining provisions for the express term of the agreement during which the Government-wide regulation was first prescribed, but no longer.

Furthermore, contrary to the argument of the Union, we do not find that the enforceability of Government-wide regulations is dependent on negotiations upon the expiration of the collective bargaining agreement. The enforceability of the Government-wide regulation occurs by operation of law when the agreement expires. Consequently, section 430.206(c) governed resolution of the grievances in relation to the conflicting provisions of Article XIX of the agreement.

Accordingly, we find that the award is deficient because it enforces provisions of the collective bargaining agreement and PMM chapter 17 that conflict with 5 C.F.R. § 430.206(c), a Government-wide regulation that became effective prior to the collective bargaining agreement governing the 1988 ratings. Consequently, we will modify the award to require that the ordered reappraisals be conducted in a manner consistent with 5 C.F.R. § 430.206(c).

Compliance with 5 C.F.R. § 430.206(c) requires that before ratings are finalized they will be approved by a person at a higher level in the organization than that of the appraising official and by the official with the responsibility for managing the performance awards budget within the Agency. Compliance also requires that the method and function of