40:0570(53)NG - - NTEU and Dept. of the Treasury, Customs Service, Washington, D.C. - - 1991 FLRAdec NG - - v40 p570



[ v40 p570 ]
40:0570(53)NG
The decision of the Authority follows:


40 FLRA No. 53

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

NATIONAL TREASURY EMPLOYEES UNION

(Union)

and

U.S. DEPARTMENT OF THE TREASURY

U.S. CUSTOMS SERVICE

WASHINGTON, D.C.

(Agency)

0-NG-1874

DECISION AND ORDER ON NEGOTIABILITY ISSUES

April 30, 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). The case concerns the negotiability of two proposals addressing the Agency's performance appraisal system. For the following reasons, we find that both proposals are negotiable.

II. Proposal 1

Section 10D: To ameliorate the adverse impact on a union representative's ability to meet performance standards while performing authorized representational activity as well as the adverse impact on employees caused by a representative's inability to perform representational activities without such consideration, the employer will not place the representative at a disadvantage in appraising performance due to this time spent performing representational activities.

A. Because service as a union representative using official time is a statutorily protected activity, management will ensure that Union representatives are not interfered with, restrained, or coerced in the exercise of the right through the application of performance standards to them.

B. Authorized time spent performing Union representational functions will not be considered as a negative factor when evaluating any critical or non-critical element.

C. For example, if a union representative has spent 30 percent of a work period on official time, annual leave or LWOP performing union duties, this fact will be considered in the application of elements and performance standards to produce a fair and equitable result.

D. Additionally, if an employee is performing representational functions that result in frequent interruptions of normal work, this will also be taken into account when evaluating the employee to produce a fair and reasonable result.

E. Reasonable accommodations will be made in the appraisal process of union representatives to allow for their use of official time.

A. Positions of the Parties

1. The Agency

The Agency notes that after impasse was reached during negotiations for a new collective bargaining agreement, the Federal Service Impasses Panel directed the parties to submit remaining issues to a mediator-arbitrator. On August 22, 1990, the mediator-arbitrator ordered the parties to adopt certain proposals.

The Agency acknowledges that it asserted that Proposal 1 was nonnegotiable during the parties' discussions with the interest arbitrator on August 22, 1990. The Agency asserts, however, that the proposal became an "irrelevancy and should be considered to have been withdrawn by the Union" on that date because the interest arbitrator ordered the inclusion of alternative language involving the same issue in section 10H of the parties' agreement. Statement of Position at 5.

The Agency concludes that the Union's negotiability appeal as to section 10D "is moot and therefore should be dismissed by the Authority." Id.

The Agency also contends that "proposals which seek to guarantee that employees will receive 'fair' and 'equitable' results on performance appraisals" are nonnegotiable because they interfere with management's rights to assign work and direct employees. Id. at 3. The Agency further asserts that the proposal is nonnegotiable because "it would subject the content of Agency performance standards to arbitral review."

Id.

2. The Union

The Union asserts that the interest arbitrator "specifically declined to assert jurisdiction over the disputed language and informed the [U]nion that it could pursue a negotiability appeal over the matter if it were so inclined." Reply Brief at 3. The Union also asserts that it is entitled to a negotiability determination regarding the proposal because the Agency alleges that the proposal interferes with its rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute.

The Union states that the introductory paragraph of the proposal means that Union representatives "should not be placed in an unfavorable situation or circumstance, such as an unacceptable performance appraisal, as a result of the fact that the employee" engaged in representational activities on official time. Id. at 4. The Union also states that the proposal is "not intend[ed] . . . to protect a [U]nion representative" from an unfavorable performance appraisal provided the employee's appraisal "takes into consideration" the time spent on representational activities. Id. (emphasis omitted). The Union asserts that as the proposal is concerned only with the application of performance standards and does not require management to change or modify established standards, it is a negotiable procedure. The Union contends, in this regard, that a Union representative's use of official time "carves out an exception to the management rights clause of the Statute." Id. at 6.

Finally, the Union contends that the proposal constitutes an appropriate arrangement under section 7106(b)(3) of the Statute. The Union argues that the impact on Union representatives of performance appraisals which "disadvantage" them for their use of official time "is substantial." Id. The Union also argues that the proposal "allows ample managerial discretion as to how the performance expectations will be adjusted so long as a 'fair and reasonable' result is achieved." Id. at 8. The Union states, in this regard, that the requirement in section 10D(E) that the Agency make "'reasonable accommodations'" in appraising Union representatives who use official time is not intended to "encompass job restructuring or reassignment." Id. at 12.

B. Analysis and Conclusions

1. Preliminary Matter

We conclude that the Union's petition for review as to Proposal 1 is properly before us.

Although the Agency asserts that Proposal 1 is moot because it was superseded by a similar proposal imposed on the parties by the interest arbitrator, the Agency also asserts that the proposal is inconsistent with law because it interferes with the Agency's rights under section 7106(a)(2)(A) and (B) of the Statute. As the Agency asserts that Proposal 1 is nonnegotiable, we conclude that the Union's petition meets the requirements of section 7117 of the Statute and section 2424.1 of the Authority's Rules and Regulations. See U.S. Department of Health and Human Services, Social Security Administration, Northeastern Program Service Center and American Federation of Government Employees, National Council of Social Security Administration Payment Center Locals, Local 1760, 36 FLRA 466, 467-68 (1990) (although the agency asserted that a proposal was inconsistent with the parties' master agreement, the Authority resolved the negotiability appeal because the agency also asserted that the proposal was inconsistent with law, rule or regulation). To the extent that a dispute exists concerning the duty to bargain over Section 10D, that issue may be raised in other appropriate proceedings, such as unfair labor practice procedures under section 7118 of the Statute. See National Association of Government Employees, Local R1-109 and U.S. Department of Veterans Affairs Medical Center, Newington, Connecticut, 38 FLRA 928, 931 (1990).

2. Analytical Framework

Management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute encompass the authority to identify critical elements and establish performance standards. For example, National Federation of Federal Employees, Local 2096 and U.S. Department of the Navy, Naval Facilities Engineering Command, Western Division, 36 FLRA 834, 845 (1990) (NAFEC), and cases cited there. Proposals which restrict an agency's authority to determine the content of critical elements and performance standards directly interfere with management's rights to direct employees and assign work. See id. at 845; National Treasury Employees Union and U.S. Department of Health and Human Services, Social Security Administration, Office of Hearings and Appeals, Baltimore, Maryland, 39 FLRA 346, 349-50 (1991) (OHA).

On the other hand, proposals governing only the application of performance standards and critical elements do not conflict with management's rights to direct employees and to assign work. For example, NAFEC, 36 FLRA at 846. Accordingly, the task in deciding the negotiability of Proposal 1 "is primarily one of determining, based on the record, whether [it] concern[s] substantive matters, such as the content of performance standards and critical elements, or whether [it] concern[s] the application of those standards and elements and other nonsubstantive matters such as procedures." Id. (quoting Patent Office Professional Association and Patent and Trademark Office, Department of Commerce, 25 FLRA 384, 387 (1987), affirmed mem. sub nom. Patent Office Professional Association v. FLRA, No. 87-1135 (D.C. Cir. Mar. 30, 1988) (per curiam)).

We will first consider whether the separate sections of Proposal 1 directly interfere with management's rights. We will then consider the Union's argument that the proposal constitutes an appropriate arrangement.

3. The Introductory Paragraph

The introductory paragraph requires the Agency to "not place" Union representatives "at a disadvantage in appraising performance" so as "to ameliorate the adverse impact" of the official time spent by Union representatives on their responsibilities. The Union states that the intent of the paragraph is to prevent the Agency from placing an employee representative "in an unfavorable situation or circumstance . . . as a result of the fact that the employee used official time . . . ." Reply Brief at 4. Consistent with the Union's statement of intent, we find that the introductory paragraph does not merely require management to consider the time spent on Union activities in evaluating employees' performance. Rather, the introductory paragraph would require management to modify the levels of productivity and timeliness established for employee Union representatives in light of the time spent on Union activities.

We conclude that, by requiring the Agency to modify its critical elements and performance standards so as to accommodate an employee's use of official time, the introductory paragraph of Proposal 1 directly interferes with the Agency's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute. See OHA, 39 FLRA 346 at 356-57 (portion of provision requiring that time spent performing Union representational functions not adversely affect an employee's production or timeliness requirements found to directly interfere with management's right to assign work and direct employees).

4. Section A

Section A requires the Agency to ensure that "union representatives are not interfered with, restrained, or coerced" in the exercise of the right to serve as a Union representative through the application of performance standards. Nothing in the plain wording of this section addresses the content of performance standards or elements and nothing in the Union's submissions indicates that it intends the section to apply in a manner which would affect such content. Moreover, the Agency does not address section A in its statement of position. Accordingly, as no basis for finding that section A either directly interferes with the Agency's rights under section 7106 of the Statute or is otherwise nonnegotiable is apparent to us, we conclude that this section is negotiable.

We also note, however, the Union's assertions that Proposal 1 in its entirety constitutes an appropriate arrangement. We will, therefore, also address whether, assuming that this portion of the proposal directly interferes with management's rights, it is nevertheless negotiable as an appropriate arrangement.

5. Remaining Sections

Section B of the proposal requires that the time spent on Union representational activities "not be considered as a negative factor" in evaluating an employee. Section C provides that the percentage of work time spent on representational activities "will be considered" by the Agency in determining an employee's performance standards. Section D requires that frequent interruptions of an employee Union representative's normal work be "taken into account" in the employee's evaluation. Section E requires the Agency to make "reasonable accommodations" in the appraisal process of Union representatives "to allow for their use of official time."

In our view, these sections, when read together, would require the Agency to apply established elements and standards in a way that affects the content of the standards. That is, unlike proposals which merely require an agency to consider various matters in appraising performance, these sections of Proposal 1 would require the Agency to modify the content of standards and elements in light of a Union representative's use of official time. As such, we conclude that sections B through E of Proposal 1 directly interfere with management's rights to direct employees and assign work. See, for example, OHA, 39 FLRA at 356-57; NAFEC, 36 FLRA at 844-48.

6. Appropriate Arrangements

We have determined that the introductory paragraph and sections B through E of Proposal 1 directly interfere with the Agency's rights to direct employees and assign work. A proposal that directly interferes with a management right under section 7106 of the Statute is, nevertheless, negotiable if it constitutes an appropriate arrangement under section 7106(b)(3) of the Statute. As discussed previously, the record before us provides no basis on which to conclude that section A of the proposal directly interferes with management's rights under section 7106. Consistent with the Union's argument that Proposal 1, as a whole, constitutes an appropriate arrangement, however, we will also examine, for this part of our decision, whether section A, if it were found to constitute such a direct interference, would constitute an appropriate arrangement under section 7106(b)(3) of the Statute.

In determining whether a proposal is an appropriate arrangement, the Authority first determines whether the proposal is intended to be an "arrangement" for employees adversely affected by management's exercise of a reserved right. This determination is made by examining "the effects or foreseeable effects on employees which flow from the exercise of those rights, and how those effects are adverse." National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24 (1986) (KANG). Proposals addressing "'purely speculative or hypothetical concerns, or which are otherwise unrelated to management's exercise of its reserved rights,'" will be excluded from consideration as appropriate arrangements. West Point Elementary School Teachers Association, NEA and United States Military Academy, West Point Elementary School, 34 FLRA 1008, 1012 (1990) (quoting American Federation of State, County and Municipal Employees, Local 3097 and Department of Justice, 24 FLRA 453, 458 (1986)). If a proposal is determined to be an "arrangement," the Authority determines whether the proposed arrangement is "appropriate," or whether it is inappropriate because it excessively interferes with management's rights. KANG, 21 FLRA at 31-33.

The Union contends that Proposal 1 is "negotiable as an appropriate arrangement for employees under Section 7106(b)(3)" of the Statute. Reply Brief at 8-9. In our view, it is foreseeable that an employee Union representative's use of official time could adversely affect the employee's ability to fulfill the requirements of his/her performance standards, and, in turn, could result in a lower performance appraisal. Proposal 1 seeks to ameliorate the impact on employees of time spent on representational activities. Therefore, we conclude that Proposal 1 constitutes an arrangement, within the meaning of section 7106(b)(3) of the Statute.

Having concluded that Proposal 1 is an arrangement, we now consider whether it is "appropriate," within the meaning of section 7106(b)(3) of the Statute. In KANG, 21 FLRA at 33, the Authority stated that it would consider whether the negative impact on management's rights is disproportionate to the benefits to be derived from the proposed arrangement. Applying that standard, we must determine whether Proposal 1 excessively interferes with management's right to assign work and direct employees.

In our view, the burden placed on the Agency and the Agency's exercise of its management rights by Proposal 1 is minimal. The proposal seeks to protect employees engaged in representational activities against performance evaluations which fail to take into consideration a limitation on their ability to meet the performance standards for their position which results from use of authorized official time, annual leave, or leave without pay. The proposal does not seek to protect employees against the consequences of poor performance, however. In this regard, the proposal would not affect or inhibit the Agency's ability to assess and evaluate Union representative's job performance and take personnel actions based on that assessment and evaluation.

Moreover, it is not apparent to us, and the Agency does not assert, that the Agency has an interest in evaluating performance without regard to time authorized for representational activities. With respect to the latter point, the proposal refers only to "authorized time," including official time, annual leave, or leave without pay. The proposal would not, therefore, enable an employee to evade or otherwise frustrate application of performance standards and elements through the unauthorized use of official time or leave.

Similarly, the proposal does not dictate or mandate that employee Union representatives receive any particular performance rating. The proposal only requires that the Agency evaluate job performance in light of the amount of time authorized to be spent by employees on representational activities. Provided the Agency does so, the Agency is free to assign any performance rating to those employees.

In addition, the specific constraints imposed by the proposal do not appear to be unreasonable or difficult to administer. The introductory paragraph and section A require, respectively, only that the Agency not place Union representatives at a disadvantage as a result of time spent performing representational duties and ensure that those representatives are not interfered with, restrained, or coerced in the exercise of their rights through the application of performance standards. Consistent with these principles, section E requires "reasonable accommodations," which, according to the Union, are not intended to encompass or require job restructuring. Sections B, C, and D, when read together, provide that the performance of representational activities, including the amount of and frequency with which authorized time is used, will be taken into account in appraisals so as to avoid any negative impact on performance ratings resulting from the performance of representational activities. We find nothing in these provisions which would unreasonably burden the exercise of the Agency's rights.

On the other hand, by ensuring that employees engaged in representational activities will not be penalized because of such activity, Proposal 1 offers a significant benefit to such employees and to all other employees. In particular, Union representatives may engage in representational activities without fear that so doing will endanger their performance evaluations. Moreover, under section A, Union representatives would have a contractual guarantee that they may exercise their protected statutory rights without interference, restraint, or coercion. These effects should also positively impact upon all other employees, who benefit from such representation. Moreover, we note that section 7101 of the Statute provides that employees' rights to organize, bargain collectively, and participate in labor organizations both safeguards the public interest and contributes to the effective conduct of public business. Therefore, Proposal 1, which offers protection to employees who use official time, would benefit the Agency as a whole.

On balance, we find that the benefits afforded employees by Proposal 1 outweigh the effect on management's rights to direct employees and assign work. Accordingly, we conclude that Proposal 1 does not excessively interfere with management's rights and constitutes an appropriate arrangement negotiable under section 7106(b)(3) of the Statute.

Finally, we reject the Agency's contention that the proposal is nonnegotiable on the basis that its inclusion in a collective bargaining agreement would subject the content of performance standards to arbitral review. The Agency's assertion that an arbitrator's judgment may be substituted for its own is not a basis for finding a proposal to be nonnegotiable. See OHA, 39 FLRA at 350.

In sum, we conclude that although the introductory paragraph and sections B through E of Proposal 1 directly interfere with the Agency's rights to direct employees and assign work, they do not excessively interfere with the exercise of these rights. Moreover, although we find that section A does not directly interfere with the exercise of management's rights under section 7106 of the Statute, we conclude that even if that section were found to so interfere, it would not do so to an excessive degree. Accordingly, Proposal 1 is negotiable.

III. Proposal 2

Section 10E- In the application of standards to individual employees, the Employer will take into account mitigating factors such as availability of resources, lack of training, or frequent, authorized interruptions of normal work duties.

A. Positions of the Parties

1. The Agency

The Agency asserts that Proposal 2 would restrict management's authority to establish performance standards. The Agency contends that the proposal would insulate employees from consequences attributed to the factors set forth in the proposal. The Agency concludes that the proposal is outside the scope of bargaining because it interferes with management's rights under section 7106(a)(2)(A) and (B) of the Statute to assign work and direct employees.

The Agency asserts that the proposal is not an appropriate arrangement within the meaning of section 7106(b)(3) of the Statute because it does not concern employees affected by the exercise of management rights and it excessively interferes with management's rights to assign work and direct employees under section 7106(a)(2)(A) and (B) of the Statute.

2. The Union

The Union asserts that the proposal "does not violate management's rights to assign and direct since . . . it does not preclude the development of standards" which account for "the mitigating factors." Reply Brief at 13. The Union notes that the "effect of the proposal would be to modify the level of work required of an employee to achieve a given performance rating." Id. The Union argues, however, that the proposal "does not insulate employees from accountability for their performance." Id.

The Union also asserts that the proposal constitutes a negotiable appropriate arrangement within the meaning of section 7106(b)(3) of the Statute. The Union contends that performance ratings have an impact on employees because they "are used as the basis to award employees, promote, train and remove or downgrade them for unacceptable performance" and they are the basis for determining "RIF retention standing . . . ." Id. at 14. The Union argues that any interference with management rights "is minimal" because the mitigating circumstances outlined in the proposal "are completely outside the control of the employee." Id.

B. Analysis and Conclusions

1. Direct Interference With Management's Rights

As noted previously, proposals restricting an agency's right to determine the content of performance standards and critical elements directly interfere with management's rights to direct employees and to assign work under section 7106(a)(2)(A) and (B) of the Statute. See, for example, American Federation of Government Employees, AFL-CIO, Department of Education Council of AFGE Locals and Department of Education, 34 FLRA 1114, 1115-18 (1990) (Proposal 1). Proposals concerning the application of performance standards, however, do not conflict with management's rights to direct employees and assign work. See, for example, American Federation of Government Employees, Local 3172 and U.S. Department of Health and Human Services, Social Security Administration, Vallejo District Office, 35 FLRA 1276, 1281 (1990).

Proposal 2 requires the Agency to "take into account" such mitigating factors as the availability of resources, lack of training, or frequent, authorized interruptions of normal work duties, in determining an employee's performance evaluation. The Union states that the "effect of the proposal would be to modify the level of work required of" employee Union representatives. Reply Brief at 13.

In National Treasury Employees Union and Department of Health and Human Services, Social Security Administration, Office of Hearings and Appeals, 34 FLRA 1000, 1006 (1990), we held that the "phrase 'to take into account' . . . connotes that management's decision will be based, at least in part, on the specified factors." Consistent with the Union's statement of intent, Proposal 2 also would require the Agency to change or adjust its performance expectations in light of the factors specified in the proposal. That is, the proposal's requirement that the Agency "take into account mitigating factors" encompasses more than consideration of those factors. The proposal also would require the Agency, in applying performance standards, to modify its performance expectations in light of those factors. Consequently, we conclude that Proposal 2 directly interferes with the Agency's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute.

We reject, however, the Agency's assertion that "[t]here are a myriad of factual situations involving possible 'mitigating factors,' which could arise under proposal 10E, which would . . . interfere with the exercise of other reserved management rights, e.g., to determine the budget and allocate funds for Agency facilities, to discipline etc." Statement of Position at 8. To the extent that the Agency intends this statement to constitute an assertion that the proposal directly interferes with its rights to determine its budget and to discipline employees, the Agency makes no attempt to support its assertions with evidence or argument. Moreover, consistent with the plain wording of Proposal 2, we find no basis on which to conclude that the proposal directly interferes with these rights. Instead, the proposal is clearly, and solely, concerned with the performance appraisal process.

2. Appropriate Arrangement

As a threshold matter, we find that the proposal establishes an arrangement for employees adversely affected by the exercise of management's rights. The Union contends that the intent of the proposal is to ensure that employees' performance evaluations are not affected by "mitigating factors" which are "completely outside the control of the employee." Reply Brief at 14. In our view, it is foreseeable that employees could be adversely affected by performance evaluations which are based, even in part, on performance which is affected by matters over which the employees have no control. Moreover, the Agency does not dispute that the mitigating factors enumerated in the proposal are beyond an employee's control. We conclude, therefore, that Proposal 2 is an arrangement, within the meaning of section 7106(b)(3) of the Statute.

Having concluded that Proposal 2 is an arrangement, we now consider whether it is appropriate within the meaning of section 7106(b)(3) of the Statute. See NAFEC Western Division, 36 FLRA at 841. In KANG, 21 FLRA at 33, the Authority stated that it would consider whether the negative impact on management's rights is disproportionate to the benefits to be derived from the proposed arrangement. Applying that standard, we must determine whether Proposal 2 excessively interferes with management's right to assign work and direct employees.

We find that the burden placed on the exercise of the Agency's rights to direct employees and assign work by Proposal 2 is minimal. The proposal applies only to matters over which an employee has no control and only to the extent that the mitigating factors are involved in an employee's performance. Management has, and retains, the prerogative to ensure that resources are available to employees, that adequate training is provided to them, and that employees are not confronted with authorized interruptions of their work duties. Moreover, the proposal does not dictate to the Agency what its performance standards, critical elements, or performance ratings should be. Instead, the proposal only requires the Agency to "take into account" the specified factors when evaluating employees against their performance standards. If the Agency does so, the Agency is free to reach any conclusion wh