40:0425(41)NG - - DOD Office of Dependents Schools and Overseas Education Association - - 1991 FLRAdec NG - - v40 p425
[ v40 p425 ]
The decision of the Authority follows:
40 FLRA No. 41
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)(D) and (E) of the Federal Service Labor-Management Relations Statute (the Statute). The appeal concerns the negotiability of three proposals that concern granting living quarters allowances (LQA) and transportation expenses to certain overseas teachers.
Proposal 1 would require a waiver of subsection 031.12b of the Department of State Standardized Regulations (DSSRs) when a bargaining unit employee, who is not otherwise receiving an LQA, completes five consecutive years of service with the Agency. For the reasons that follow, we find that Proposal 1 is not negotiable because it is inconsistent with the DSSRs, which are Government-wide regulations.
Proposal 2 would allow any bargaining unit employee to apply for other bargaining unit positions through the Agency's CONUS (Continental United States) recruitment program. Further, under Proposal 2, an employee who maintains a bona fide legal residence in the United States would be considered an "employee recruited in the United States" for purposes of eligibility for an LQA; such employees would have their legal residence considered their "place of actual residence" for purposes of transportation expenses. For the reasons that follow, we find that Proposal 2 is not negotiable because it is inconsistent with Government-wide regulations, the DSSRs, insofar as it concerns LQAs and is inconsistent with law, 5 U.S.C. °° 5722 and 5724, insofar as it concerns transportation expenses.
Proposal 3 concerns eligibility for an LQA and specifies circumstances under which subsection 032.12b of the DSSRs will be waived. For the reasons that follow, we reject the Agency's contentions that Proposal 3 is inconsistent with management's right to determine its budget, the DSSRs and an agency regulation for which a compelling need exists. We find that Proposal 3 is negotiable.
This case concerns some of the allowances and transportation expenses for which employees assigned to overseas posts of duty may be eligible. Historically, in determining eligibility for payment of various allowances and transportation expenses, the Agency has distinguished between "local hires," i.e. employees hired overseas, and "stateside hires," i.e. employees recruited and hired from the United States. See, for example, Acker v. United States, 620 F.2d 802 (Ct. Cl. 1980) (Acker I) and Acker v. United States, 6 Cl. Ct. 503 (1984) (Acker II). The former group is generally considered ineligible for many of the payments that are authorized for employees serving in overseas posts of duty, while the latter group is generally considered eligible for those payments. This distinction and the resulting denial of payments to local hires has
contributed to many disputes between the parties to this case. See, for example, U.S. Department of Defense Dependent Schools and Overseas Education Association, 37 FLRA 226 (1990), petition for review filed sub nom. Mary E. Hartmann, et al. v. FLRA, No. 90-2699 (D.D.C. Oct. 31, 1990); Overseas Education Association and U.S. Department of Defense Dependent Schools, 37 FLRA 216 (1990); Department of Defense Dependents Schools, Pacific Region and Overseas Education Association, Pacific Region, 30 FLRA 1206 (1988); Overseas Education Association, Inc. and Department of Defense, Office of Dependents Schools, 27 FLRA 492 (1987), aff'd sub nom. Overseas Education Association v. FLRA, 858 F.2d 769 (D.C. Cir. 1988) (OEA).
III. Proposal 1
Subsection 031.12b of the DSSR will be waived when a unit employee, not otherwise receiving a living quarters allowance (LQA), completes five years of consecutive DODDS service in an overseas area. From that time on, an otherwise eligible unit employee who is a United States citizen will receive a quarters allowance.
A. Positions of the Parties
The Agency argues that Proposal 1 is nonnegotiable because it is inconsistent with a Government-wide regulation, specifically, section 031.12 of the DSSRs, which governs the circumstances under which a local hire may be granted an LQA. The Agency contends that under the DSSRs the agency head is granted "the right to determine whether an individual circumstance is unusual and warrants a waiver" of the requirements of subsection 031.12b. Statement of Position at 3. The Agency asserts that to allow a "blanket waiver," which it maintains Proposal 1 seeks, is inconsistent with the DSSRs. Id. Additionally, the Agency cites the decisions in Acker I and Acker II in support of its contention that a proposal to allow a local hire eligibility for an LQA based solely on longevity is inconsistent with law or Government-wide regulation. The Agency asserts that in Acker II the court relied on Acker I to reject a claim by local hires that they were entitled to an LQA based on longevity.
The Agency asserts that Proposal 1 would deprive the Agency head of the right to make determinations as to
eligibility for an LQA and would subject the Agency head's discretion to arbitral review. The Agency states that in the event that the Authority determines that Proposal 1 concerns a permissive subject of bargaining under section 7106(b) of the Statute, it elects not to bargain.
The Union states that while section 031.12 of the DSSRs limits the eligibility of local hires for an LQA, that section also provides that requirements set forth in subsection 031.12b may "be waived by the head of the agency upon determination that unusual circumstances in an individual case justify such action." Petition for Review at 3. According to the Union, the intent of Proposal 1 is to require the agency head to exercise the authority to waive subsection 031.12b in cases where a local hire has remained in the Agency's employ for five continuous years. In support of its proposal, the Union contends that the Agency has provided for a number of "blanket" waivers of subsection 031.12b through an agency regulation, DoD Directive 1400.25M (Chapter 592, Civilian Personnel Manual, ° 2-2(b)(3)). Union reply brief at 1. The Union asserts that Proposal 1 is negotiable because it concerns a matter affecting working conditions that is within the Agency's discretion.
B. Analysis and Conclusions
Under 20 U.S.C. ° 905, overseas teachers are entitled to quarters or a quarters allowance under regulations prescribed by or under authority of the President. The Authority has previously found that those regulations, which are included in the DSSRs, constitute Government-wide regulations within the meaning of section 7117 of the Statute. See Overseas Education Association, Inc. and Department of Defense, Office of Dependents Schools, 22 FLRA 351, 354-56 (1986), aff'd sub nom. Overseas Education Association, Inc. v. FLRA, 827 F.2d 814 (D.C. Cir. 1987). It follows that a proposal that is inconsistent with the DSSRs is outside the Agency's duty to bargain pursuant to section 7117(a) of the Statute.
Section 031.1 of the DSSRs governs employee eligibility for an LQA. That section distinguishes between employees recruited in the United States and those recruited outside the United States with respect to the
conditions under which they are eligible for an LQA. Employees recruited in the United States are generally eligible for an LQA. Employees recruited outside the U.S. are eligible only if they meet certain conditions. Essentially, their residence overseas must be "fairly attributable" to their employment with the U.S. Government and prior to that appointment they must have been recruited in the United States by one of the employers specified in subsection b of 031.12. DSSRs ° 031.12a and b. To meet the second condition, their employment with that employer must have been "substantially continuous" and under circumstances that provided for return transportation to the geographical areas specified in subsection b. Id. This second condition may be waived by the head of the agency "upon determination that unusual circumstances in an individual case justify such action." Id. An alternative to the second condition is created if, as a condition of employment, the employee was required by the agency to move to another area. DSSRs ° 031.12c.
Proposal 1, in essence, seeks to establish that five years of continuous service with the Agency in an overseas area constitutes an "unusual circumstance" that justifies the waiver of subsection 031.12b in individual cases. In our view, however, longevity of employment, standing alone, is not an unusual circumstance. In reaching this conclusion we are guided by the provisions of the DSSRs themselves, the intent of the statutes that the DSSRs implement, and court decisions addressing the DSSRs and those statutes.
As was discussed by the United States Court of Claims in Acker I, the distinction between employees based on their point of hire for purposes of eligibility for an LQA, which is embodied in the DSSRs, is consistent with the legislative history underlying the laws governing the payment of LQAs. The court concluded that the legislative history of the Overseas Teachers Pay and Personnel Practices Act showed that Congress intended for the teachers to receive the allowances and differentials provided in that Act equal to those granted to other civilian employees. 620 F.2d
at 804-05. Turning to the law that governs overseas allowances and differentials for other civilian employees, the Overseas Differentials and Allowances Act, the court concluded that the goal of that legislation "was to compensate civilian employees for extra costs and hardships which they encountered due to their assignment abroad." Id. at 806. The court further noted that "teachers hired overseas voluntarily encountered any hardships and extra costs incident to their employment. Thus, they are unlike stateside hires who must be enticed overseas and compensated for their assignment to foreign posts." Id. The court determined that "the benefits are designed to give something extra to employees who must go overseas. There is no indication that Congress intended to grant people already in those foreign areas extra compensation to give them living situations as though they had come from the United States." Id. The court concluded that the distinction in the DSSRs as to employees' eligibility for an LQA based on their point of hire was entirely consonant with the spirit of the Overseas Differentials and Allowances Act and the Overseas Teachers Pay and Personnel Practices Act. Id. at 804.
In Acker II the United States Claims Court addressed a claim that in view of existing provisions contained in Department of Defense regulations that allowed exceptions to the denial of LQA to local hires, a similar exception should be made based on longevity of employment. The existing exceptions applied to local hires in circumstances where a spouse receiving an LQA died or departed the area permanently, a change in work location made daily commuting to a common domicile unreasonable, or there was a divorce or legal separation. 6 Cl. Ct. at 509. The court found that "these regulatory exceptions cover unusual circumstances, including those in which a sponsoring spouse is no longer available. The local hire is given a living quarters allowance . . . to make up for the benefits lost through circumstances beyond his or her control." Id. However, the court stated "merely teaching for more than a year or two is not a circumstance analogous to those[.]" Id. at 510.
The DSSRs generally limit eligibility for LQAs to employees who leave the United States and go overseas as a result of their employment or who must move from one overseas post to another as a condition of their employment. As found by the court, this limitation is consistent with the intent of the laws that authorize the payment of LQAs. That is, they distinguish between employees whose choice to live overseas is personal and/or voluntary and those whose choice is attributable to their employment. In our view, a proposal to waive subsection
031.12b of the DSSRs based solely on longevity of employment is not consistent with the intent of the DSSRs or the laws that the DSSRs implement. Longevity alone affords no consideration of the role that employment played in enticing the employee to leave the United States and live overseas. Additionally, the Union does not demonstrate, and it is not apparent to us, that longevity of employment, standing alone, is anything exceptional or uncommon. In our view, longevity of employment is a fairly routine circumstance that is facially incompatible or irreconcilable with the standard of "unusual" that would permit a waiver of subsection 031.12b.
Based on the foregoing, we conclude that Proposal 1 is inconsistent with section 031.1 of the DSSRs, a Government-wide regulation, and is, for that reason, nonnegotiable. See American Federation of Government Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance Corporation, Madison Region, 21 FLRA 870 (1986) (FDIC, Madison Region) (Proposal 15, which allowed 8 days of official time to be used at the employee's discretion, was inconsistent with a Federal Personnel Manual provision giving agency heads discretion to grant employees administrative leave for brief periods of time). In view of our decision, we do not address the other arguments that the parties have raised with respect to the negotiability of Proposal 1.
IV. Proposal 2
Any unit employee may apply and be considered for selection to another unit employee position through the DODDS CONUS recruitment program. Unit employees selected for other positions in
the bargaining unit shall be considered an "employee recruited in the United States" under DSSR Section 031[.]11 provided they maintain a bona fide legal residence within the United States, the Commonwealth of Puerto Rico, or the possessions of the United States at the time of application. The unit employee's CONUS residence shall be considered the Unit Employee's point of hire, and he/she shall be entitled to negotiate a transportation agreement to and from that point of hire after selection through the DODDS CONUS recruitment program. A Unit Employee selected in this manner shall, nonetheless, be entitled to constructive travel from his/her current location to the new duty station, up to the cost of transporting the Unit Employee, dependents and household goods from his/her home of record to the new duty station.
Unit Employees shall not be involuntarily reassigned or disciplined under this Agreement until all grievances and/or equal employment opportunity complaints disputing the reassignment or disciplinary action are resolved by the
A. Positions of the Parties
The Agency describes the CONUS recruitment program as a procedure for hiring individuals who are not currently employed by the Agency and who reside in the U.S., Puerto Rico, or the possessions of the U.S. The Agency asserts that, insofar as Proposal 2 would extend eligibility for an LQA to local hires based on maintenance of a legal residence in the U.S., Puerto Rico, or the possessions of the U.S., it is inconsistent with section 031.11 of the DSSRs, a Government-wide regulation. The Agency further asserts that insofar as Proposal 2 would require that an employee's legal residence be considered his/her "place of actual residence" for purposes of travel and transportation expenses, it conflicts with 5 U.S.C. °° 5722 and 5724. For these reasons the Agency contends that the first paragraph of Proposal 2 is not negotiable. The Agency states that the second paragraph was not declared nonnegotiable; however "the arbitrator" refused to include stays of actions in other areas in "the Agreement." Statement of Position at 6.
The Union describes Proposal 2 as affording bargaining unit employees "who have an actual place of residence" within the United States to apply for positions in the
bargaining unit other than the ones they currently encumber and, if selected, to be treated as if they had been recruited in the United States for purposes of eligibility for an LQA. Reply Brief at 2. Similarly, their transportation entitlements would be based on their "actual residence within the United States." Id.
B. Analysis and Conclusions
1.Eligibility for LQAs
As discussed above in conjunction with Proposal 1, the DSSRs distinguish between employees recruited in the United States and those recruited outside the United States insofar as their eligibility for an LQA is concerned. This proposal would allow local hires who maintain a bona fide legal residence in the U.S., Puerto Rico, or possessions of the U.S. applying for other positions in the bargaining unit through the Agency's CONUS recruitment program to be considered employees recruited in the United States for purposes of section 031.1 of the DSSRs. As a result, any of these local hires selected for another position in the bargaining unit would have their eligibility for LQAs governed by section 031.11 of the DSSRs rather than section 031.12.
Under Proposal 2 an employee who is actually residing overseas and who applies for a position through the Agency's CONUS recruitment program would qualify as an "employee recruited in the United States" for purposes of section 031.1 of the DSSRs, if he/she maintains a "stateside" legal residence. In our view, such an interpretation of section 031.1 is strained. Rather, "employees recruited in the United States," as contrasted with "employees recruited outside the United States," more naturally refers to the location of the employee when he/she is recruited for a position overseas. Such an interpretation is more consistent with the intent of the laws that section 031.1 of the DSSRs implements than that required by Proposal 2. As we discussed in conjunction with Proposal 1, the laws providing for LQAs are intended to compensate employees who are enticed overseas in conjunction with Government employment rather than to grant extra compensation to employees already in a foreign area. See Acker I, 620 F.2d at 806. To allow an employee who is actually outside the United States when recruited to be treated as an "employee recruited in the United States," based only on the facts that he/she maintains a legal residence in the U.S., Puerto Rico or a possession of the U.S. and his/her application has been processed through a particular recruitment program
would substantially undercut the limitations on eligibility for LQAs that section 031.12 on its face seeks to enforce. Therefore, the proposal would operate to deprive that section of meaning.
There is no indication that section 031.1 has a meaning other than that which most naturally flows from it. That is, whether an employee is deemed to be recruited in the United States or outside the United States is dependent on the location of the employee when recruited, not on the existence of a legal residence at some place other than where the employee is actually located at that time. See, for example, Comp. Gen. No. B-195743 (unpublished) (Sept. 17, 1979) (employee who was recruited for a position in Viet Nam after he had arrived in Viet Nam was not recruited in the United States for purposes of section 031.1 of the DSSRs); Comp. Gen. No. B-189463 (Nov. 23, 1977) (unpublished) (agency's determinations that for purposes of LQA eligibility employee's actual residence was in Greece where he was when initially appointed, rather than San Francisco, California, was not improper); cf. Trifunovich v. United States, 196 Ct. Cl. 301 (1971) (employee who was temporarily in Europe at time of recruitment for position in England was treated as an employee recruited outside the United States for purposes of section 031.12 of the DSSRs notwithstanding claimed legal residence in California).
Based on the foregoing, we conclude that insofar as Proposal 2 relates to the payment of LQAs it is inconsistent with section 031.1 of the DSSRs, a Government-wide regulation and is nonnegotiable.
2.Travel and Transportation Expenses
Proposal 2 would also allow local hires who maintain a legal residence within the U.S., Puerto Rico, or a possession of the U.S. and who are selected for another bargaining unit position through the CONUS recruitment program to negotiate a transportation agreement based on that legal residence. Such employees would also be allowed constructive travel and transportation expenses to the new posts of duty up to the amount that they would be allowed based on their legal residence.
Under 5 U.S.C. ° 5724(d), when an employee transfers to a post of duty outside the continental United States, his/her "expenses of travel and transportation to and from the post shall be allowed to the same extent and with the same limitations prescribed for a new appointee" under
5 U.S.C. ° 5722. Under 5 U.S.C. ° 5722, payment of travel and transportation expenses is authorized for new appointees between their "place of actual residence" at the time of appointment or assignment to duty outside the U.S. and the place of employment outside the continental U.S. 5 U.S.C. ° 5722(a). Proposal 2 would treat on employee's "legal residence" as his/her "place of actual residence."
The question of what constitutes "place of actual residence" has been addressed by both the U.S. Claims Court and the Comptroller General in disputes as to what constitutes a particular employee's place of actual residence for purposes of payment of travel and/or transportation expenses. In Brown v. United States, 5 Cl. Ct. 1 (1984), aff'd, 741 F.2d 1374 (Fed. Cir. 1984) (Brown) the Claims Court addressed the meaning of that phrase in the context of 5 U.S.C. ° 5728. We believe that, given the fact that the same phrase is involved, the court's analysis is equally applicable to interpretation of 5 U.S.C. ° 5722. In
Brown, the Claims Court stated:
Congress presumably meant to require something other than mere "residence" when it utilized the term "place of actual residence." This is particularly understandable when it is considered that a vast uncertainty surrounds the meaning of "residence," a term which "has an evasive way about it, with as many colors as Joseph's coat."
In interpreting the term "residence" as used in statutes, the courts have tended to divide the pertinent statutes into two groups. "Residence" in the first group of statutes was thought of as "legal residence," a concept considered somewhat akin to domicile, in which actual residence in a location plus the intent to make this location one's permanent home, were required. "Residence" has generally been considered similar to "domicile" in statutes governing voting, wills, guardianship, and other areas in which it was thought desirable for individuals to have only one legal home, where the place of intent to make a permanent home was often controlling.
In contrast, "residence" in other statutes has been thought to mean "actual residence," which term has been considered to include a more or less temporary residing place, requiring physical presence (beyond a brief sojourn) and little more. The word "residence" has been construed as meaning "actual residence" or a close facsimile thereof in statutes governing taxation, welfare eligibility, service of process, attachments, and other areas where an individual's physical location for an extended period, rather than his intent, is considered the dispositive factor.
Congress's literal use of the words "place of actual residence" in ° 5728 therefore appears to eliminate much of the ambiguity which might arise from simply using the word "residence." We believe that such circumstance should be considered to mean the place where one had actually (in fact, not fictionally) resided, in a status other than as a transient or sojourner.
5 Cl. Ct. at 11 (citations omitted).
In addressing claims that involve a determination of what constitutes "place of actual residence" the Comptroller
General has held:
The term "actual residence" is not defined in the law or implementing regulations and is for determination from the facts of each case. The term as used in the statute generally would be understood to mean the place at which the appointee physically resides at the time of his appointment. However, we have recognized that, in a proper case, the term may include the "legal residence" or "domicile" of the employee.
50 Comp. Gen. 644, 646 (1971) (citation omitted).
We agree with the Claims Court and the Comptroller General that the phrase "place of actual residence," which appears in both 5 U.S.C. ° 5728 and 5 U.S.C. ° 5722, generally refers to actual physical presence in a location for an extended period and is something that may include but is not synonymous with "legal residence." See also Brown, 741 F.2d at 1376 (in affirming the Claims Court's decision, the U.S. Court of Appeals for the Federal Circuit stated:
"Actual residence is actual physical presence in a location for an extended period and differs from legal residence"). Consequently, because the proposal would require, as a matter of course, that where a local hire is selected for a transfer through the Agency's CONUS recruitment program, the local hire's "legal residence" within the U.S., Puerto Rico, or a possession of the U.S., be treated as his/her "place of actual residence," it is inconsistent with 5 U.S.C. °° 5722 and 5724 and is nonnegotiable.
We note that the Agency states that it never declared the second paragraph of Proposal 2 nonnegotiable. The Union offers no rebuttal to this claim. Therefore, the Union's petition for review as to that paragraph is not properly before us. See section 7117(c) of the Statute and section 2424.1 of the Authority's Rules and Regulations.
V. Proposal 3
Notwithstanding any other provisions of DOD CPM Chapter 592, the Agency will exercise the waiver authority contained in DSSR 031.12 for employees within the bargaining unit in the following manner:
DSSR Section 031.12B requirements for locally hired U.S. citizen employees will be waived when, but for the conditions surrounding the employment, the employee would be residing in the United States, Puerto Rico, any U.S. possession, or the former Canal Zone. (Employees who have a permanent legal residence in the United States, Puerto Rico, any U.S. possession, or the former Canal Zone shall be presumed to meet this condition.) One of the following events must have occurred for this waiver:
A. death of the sponsoring spouse;
B. divorce or separation in contemplation of divorce (without regard to whether a separation judgment or decree has been issued by a court);
C. sponsoring spouse left the post or area permanently;
D. either spouse's work location became so separated that daily commuting to a common home would not be reasonable; and
E. resignation, termination, discharge or retirement of the sponsoring spouse.
F. sponsoring spouse becomes physically or mentally incapable of self-support;
G. the employee is an incumbent of a position designated as emergency-essential.
In addition, the employee must have entered the area as the spouse of a sponsor who was eligible for the quarters allowance or who would have been eligible if employed by the government. In circumstances described in B, C, and D above, LQA will be stopped should the couple remarry, reconciliation occur, or the spouse returns to his/her post area, unless the employee is or becomes eligible for waiver under another of the criteria specified above.
A. Positions of the Parties
The Agency asserts that this proposal interferes with management's right to determine its budget in that it would prescribe the use of agency funds. In support, the Agency states that approximately 400 local hires would become eligible for an LQA based on the circumstances set forth in this proposal and that the approximate annual cost of LQAs is $10,000 per person. Consequently, the Agency asserts that Proposal 3 would result in additional costs of $4,000,000 per year. In support of this argument the Agency cites Navy Charleston Naval Shipyard, Charleston, South Carolina v. FLRA, 885 F.2d 185 (4th Cir. 1989).
The Agency argues that this proposal is inconsistent with the DSSRs in that it would deny the agency head the discretion that the Agency claims is granted by those regulations to determine whether unusual circumstances in an individual case justify a waiver of section 031.12b. Citing Department of the Navy, Military Sealift Command v. FLRA, 836 F.2d 1409 (3rd Cir. 1988) (Military Sealift Command), the Agency asserts that it would be an insurmountable burden
to require the Agency to show that the discretion provided under the DSSRs is sole and exclusive.
The Agency further states that Proposal 3 conflicts with "DoD 1400.25, in particular, Civilian Personnel Manual 592," and that "for the reasons stated above, there is a compelling need for this regulation." Statement of Position at 10.
The Union asserts that a waiver of section 031.12b of the DSSRs is negotiable because it is within the Agency's discretion. As to the Agency's budget argument, the Union contends that the proposal does not determine the budget of either the Agency or the Department of Defense. In this latter regard, the Union contends that for purposes of section 7106(a)(1) the relevant "agency" is the Department of Defense. As to the amounts presented by the Agency in support of its budget claim, the Union asserts that they are "pulled out of thin air." Reply Brief at 3. The Union contends that only subsection E of Proposal 3 represents an expansion of the categories of employees who would be entitled to a waiver of subsection 031.12b of the DSSRs because subsections A-D, F and G mirror provisions contained in the DoD Civilian Personnel Manual that entitle the employees covered to a waiver.
The Union further argues that even assuming that DoD Directive 1400.25M and Civilian Personnel Manual Chapter 592 constitute rules or regulations within the meaning of section 7117(a)(3) of the Statute, the Agency has not demonstrated that a compelling need exists for these regulations.
B. Analysis and Conclusions
We reject, as unsupported, the Agency's assertion that Proposal 3 interferes with management's right to determine its budget.
In American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604, 607-08 (1980) (Wright-Patterson), aff'd as to other matters sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir.
1981), cert. denied, 455 U.S. 945 (1982), the Authority established two separate tests for determining whether a proposal conflicts with an agency's right to determine its budget. The Authority held that, in order to establish that a union proposal directly interferes with management's right to determine its budget, an agency must either demonstrate that the proposal: (1) prescribes the particular programs to be included in the budget or the amount to be allocated in the budget for those programs; and (2) entails an increase in costs that is significant and unavoidable and is not offset by compensating benefits. See Fort Stewart Schools v. FLRA, 110 S. Ct. 2043, 2049 (1990) (Fort Stewart).
The first budget test in Wright-Patterson makes nonnegotiable only those proposals that are addressed to the budget per se. A proposal will be found to violate an agency's right to determine its budget under the first test if the proposal prescribes the particular programs or operations an agency will include in its budget or prescribes the amount to be allocated in the budget for those programs or operations. See also, International Federation of Professional and Technical Engineers, Local No.1 and U.S. Department of the Navy, Norfolk Naval Shipyard, 38 FLRA 1589, 1593-96 (1991). Under the second test, a proposal will be found to violate an agency's right to determine its budget if the proposal does not, by its terms, prescribe the particular programs or amounts to be included in an agency's budget but, nevertheless, would result in an increase in costs that is significant and unavoidable and not offset by compensating benefits. Wright-Patterson, 2 FLRA at 608.
Here, the Agency makes no claim that Proposal 3 prescribes programs or operations that the Agency will include in its budget or prescribes the amount to be allocated in the budget for those programs or operations. Rather, the Agency's claims go to the alleged increased costs that would result from Proposal 3. Thus, the issue in this case concerns the second budget test. Although the
Agency claims that Proposal 3 would result in additional costs of $4,000,000 per year, it has failed to provide any information placing its budget projections in perspective within the Agency's budget as a whole. Thus, no basis is presented for establishing that the costs projected by the Agency are "significant." See, for example, Fort Stewart, 110 S. Ct. at 2050.
The Agency has failed to demonstrate that Proposal 3 meets either of the tests for determining whether a proposal conflicts with management's right to determine its budget. The parties bear the burden of creating a record upon which the Authority can make a decision. See, for example, National Federation of Federal Employees, Local 2050 and U.S. Environmental Protection Agency, 35 FLRA 706, 711-12 (1990); National Federation of Federal Employees, Local 1167 v. FLRA, 681 F.2d 886, 891 (D.C. Cir. 1982), aff'g National Federation of Federal Employees, Local 1167 and Department of the Air Force, Headquarters, 31st Combat Support Group (TAC), Homestead Air Force Base, Florida, 6 FLRA 574 (1981). A party failing to bear this burden acts at its peril.
The Agency acknowledges that under the DSSRs it is within its discretion to determine whether "unusual circumstances" exist in individual cases to justify a waiver of subsection 031.12b. Agency statement of position at 9. The Authority has held that matters concerning conditions of employment that are within the discretion of an agency and are not otherwise inconsistent with law or applicable rule or regulation are negotiable. For example, National Federation of Federal Employees, Forest Service Council and U.S. Department of Agriculture, Forest Service, Washington, D.C., 40 FLRA No. 18 (1991) (Proposal 5); National Federation of Federal Employees, Local 2050 National Federation of Federal Employees and U.S. Department of Agriculture, Forest Service, 35 FLRA 1008, 1014 (1990); National Treasury Employees Union and Department of the Treasury, U.S. Customs Service, 21 FLRA 6 (1986), aff'd sub nom. Department of the Treasury, U.S. Customs Service v. FLRA, 836 F.2d 1381 (D.C. Cir. 1988); National Treasury Employees Union, Chapter 6 and Internal
Revenue Service, New Orleans District, 3 FLRA 747 (1980). Where law or applicable regulation vest an agency with exclusive authority or unfettered discretion over a matter, the agency's discretion is not subject to negotiation. See for example, Illinois National Guard v. FLRA, 854 F.2d 1396 (D.C. Cir. 1988) (Illinois National Guard); Police Association of the District of Columbia and Department of the Interior, National Park Service, U.S. Park Police, 18 FLRA 348 (1985) (Park Police).
We find no basis for concluding that requiring the Agency to exercise its discretion to determine what constitutes "unusual circumstances" through negotiations is inconsistent with the DSSRs. That is, nothing in the DSSRs reserves that discretion solely and exclusively to the Agency. Compare Illinois National Guard and Park Police. Additionally, we note that the Agency makes no assertion that the circumstances set forth in Proposal 3 could not constitute "unusual" circumstances, nor is it otherwise apparent that those circumstances are incompatible or irreconcilable with the standard of "unusual." That is, the circumstances listed in subsections A-G of Proposal 3 refer to events that readily lend themselves to being viewed as uncommon or exceptional, and hence, "unusual." Moreover, we note that they bear a striking similarity to the types of events that have already been determined under Department of Defense regulations to meet the grounds for waiver of section 031.12b. See Appendix B. We recognize that in
Acker II the Claims Court, in ruling on the reasonableness of an agency's practices with respect to waiving subsection 031.12b, endorsed a distinction between circumstances in which an employee's spouse had retired and those circumstances in which an employee's spouse had died or departed the area or where a divorce or separation had occurred. See 6 Cl. Ct. at 511. However, we do not view the court's action as requiring a conclusion that retirement of a spouse could not reasonably constitute an unusual circumstance within the meaning of section 031.12. In our view, the court did not hold that only one course of action could be viewed as reasonable, but, rather, it concluded that a particular course of action was not unreasonable.
Finally, we reject the Agency's assertion that Proposal 3 is inconsistent with an agency regulation for which a compelling need exists.
The compelling need provisions of the Statute are meant to insure that otherwise negotiable bargaining proposals are taken outside the duty to bargain only if the agency involved demonstrates and justifies an overriding need for the policies reflected in the rules or regulations to be uniformly applied throughout the agency. American Federation of Government Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance Corporation, Chicago Region, Illinois, 7 FLRA 217, 220 (1981). Therefore, an agency must (1) identify a specific agency-wide regulation; (2) show that there is a conflict between its regulation and the proposal; and (3) demonstrate that its regulation is supported by a compelling need with reference to the Authority's standards set forth in section 2424.11 of its Regulations. See American Federation of Government Employees, AFL-CIO, Local 1928 and Department of the Navy, Naval Air Development Center, Warminster, Pennsylvania, 2 FLRA 451, 454 (1980). Generalized and conclusionary reasoning is not enough to support a finding of compelling need. The Authority is not in a position on its own to determine the purposes agency regulations are designed to achieve or the importance the agency attaches to those regulations. Unless the agency provides us with facts and arguments bearing on each of these questions, we cannot judge the validity of the agency's contentions. For example, FDIC, Madison Region, 21 FLRA at 880-81.
The only offering that the Agency makes in support of its claim that negotiation of Proposal 3 is barred by conflict with a regulation for which a compelling need exists is the statement "for the reasons stated above, there is a compelling need for [its] regulation." Statement of
Position at 10. The Agency has failed to indicate the Authority's compelling need criteria on which it relies and leaves for us to guess how any of the arguments made in its statement of position may relate to any or all of those criteria. This in no way meets the Agency's burden, and, consequently, its claim of compelling need cannot be sustained. See, for example, FDIC, Madison Region, 21 FLRA at 880-81.
Based on the foregoing, we conclude that Proposal 3 is within the duty to bargain.