40:0033(5)NG - - NAGE and DOD, NG Bureau, CT Army and Air NG, Hartford, CT - - 1991 FLRAdec NG - - v40 p33

[ v40 p33 ]
The decision of the Authority follows:

40 FLRA No. 5













April 3, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). It concerns the negotiability of one proposal concerning performance awards.(1) The Agency filed a statement of position. The Union filed a response to the Agency's statement of position.

For the reasons which follow, we conclude that the proposal is inconsistent with a Government-wide regulation. Accordingly, the proposal is nonnegotiable and the petition for review will be dismissed.

II. The Proposal

b. Performance Awards

1. Performance awards will be cash and based on the employee's rating of record.

2. Employees rated superior or excellent will be recognized; fully successful will be recognized with a 1% performance award provided the employee exceeded at least one critical element of the performance plan.

3. The following range of cash performance awards will be issued to unit employees;

a. A fully successful rating that exceeds at least one critical element of the performance plan will receive 1%.

b. An excellent rating will receive from 1 1/2% - 2 1/2 %.

c. A superior rating will receive from 3% - 5%.

III. Positions of the Parties

A. The Agency

The Agency contends that the proposal directly interferes with its rights to determine its budget under section 7106(a)(1) and to determine the numbers and types of employees to be assigned under section 7106(b)(1) of the Statute. In addition, the Agency maintains that the proposal is inconsistent with Government-wide regulations, specifically 5 C.F.R. §§ 430.503(f) and 430.506(a).

With respect to the right to determine its budget, the Agency asserts that, based upon the performance ratings given to bargaining unit employees in 1989, the projected cost of implementing the proposal would be $416,000 or 3.1 percent of the Agency's annual payroll. The Agency argues that "[t]his is a significant and unavoidable employment cost at a time of budget cuts and decreases in governmental services." Statement of Position at 2.

The Agency further argues that the budgetary consequences of the proposal would also result in a direct interference with its right to determine the "number and type of personnel assigned." Id. at 1. In this regard, the Agency reasons that it "is highly likely that assigned performance ratings would cause a significant reallocation of funds to pay [for] the performance awards under the [U]nion's proposal. Such a reallocation could affect funds for fuel, equipment, and/or cause management to limit it's [sic] number and type of hires." Id.

The Agency also contends that the proposal is inconsistent with 5 C.F.R. §§ 430.503(f) and 430.506(a). However, the Agency does not make specific arguments in support of this contention other than to note that Government-wide regulations require that performance awards be paid from appropriated funds.

B. The Union

As a preliminary matter the Union requests that the Authority not consider the Agency's assertions regarding its right to determine its budget and the proposal's alleged inconsistency with 5 C.F.R. §§ 430.503(f) and 430.506(a) because these issues were not previously raised by the Agency in its allegation of nonnegotiability. The Agency declared the proposal nonnegotiable because it "is inconsistent with Government-wide regulation. FPM 451, TPR 451, Chapter 5 and management's budget rights under 5 USC 7106(b)(1)." Petition for Review, Attachment at 1; Response at 1. The Union maintains that the references to section 7106(a)(1) of the Statute and 5 C.F.R. 430 "are an attempt to broaden the [Agency's] position" of nonnegotiability and "constitute an attempt to ignore the conditions governing a review and to give the Agency a 'second bite at the apple.'" Response at 1.

The Union contends that the proposal would not interfere with any of the Agency's rights under section 7106 of the Statute. The Union argues that the Agency has not demonstrated that implementation of the proposal would result in a significant and unavoidable increase in cost. The Union argues further that as the Agency "has the right to establish performance standards and, therefore, control over any criteria that would result in a cash award . . . [the Agency] has ultimate control over its budget and the amount of appropriate [sic] funds allocated to its performance awards system." Id. at 3.

The Union maintains that its proposal is not inconsistent with Government-wide regulation. It argues that nothing in the proposal "exceeds the parameters of the Government-wide regulation, Federal Personnel Manual Chapter 451." Id. at 2. With respect to the Agency's contentions regarding the proposal's inconsistency with 5 C.F.R. §§ 430.503(f) and 430.506(a) the Union argues that "[n]othing in the . . . proposal would prevent the Agency from reviewing performance awards to assure that they fall within the awards budget." Id. at 4. The Union further explains that "the . . . proposals establish a range of percentage of an employee's salary within which the awards must fall. The Agency has the ability to adjust the awards within this range to ensure that the total cost of the awards remain[s] within existing appropriate [sic] funds for that purpose." Id.

IV. Analysis and Conclusions

As a preliminary matter, contrary to the argument of the Union, there is no requirement in the Statute or the Authority's implementing Rules and Regulations that a declaration of nonnegotiability must be made with any particular degree of specificity. Thus, section 7117(c)(1) states:

Except in any case to which subsection (b) of this section applies, if an agency involved in collective bargaining with an exclusive representative alleges that the duty to bargain in good faith does not extend to any matter, the exclusive representative may appeal the allegation to the Authority in accordance with the provisions of this subsection. (Emphasis added.)

Section 2424.4 of the Authority's Rules and Regulations provides that an exclusive representative's petition for review of an agency's allegation that the duty to bargain does not extend to the matter at issue must contain, inter alia, "the agency's allegation in writing that the matter, as proposed, is not within the duty to bargain in good faith . . . [.]" The only requirement that an agency support its allegation of nonnegotiability with specificity and rationale occurs after the agency has been served with a petition for review, at which time the agency has 30 days within which to file a statement of position, specifying its reasons for the allegation.(2) Department of the Interior, National Park Service, Colonial National Historical Park, Yorktown, Virginia, 20 FLRA 537 (1985). Moreover, we note that the Union timely filed a response to the Agency's statement of position and therefore, availed itself of the opportunity to fully address the Agency's additional contentions. Accordingly, we will not, as requested by the Union, limit our consideration of the issues presented in this case.

The Authority recently has issued a number of decisions interpreting and applying applicable regulatory requirements to proposals involving performance awards. As an initial matter, the Authority has determined that the regulations governing performance awards, promulgated by the Office of Personnel Management (OPM) at 5 C.F.R. part 430, are Government-wide regulations within the meaning of section 7117(a)(1) of the Statute. See Tidewater Virginia Federal Employees Metal Trades Council and U.S. Department of the Navy, Norfolk Naval Shipyard, Portsmouth, Virginia, 37 FLRA 938, 950 (1990) (Norfolk Naval Shipyard). The Authority also has determined that performance award proposals that mandate the granting of awards are inconsistent with 5 C.F.R. § 430.503(c)(1) because they prevent the agency from reviewing and approving such awards.(3) As we stated in Norfolk Naval Shipyard, "the expressed authority to review and approve inherently encompasses the authority to review and disapprove." Id. at 950. Consequently, proposals which do not permit disapproval of awards are inconsistent with the regulation and are outside the duty to bargain under section 7117(a)(1) of the Statute. See, for example, International Federation of Professional and Technical Engineers, Local No. 1 and U.S. Department of the Navy, Norfolk Naval Shipyard, 38 FLRA 1589 (1991) (Proposal 2); Association of Civilian Technicians and U.S. Department of Defense, National Guard Bureau, Rhode Island National Guard, Providence, Rhode Island, 38 FLRA 1005 (1990), petition for review filed sub nom. U.S. Department of Defense, National Guard Bureau, Rhode Island National Guard, Providence, Rhode Island v. FLRA, No. 91-1090 (D.C. Cir. Feb. 19, 1991) (Proposal 1); American Federation of Government Employees, Local 1770 and U.S. Department of the Army, Headquarters XVIII Airborne Corps and Fort Bragg, Fort Bragg, North Carolina, 38 FLRA 626 (1990); Norfolk Naval Shipyard.

Turning to the proposal in this case, it is clear, from both the plain language of the provision and the Union's expressed intent, that the provision is designed to mandate the granting of awards. Thus, the proposal requires that employees who receive certain performance ratings will receive a cash award within the prescribed ranges. Further, in explaining the proposal, the Union asserts that the Agency can review performance awards to "assure that they fall within the awards budget" and can "adjust the awards within [the required] range to ensure that the total cost of the awards remain within existing appropriate[d] funds." Response at 4. Neither the proposal nor the Union's explanation of intent allows for the complete disapproval of an individual award. Rather, the Agency would have the ability only to "adjust" the amount of the award so long as it still fell within the prescribed range.

As indicated above, proposals that mandate the granting of a