37:1410(114)AR - - Treasury, IRS, Helena District and NTEU Chapter 42 - - 1990 FLRAdec AR - - v37 p1410



[ v37 p1410 ]
37:1410(114)AR
The decision of the Authority follows:


37 FLRA No. 114

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

HELENA DISTRICT

(Agency)

and

NATIONAL TREASURY EMPLOYEES UNION

CHAPTER 42

(Union)

0-AR-1911

DECISION

October 31, 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 Norman Brand filed by the Agency 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 exceptions.

The Arbitrator found that the Agency discriminated against the grievant on the basis of race and national origin in failing to promote her to a Taxpayer Service Specialist (TSS) position. Accordingly, the Arbitrator ordered the Agency to promote the grievant retroactively and to provide her with backpay.

For the following reasons, we conclude that the Agency's exceptions provide no basis for finding the award deficient. Consequently, we will deny the exceptions.

II. Background and Arbitrator's Award

The grievant is a GS-7 Taxpayer Service Representative (TSR) and is of Japanese descent. On August 10, 1988, the grievant applied for a TSS position requiring a year at GS-7 before being eligible for movement to GS-9. This was the third time the grievant had applied for a TSS position. The grievant's training and experience in three of the critical elements of the TSS position relating to technical tax expertise were "vastly superior to those of any of the other candidates." Arbitrator's Award at 5. The second and third time that the grievant applied for the TSS position, she was ranked "Best Qualified" but was not selected. In both instances, the selecting official was Branch Chief Jerry McGuire.

When the grievant applied for the TSS position for the third time, the ranking panel gave her the highest score on the "Best Qualified" list. Although the TSS position announcement stated that an interview may be required, no interviews were initially scheduled. After the ranking had been done, McGuire asked the grievant's supervisor, Sharon Kedish, to set up interviews. Kedish told the candidates for the TSS position to prepare a 5-minute presentation discussing the critical elements of the TSS position and what they would like most or least about the position. They were also told that they could use visual aids. There were no written instructions and there is no evidence of the extent of Kedish's conversations with the different candidates. Kedish told the grievant that "her job was to 'sell herself' to the panel." Id. at 6.

The interview panel consisted of the selecting official (McGuire), the grievant's supervisor (Kedish), and two other supervisors. There was no formally structured interview process, except that each candidate gave a 5-minute presentation and was then asked one question by the panelists. "The panelists did not discuss the purpose of the interview, what their role in the selection process was, how the answers would be rated, or how they would determine the overall performance of the candidates." Id. Only one of the candidates, Judy Walker, used visual aids in her presentation.

After the candidates concluded their presentations, McGuire told the interview panelists, "'I'm going to call off names, and as I call off a name, if that's the candidate of your choice, raise your hand.'" Id. at 7 (citation to transcript omitted). The first name McGuire called was Judy Walker and everyone raised their hand. The panel discussed, but rejected, further considering another candidate. As a result, Judy Walker, who is Caucasian, was chosen for the TSS position.

The grievant "did not do a good job with her presentation" and, according to the Arbitrator, "it is clear that her presentation ranked in the lower half of those given that day." Id. For example, the grievant read her notes rather than presenting a speech, did not make good eye contact, and reviewed information contained on her Standard Form (SF) 171 rather than addressing the TSS position requirements directly. After the interview, Kedish told the grievant that "she failed to 'sell herself.'" Id.

The grievant filed a grievance alleging that the Agency discriminated against her, in violation of the parties' agreement, by failing to select her for the TSS position. During the grievance process, selecting official McGuire stated to the grievant's Union representative that "'even if [the grievant] had excelled in the interview, aced the interview' he would not have selected her based on his own knowledge of what her performance was . . . ." Id. at 7-8 (citation to transcript omitted). Although at the arbitration hearing McGuire asserted that he did not recall making this statement, the Arbitrator credited the Union representative's version of McGuire's statement. Id. at 8.

After the matter at issue was grieved, both McGuire and Kedish "stressed that the most important of the six critical elements in the TSS job description was 'Public Appearance'" because "[t]his particular TSS job, they said, would require the incumbent to travel the state making speeches to large taxpayer groups, represent the Service, and possibly appear on television." Id. According to the Arbitrator, in the year after Judy Walker was selected for the TSS position, she "did not make a single public appearance." Id. at 9. Speaking engagements were handled by TSR's, people from other functions, or the coordinator of taxpayer education.

In that year, the grievant attended "Toastmasters" to improve her presentation skills, while Walker attended basic tax law training "to qualify her in the three technical areas that are critical elements for the TSS position." Id. Walker, as well as many TSR's, relies on the grievant's expertise in answering questions about difficult taxpayer problems because "Walker simply [does] not know enough to provide help to TSRs." Id. at 9 n.2.

The parties exhausted the grievance procedure without resolving the dispute and the matter was submitted to arbitration. The parties stipulated the following issue before the Arbitrator:

Was [the grievant] discriminated against on the basis of race and national origin in the promotion process which led to her not being selected for the TSS position on 7 October [1988] by manager, Sharon Kedish, and Branch Chief, Jerry McGuire?

If so, what should be the remedy?

Arbitrator's Award at 3 (footnote omitted).

The Arbitrator found that "the parties agree[d] upon the three step analysis to be applied in determining whether [the] [g]rievant has shown she was discriminated against during the promotion process which led to her non-selection for the TSS position." Id. at 10. Using the test formulated by the U.S. Supreme Court in cases such as McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-04 (1973) (McDonnell Douglas), the Arbitrator stated that: (1) "the grievant bears the burden of establishing a prima facie case" of discrimination; (2) if the grievant establishes a prima facie case, the Agency "must articulate a legitimate, non-discriminatory reason for the employment action"; and (3) if the Agency articulates such a reason, the grievant "has the burden of persuading the trier of fact that the articulated reason is pretextual, or that it is more likely that a discriminatory reason motivated the decision maker." Arbitrator's Award at 10.

Applying the above test to this case, the Arbitrator found that "the parties agree that [the] [g]rievant has established a prima facie case." Id. The Arbitrator noted that the grievant "is a member of a protected class, she was qualified for the position of TSS by virtue of being ranked number one on the 'Best Qualified' list, and despite her qualifications the Service selected a Caucasian female." Id.

As to the second part of the test, the Arbitrator found that the Agency "has articulated a legitimate, non-discriminatory reason for selecting Walker over [the] [g]rievant." Id. at 11. The Arbitrator noted that, according to the Agency, "this particular position was specifically intended to 'specialize' in representing the [Agency] in public appearances." Id. In this regard, the Arbitrator noted the Agency's assertion that Walker was more qualified for the TSS position because the TSS position "has an additional critical element of 'Public Appearance' which requires making presentations on tax matters to groups of taxpayers" and, therefore, "the qualifications of the person selected would have to include superior speech making abilities." Id.

As to the third part of the test, the Arbitrator found that the grievant "has demonstrated that the articulated reason was pre-textual." Id. The Arbitrator evaluated the actions of selecting official McGuire and supervisor Kedish and found that: (1) "both knew [the] [g]rievant's strengths and weaknesses"; (2) "McGuire never had any intention of selecting [the] [g]rievant for the TSS position"; (3) "McGuire was the selecting official in three other instances when [the] [g]rievant was not selected for a promotional position" and that, in one instance "McGuire did not fill the position[,]" while "[i]n the other instances, McGuire filled the positions with Caucasians"; and (4) there "is credible evidence that [McGuire] would not have selected [the] [g]rievant even if she had done an excellent job on her presentation." Id. at 12. Based on these findings, the Arbitrator concluded that "the selecting official and [the] [g]rievant's supervisor designed a selection process and 'specialization' for the TSS position which would lend an air of legitimacy to the discrimination against [the] [g]rievant on the basis of her race and national origin." Id. at 11-12.

The Arbitrator also evaluated the timing and content of the interview and found that: (1) "the interview was not conducted in accordance with the FPM [Federal Personnel Manual] procedures that are required when an interview is part of the ranking"; (2) "[t]he timing of the interview is suspect" because "McGuire did not decide to hold an interview until after it was clear that [the] [g]rievant was . . . first on the 'Best Qualified' list; (3) "neither the candidates nor the panelists were given very much notice of the interview"; (4) "[s]ince there were no written instructions for the presentation[,]. . . it is impossible to know whether all of the candidates were given the same instructions and advice"; (5) "there was no agreement by the panelists as to how ratings would be done . . . . [and] [e]ach was free to use personal criteria"; (6) "no notes were kept" so that it is "impossible to reconstruct the process to see if it was fair"; and (7) although McGuire asserted that the interview was simply "advisory," "McGuire dominated the interview" and "had to be forced to consider other candidates after he suggested--and voted for--Walker." Id. at 13, 15 (footnote omitted).

The Arbitrator further noted that the "format of the interview was likely to discriminate against [the] [g]rievant" because candidates "were not asked to make presentations on some aspect of tax law or taxpayer concern[,]" but "were told to try to 'sell' themselves to the panel[.]" Id. at 13, 14. The Arbitrator found that this put the grievant at a disadvantage because "it made her superior knowledge of tax law, IRS regulations, and taxpayer procedures irrelevant" and "it placed a premium on making oneself acceptable to a group" and, in this case, "the group and all of the other candidates [except the grievant] are Caucasian." Id. at 14. The Arbitrator concluded that "the interview was conducted more as a popularity contest than a serious method for selecting the candidate most likely to do the best job as a TSS." Id. (footnote omitted).

After finding that Walker gave a better presentation than the grievant, the Arbitrator examined the weight put on the presentation. The Arbitrator noted that McGuire and Kedish consistently maintained that "the ability to make presentations was the deciding factor because this particular TSS position was 'earmarked' for public appearances" and that "[t]he incumbent was to 'specialize' in appearing on behalf of the Service." Id. at 15. However, the Arbitrator found that the "evidence shows . . . that in the year after her selection[,] Walker did not give a single speech" and, therefore, what "was supposed to be the defining aspect of the job, the critical element which led to [the] [g]rievant's non-selection, was not any part of the job for the first year after [the] [g]rievant was non-selected." Id. at 16.

For all of the foregoing reasons, the Arbitrator concluded that the "interview was a sham" and that the articulated reason that the grievant was not selected for the TSS position was "not the true reason." Id. (emphasis in original). Rather, the Arbitrator found that "McGuire failed to select [the] [g]rievant for the TSS job because of her race and national origin" and that "[n]o matter how [the] [g]rievant had done in the interview . . . McGuire would not have selected her." Id. The Arbitrator concluded that, in the absence of discrimination, the grievant would have been awarded the TSS position in October 1988 and, therefore, awarded the grievant a retroactive promotion with backpay.

III. Positions of the Parties

A. Agency's Exceptions

The Agency contends that the Arbitrator's award is contrary to law because of its "lack of any factual or legal conclusion that links the grievant's race and national origin to the actions giving rise to her non-selection." Agency's Exceptions at 7. Citing to several Federal court cases, the Agency argues that the case law "makes clear that proof of an impermissible, discriminatory motive is a necessary element of a disparate treatment case[.]" Id. According to the Agency, the "proof must establish, 'by a preponderance of the evidence that the Defendant intentionally failed to promote [the grievant] because she was [Japanese], not that it failed to promote her and she was [Japanese].'" Id., quoting Autry v. North Carolina Department of Human Resources, 641 F. Supp. 1492, 1499 (D.N.C. 1986) (Autry), affirmed, 820 F.2d 1384 (4th Cir. 1987) (emphasis by court). Therefore, the Agency argues that "the evidence must show that the employer's proffered reason is not just a pretext, but a pretext for discrimination." Id., citing Johnson v. University of Wisconsin-Milwaukee, 783 F.2d 59, 64 (7th Cir. 1986) (Johnson) and Douglas v. Anderson, 656 F.2d 528, 534 (9th Cir. 1981) (Douglas) (emphasis in original).

Applying that reasoning to this case, the Agency asserts that the Arbitrator's award "makes no findings, either of fact or of law, which demonstrate a causal connection between his conclusion that the [A]gency's articulated reasons for not selecting the grievant were pretextual, and the grievant's race and national origin." Id. at 7-8.

While the Agency acknowledges that "disagreement with an arbitrator's evaluation of evidence does not provide a basis for the Authority's finding the award deficient[,]" the Agency contends that the Arbitrator "did not indicate any evidence was presented or relied on to show that [the grievant's] Japanese ancestry was in any way what motivated [the Agency's] actions" and, instead, "summarily concluded that [A]gency actions and decisions in this case were racially motivated[.]" Id. at 6, 8-9. The Agency states that there must be sufficient evidence to support a finding of intentional discrimination and notes that a "demonstration that the employer has offered a spurious explanation is strong evidence of discriminatory intent, but it does not compel such an inference as a matter of law." Id. at 9, quoting Benzies v. Illinois Department of Mental Health and Developmental Disabilities, 810 F.2d 146, 148 (7th Cir. 1987), cert. denied, 483 U.S. 1006 (1987).

The Agency contends that even if it violated the parties' agreement by failing to select the grievant, "the contractual remedy would be priority consideration[,]" unless the alleged motive for the Agency's actions was the grievant's protected status under equal employment opportunity laws. Id. at 9. As the Arbitrator "offered no hint . . . as to the factual basis to support his conclusory finding that the grievant's race or national origin motivated the agency's actions[,]" the Agency concludes that the Arbitrator's "award of retroactive promotion and back pay is contrary to law." Id. at 9-10.

B. Union's Opposition

The Union contends that the "Agency's exceptions are merely a disagreement with the Arbitrator's interpretation and application of the parties' collective bargaining agreement" and constitute an "attempt to relitigate its disagreement with the Arbitrator's factual determinations made from the record." Union's Opposition at 6, 7.

The Union argues that the Agency has not shown that the award is based on "a gross mistake of fact" because the Agency has not proven that "but for the misapprehension, the Arbitrator would have reached a different result[.]" Id. at 8. Contrary to the Agency's assertion, the Union argues that the causal connection between the grievant's non-selection for the TSS position and discrimination based on race and national origin is clear. Id. at 9. In this regard, the Union notes that the Arbitrator found that: (1) the selecting official "had repeatedly discriminated against the [g]rievant"; (2) there was credible evidence that the selecting official would not have selected the grievant even if she had done an excellent job on her presentation; and (3) "the [g]rievant's non-selection was motivated by racial animus." Id. at 8, 9. Accordingly, the Union contends that "no 'mistake of fact' has been identified by the Agency" and that the Agency "only attacks [the Arbitrator's] facts to attack his conclusion" that, in the absence of discrimination, the grievant would have been selected for the TSS position. Id. at 9, 10.

The Union also argues that the Agency has not shown that the award is contrary to law. The Union asserts that the Arbitrator's "application of the McDonnell-Douglas analytical framework is well-reasoned and supported by case law" and that "[b]oth parties agreed that such an analysis should be applied in this case." Id. at 10. According to the Union, the "facts the Agency seeks which 'pertain[] to a correlation between the grievant's race or national origin and the actions taken by agency management' were taken directly from the record." Id. at 12, quoting Agency's Exceptions at 8. Specifically, the Union notes that the Arbitrator found that: (1) "the [g]rievant had established a prima facie case of discrimination"; (2) "the selecting official raised one small aspect of the position at issue to the sine qua non for the job, to the prejudice of the [g]rievant"; (3) the Agency's violations of FPM procedures for conducting interviews "impermissibly disadvantaged the [g]rievant vis a vis the Caucasian selectee"; (4) the selecting official lacked credibility and had engaged in a "past practice of selecting Caucasians over the [g]rievant, despite her qualifications for the job"; and (5) "the Agency's overemphasis on public speaking abilities was greatly exaggerated" because "the selectee had not made a single public speaking appearance during the year following her selection." Id. at 11, 12. Accordingly, the Union argues that "the Agency's claim that the Arbitrator's decision is factually and legally improper has absolutely no foundation." Id. at 12.

The Union cites to a similar case where a Federal employee was denied a promotion and a court "found that the agency's articulated reason was pretextual after analyzing the interview itself and finding that the employee [plaintiff] was more qualified than the selectee." Id. at 13, citing Zambrano v. Block, 583 F. Supp. 1568 (D. Colo. 1984).

The Union notes the cases cited by the Agency and states that the "one element these cases have in common is that each of the Plaintiffs failed to establish that the articulated explanation was pretextual." Id. The Union contends that those cases "involved separate, unique factual and credibility issues" and are distinguishable from this case because, "as the Arbitrator correctly found, [t]he [g]rievant presented overwhelming evidence that the non-selection was due to discrimination based on race and national origin, thereby disproving the Agency's claim that the non-selection was based on the interview." Id. at 14.

In evaluating the Agency's arguments, the Union states that "[w]hat the Agency seems to complain of here is a lack of direct evidence of discrimination." Id. (emphasis in original). However, the Union argues that "direct evidence of discriminatory intent, such as an admission to this effect rarely, if ever, exists" and that in "a correct application of the McDonnell-Douglas factors, that is not necessary." Id. To support this assertion, the Union cites United States Postal Service Board of Governors v. Aikens, 460 U.S. 711, 714-16 (1983) where, according to the Union, the U.S. Supreme Court found that the district court "erred by requiring the plaintiff to submit direct evidence of discriminatory intent." Id. at 15 (emphasis in original).

IV. Analysis and Conclusions

For the following reasons, we conclude that the Agency's exceptions provide no basis for finding the award deficient.

A. The Award Is Not Contrary to Law

The Arbitrator applied the 3-part test formulated by the U.S. Supreme Court in cases such as McDonnell Douglas to determine whether the Agency discriminated against the grievant based on her race or national origin when it failed to select her for the TSS position. In this regard, the Arbitrator found that: (1) "the parties agree that [the] [g]rievant has established a prima facie case"; (2) the Agency articulated a legitimate, non-discriminatory reason for failing to promote the grievant; and (3) the grievant established that the Agency's articulated reason was pretextual. Arbitrator's Award at 10, 11.

The Agency does not except to the Arbitrator's finding that the McDonnell Douglas test applies to this case. The Agency also does not except to the Arbitrator's finding that "the parties agree that [the] [g]rievant has established a prima facie case." Arbitrator's Award at 10. Rather, the Agency contends that the Arbitrator's award is contrary to law because of its "lack of any factual or legal conclusion that links the grievant's race and national origin to the actions giving rise to her non-selection." Agency's Exceptions at 7. Citing several Federal court decisions, the Agency argues that, with respect to the third part of the McDonnell Douglas test, the Arbitrator's award "makes no findings, either of fact or of law, which demonstrate a causal connection between his conclusion that the [A]gency's articulated reasons for not selecting the grievant were pretextual, and the grievant's race and national origin." Id. at 7-8.

As noted previously, the Arbitrator evaluated the actions of the Agency officials involved in the selection process as well as the format, timing, and content of the interview and concluded that "the selecting official and [the] [g]rievant's supervisor designed a selection process and 'specialization' for the TSS position which would lend an air of legitimacy to the discrimination against [the] [g]rievant on the basis of her race and national origin." Arbitrator's Award at 11-12. Specifically, the Arbitrator found that the "format of the interview was likely to discriminate against [the] [g]rievant" because candidates "were not asked to make presentations on some aspect of tax law or taxpayer concern[,]" but "were told to try to 'sell' themselves to the panel[.]" Id. at 13, 14. The Arbitrator noted that this put the grievant at a disadvantage because "it made her superior knowledge of tax law, IRS regulations, and taxpayer procedures irrelevant" and "it placed a premium on making oneself acceptable to a group" and, in this case, "the group and all of the other candidates [except the grievant] are Caucasian." Id. at 14.

The Arbitrator also noted that: (1) "McGuire was the selecting official in three other instances when [the] [g]rievant was not selected for a promotional position" and that, in one instance "McGuire did not fill the position[,]" while "[i]n the other instances, McGuire filled the positions with Caucasians"; and (2) there "is credible evidence that [McGuire] would not have selected [the] [g]rievant even if she had done an excellent job on her presentation." Id. at 12.

Moreover, under McDonnell Douglas and its progeny, a discriminatory motive is established when the employee establishes a prima facie case, specifically, when the employee shows that: (1) the employee is a member of a protected class, (2) the employee was qualified for the position, and (3) someone of equal or lesser qualifications who is not a member of the class is selected for the position instead. In this case, the Arbitrator found that the grievant "is a member of a protected class, she was qualified for the position of TSS by virtue of being ranked number one on the 'Best Qualified' list, and despite her qualifications the Service selected a Caucasian female." Arbitrator's Award at 10.

Accordingly, we reject the Agency's contention that the Arbitrator "did not indicate any evidence was presented or relied on to show that [the grievant's] Japanese ancestry was in any way what motivated [the Agency's] actions." Agency's Exceptions at 8. Instead, we find that this contention constitutes nothing more than disagreement with the Arbitrator's findings of fact and evaluation of the evidence and provides no basis for finding the award deficient. See, for example, Federal Deposit Insurance Corporation and National Treasury Employees Union, 35 FLRA 241, 247-48 (1990) (FDIC); and U.S. Department of Labor, OIPA and American Federation of Government Employees, AFL-CIO, Local 12, 27 FLRA 109, 110-11 (1987) (U.S. Department of Labor).

In reaching his conclusion, the Arbitrator also examined the timing and content of the interview, and found, in part, that: (1) the interview was not conducted in accordance with the FPM procedures; (2) the timing of the interview was "suspect" because the selecting official did not decide to hold an interview until after it was clear that the grievant was first on the "Best Qualified" list; (3) "neither the candidates nor the panelists were given very much notice of the interview"; (4) because there were no written instructions for the interview, it is impossible to know whether all of the candidates were given the same instructions and advice; (5) panelists did not agree on how ratings would be done; (6) "no notes were kept"; and (7) the selecting official "dominated the interview[.]" Id. at 13, 15 (footnote omitted).

As the Arbitrator relied on evidence in the record to conclude that the Agency had discriminated against the grievant, we reject the Agency's assertion that the Arbitrator "summarily concluded that [A]gency actions and decisions in this case were racially motivated[.]" Agency's Exceptions at 8-9. Rather, we find that the Agency is only disagreeing with the Arbitrator's reasoning and conclusions. See U.S. Department of Labor.

This case is distinguishable from the Federal court cases cited by the Agency because, unlike Autry, the parties in this case do not dispute that the grievant established a prima facie case of discrimination and, unlike Johnson and Douglas, the Arbitrator found that the Agency's articulated reason for its action against the grievant was not just a pretext, but a pretext for discrimination. See Arbitrator's Award at 11-12.

Accordingly, we conclude that the Agency's exceptions fail to show that the award is contrary to law.

B. The Award Is Not Contrary to the Back Pay Act

The Agency also contends that the Arbitrator "offered no hint . . . as to the factual basis to support his conclusory finding that the grievant's race or national origin motivated the agency's actions[,]" and, therefore, the Arbitrator's "award of retroactive promotion and back pay is contrary to law." Agency's Exceptions at 9-10.

In order for an award of backpay to be authorized under the Back Pay Act, 5 U.S.C. &se