41:0885(76)CA - - Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, IN and Finance and Accounting Office for the Secretary of the Army, St. Louis, MO and AFGE Local 1411 - - 1991 FLRAdec CA - - v41 p885

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[ v41 p885 ]
41:0885(76)CA
The decision of the Authority follows:


41 FLRA No. 76

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

DEPARTMENT OF THE ARMY

U.S. ARMY ENLISTED RECORDS AND EVALUATION CENTER

FORT BENJAMIN HARRISON, INDIANA

and

FINANCE AND ACCOUNTING OFFICE FOR THE

SECRETARY OF THE ARMY

ST. LOUIS, MISSOURI

(Respondents)

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

LOCAL 1411, AFL-CIO

(Charging Party/Union)

5-CA-70420

DECISION AND ORDER

July 30, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This unfair labor practice case is before the Authority on exceptions filed by the Respondents to the attached decision of the Administrative Law Judge. The General Counsel filed an opposition to the Respondents' exceptions.

The complaint alleged that Respondent U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana (EREC) violated section 7116(a)(1) and (5) of the Federal Service Labor-Management Relations Statute (the Statute) by refusing to bargain with the Union over the substance and/or the impact and implementation of changes in the scheduled pay day and in the time between the end of a pay period and the day on which employees receive their paychecks ("pay lag"). The complaint also alleged that Respondent Finance and Accounting Office for the Secretary of the Army, St. Louis, Missouri (FAO) violated section 7116(a)(1) of the Statute by interfering with the bargaining relationship between EREC and the Union when it implemented the changes prior to the completion of bargaining.

The Judge found that Respondent EREC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over the impact and implementation of the changes. The Judge also found that Respondent FAO violated section 7116(a)(1) by interfering with the bargaining relationship between EREC and the Union when it implemented the pay lag and pay day changes prior to the completion of bargaining.

Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Statute, we have reviewed the rulings of the Judge made at the hearing and find that no prejudicial error was committed. We affirm the rulings. Upon consideration of the Judge's decision, the exceptions, the opposition, and the entire record, we agree with the Judge that Respondent EREC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over the impact and implementation of the changes in pay procedures and that Respondent FAO violated section 7116(a)(1) by interfering with the bargaining relationship between EREC and the Union. We adopt the Judge's findings, conclusions, and recommended Order to the extent that they are consistent with our findings below.

II. Background

Respondent EREC is an activity at Fort Benjamin Harrison, Indiana. The Union is the exclusive representative of a unit of approximately 185 employees of EREC. The Union also represents five other units of different activities at Fort Benjamin Harrison. The Union and EREC are parties to a collective bargaining agreement covering the units that the Union represents at Fort Benjamin Harrison. FAO provides payroll services for approximately 85 activities, including EREC.

This case concerns changes in pay procedures effected throughout the Department of the Army. By memorandum dated June 3, 1987, the Army announced that it was modifying Army Regulation 37-105, Chapter 2-2, Finance and Accounting for Installations, Civilian Pay Procedures. The modification required all Army installations to adopt a 12-day pay lag for their civilian employees. Prior to this time, the length of the pay lag varied from installation to installation. In this case, it was between 7 and 9 days. The modification also required that all installations be on the same 2-week pay period schedule so as to create a uniform pay day throughout the Army. According to the June 3, 1987 memorandum, the modification was to be implemented by January 2, 1988.

In a memorandum dated July 8, 1987, FAO advised EREC and other activities that to comply with the regulation FAO would begin implementing the 12-day pay lag and standard pay period "on August 8, 1987 with full compliance by September 30, 1987." Judge's Decision at 5. The memorandum stated that the pay lag would increase by 1 day each pay period until it was 12 days and that the change in the standard pay period "would occur with a one week pay period . . . followed by pay periods of two weeks[.]" Id. FAO set the date for full implementation on September 30, 1987, rather than late December because its representative was expecting new personnel and a 30 percent increase in workload on October 1, 1987. FAO chose "to provide a one week paycheck at first before the new standard two week schedule commenced, rather than to delay for a three week paycheck, in order to lessen the impact on employees of having to wait an extra week" to get paid. Id.

The Union was notified of the pay lag and pay day changes in a memorandum dated July 21, 1987 and it requested to bargain over the changes. On July 31, 1987, the Union submitted the following proposals:

Union Proposal No. 1

The Employers agree that they will mail/deliver employees['] paychecks no later than 4 workdays after the end of a particular pay period. Pay periods are to mean the current 26 pay periods per year.

Union Proposal No. 2

Employees will not have to accept direct deposit of their pay as a condition of employment but will have one of the following options.

a. Employees will have their paychecks hand delivered and receive Leave and Earning[s] statement, etc., if they desire.

b. Employees may designate any address for the mail distribution of their paychecks, leave and earnings statement, etc.

c. Employees may have their paychecks deposit[ed] and credit[ed] to their personal account in any financial institution.

Union Proposal No. 3

If the Agency alleges non-negotiability of any of the Union's proposal[s] on the basis of "Agency rules or regulations" pursuant to 5 USC, Section 7117(a)(2), no implementation of any part of the Agency proposals will take place until a negotiability determination [has been] made by the FLRA. The Union will move promptly to request such a determination.

Id. at 6.

The parties met on August 10, 1987, in their only bargaining session on the changes. Representatives from the Union and Fort Benjamin Harrison met in a single bargaining session. These proposals were intended to cover both EREC and the other activities with employees represented by the Union.(1)

EREC declared that the first proposal "went to the substance of the [pay lag] change and was not negotiable[.]" Id. at 7. EREC refused to bargain on Proposal 3 because "it was a 'ground rule' and therefore already covered by the existing collective bargaining agreement." Id.

As to Proposal 2, EREC asserted that it was "contrary to an existing agreement" between the parties. Id. Specifically, EREC asserted that the parties were bound by a 1982 Memorandum of Agreement providing that employees were to "have their paychecks mailed to either a designated mailing address or credited to an account with a financial institution absent a showing of 'genuine hardship.'" Id. at 4 (citation to footnote omitted). As a result of the memorandum, "worksite distribution of paychecks was discontinued[.]" Id. However, EREC was willing to bargain on Proposal 2 "if the Union would drop that part of the proposal which made hand delivery of pay checks available to employees." Id. at 7. The Union "did not agree that the [1982] agreement applied to EREC and, in any event, asserted that the proposed change voided that agreement." Id. At the end of the session, the parties agreed that they were at impasse.

On August 13, 1987, EREC informed the Union that FAO would begin implementing the changes on August 17, 1987. The Union immediately filed a request for assistance with the Federal Service Impasses Panel (FSIP). Sometime prior to August 17, 1987, EREC's Labor Relations Officer contacted FAO and "requested that FAO delay the implementation until negotiations were completed." Id. Notwithstanding EREC's request, FAO began its implementation on August 17, 1987 and completed the changes in October, 1987.

On November 16, 1987, the FSIP declined to assert jurisdiction over the matter. According to the Union Vice President, the 1-week pay period resulting from the implementation of the changes "caused some employees to miss their scheduled car or rent payments which resulted in late charges being assessed" and that "[s]ome employees were also short of money to prepare children for the new school year." Id. at 8.

III. Administrative Law Judge's Decision

The General Counsel alleged that Respondent EREC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over the Union's proposals concerning the substance and impact and implementation of changes in the pay lag and pay period. The General Counsel also alleged that Respondent FAO violated section 7116(a)(1) by implementing the changes while negotiations between the Union and EREC were pending, thereby interfering with the bargaining relationship between those parties. The Respondents asserted before the Judge that there was no duty to bargain over any of the Union's proposals and, thus, they were free to implement the change.

The Judge dismissed the complaint as to Proposals 1 and 3. However, the Judge found that Proposal 2, concerning paycheck delivery, was negotiable and, therefore, that Respondent EREC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over Proposal 2. The Judge also found that Respondent FAO violated section 7116(a)(1) by interfering with the bargaining relationship between the Union and EREC when it implemented the changes before bargaining on Proposal 2 had been completed.

With respect to Proposal 1, which sought a 4-day pay lag, the Judge noted the Respondents' claim that the Army's revised regulation establishing a 12-day pay lag and uniform pay periods was supported by a compelling need. Noting that "all elements of a compelling need determination--including whether a proposal is subject to or conflicts with an agency regulation--must be resolved in a negotiability proceeding[,]" the Judge concluded that the issue may not be resolved in an unfair labor practice (ULP) proceeding. Judge's Decision at 9, citing Federal Emergency Management Agency, 32 FLRA 502 (1988) (FEMA). The Judge also noted that in National Association of Government Employees, Local R14-89 and Headquarters, U.S. Army Air Defense Artillery Center and Fort Bliss, Fort Bliss, Texas, 32 FLRA 392 (1988) (Fort Bliss), the Authority had considered the negotiability of a similar proposal, also made in response to the Army's regulation establishing the 12-day pay lag, and had found it to be nonnegotiable.

As to Proposal 3, which delayed implementation of the changes, the Respondents claimed that the proposal was inconsistent with the new regulation because that regulation called specifically for an implementation date of January 2, 1988. Because the Respondents claimed that the regulation was supported by a compelling need, the Judge found that the issue was not a proper one for resolution in the ULP forum.

However, with respect to Proposal 2, which sets forth three options for receiving paychecks, the Judge found that the proposal was within Respondent EREC's duty to bargain. The Judge noted the Respondents' assertion that Proposal 2 "is not a proper impact and implementation proposal as it has not been shown how the proposal would address adverse effects of the 12-day pay lag[.]" Id. at 10. The Judge noted that "there were numerous complaints of late and untimely checks both before and after the change." Id. The Judge found that the change in the pay lag "had an effect or reasonably foreseeable effect on the working conditions of unit employees giving rise to a duty to bargain." Id. In this regard, the Judge further found that "[i]t is reasonable to conclude that lengthening this period would trigger employee concerns over where and how quickly they could have their checks in hand." Id. Accordingly, the Judge found that the proposal "constituted 'appropriate arrangements for [employees] adversely affected' under section 7106(b)(2) [sic] and (3) of the Statute." Id.

The Judge also noted the Respondents' claim that the 1982 supplemental agreement between Respondent EREC and the Union "effectively waived [U]nion-initiated bargaining during the term of the agreement" and barred negotiations over the proposal because the supplemental agreement did not provide for worksite distribution of paychecks. Id. The Judge found that the 1982 agreement did apply to Respondent EREC. Id. at 4, n.2. However, the Judge rejected the Respondents' claim that the Union had waived its right to bargain on paycheck delivery and held that by unilaterally changing the employees' pay day, the Respondents were estopped from relying on the terms of the supplemental agreement as a defense for refusing to bargain. To allow the Respondents to do so, the Judge found, would destroy the equality of bargaining envisioned by the Statute. Therefore, the Judge held that whenever an agency exercises its rights under the Statute to effectuate changes in conditions of employment, the agency is obligated to bargain over any legitimate union proposals bearing a substantial relationship to the change, irrespective of prior existing agreements on similar matters.

Further, the Judge noted the Respondents' contention that the proposal directly interferes with management's rights to assign employees and to assign work. The Judge rejected those contentions, finding that the proposal "does not require management to assign specific employees or specific duties to particular employees and is not directly or integrally related to the assignment of work." Id. at 12. The Judge also found that the proposal "would not require the Agency to assign duties that would not otherwise be assigned." Id.

As Proposal 2 was otherwise negotiable under Federal Employees Metal Trades Council, AFL-CIO and the Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA 465 (1987) (Mare Island Naval Shipyard), the Judge concluded that Respondent EREC violated the Statute by refusing to bargain over the proposal. Moreover, because Respondent FAO implemented the changes before EREC had fulfilled its bargaining obligation, the Judge found that FAO violated section 7116(a)(1) by interfering with the bargaining relationship between the Union and EREC.

With respect to the remedy, the Judge found that a status quo ante remedy was not warranted. Analyzing the factors set forth in Federal Correctional Institution, 8 FLRA 604 (1982), the Judge noted that reinstatement of the old pay procedures "would be disruptive to unit employees" and "would also disrupt the Respondent FAO operations which support numerous other activities." Id. at 13. Accordingly, the Judge recommended that Respondent EREC be ordered to bargain over the impact and implementation of the changes in pay procedures and that Respondent FAO "reimburse the unit employees for all monies lost and/or interest charged as a result of the change at a time when negotiations had not been completed." Id. at 14.

IV. Positions of the Parties

A. The Respondents

The Respondents except to the Judge's finding that Proposal 2 was negotiable. In this regard, the Respondents argue that the 1982 "[s]upplemental [a]greement [between EREC and the Union] concerning paycheck distribution does serve as a bar to negotiating over the Union's proposal to have work site paycheck distribution." Exceptions at 3-4. According to the Respondents, "if there is a waiver of union-initiated bargaining there [is] no bargaining obligation imposed on the Activity [EREC]." Id. at 5 (emphasis omitted).

The Respondents note the Judge's finding that when the 1982 supplemental agreement was negotiated, "there was a specific time lag between the end of the pay period and the delivery of employees' paychecks[.]" Id. at 5. The Respondents state, however, that in making his conclusion, the "Judge assumes, without benefit of testimony or documentary evidence, that the pay lag was the same in 1982 as it was in 1987, and therefore speculates" that there was a relationship between the pay lag and the method of distributing paychecks. Id. According to the Respondents, "[t]he reality of the situation is that the pay lag had nothing to do with the Union's decision to sign the supplemental agreement in 1982." Id. at 6. As there is a written, binding agreement stipulating how paychecks will be distributed, the Respondents contend that Proposal 2 is nonnegotiable.

Further, the Respondents argue that because "there is no duty to bargain between the Activity Respondent [EREC] and the Union, there can be no derivative duty imposed on the FAO to recognize a bargaining obligation where non[e] exists originally, or [where] it has been waived by a supplemental agreement." Id. at 4. Therefore, the Respondents assert that the Judge erred in finding that FAO violated the Statute.

Finally, the Respondents contend that the Judge's make-whole remedy is contrary to 5 U.S.C. § 5596 (the Back Pay Act) or is otherwise inconsistent with law. Specifically, the Respondents argue that under the Back Pay Act, employees who have established that they were affected by an agency unfair labor practice are entitled only to payment concerning "a withdrawal or reduction in pay, allowances, or differentials" and not "interest charged the employee by a financial institution." Id. at 8. As the Judge's recommended Order required Respondent FAO to pay interest rather than "normal, legitimate employee benefits in the nature of employment compensation or emoluments[,]" the Respondents argue that the remedy is contrary to the Back Pay Act. Id., citing U.S. Customs Service, Chicago-O'Hare and National Treasury Employees Union, Chapter 172, 23 FLRA 366 (1986) (Customs Service).

Aside from the Back Pay Act, the Respondents contend that they are "barred by the decisions of the Comptroller General" from making payment pursuant to the Judge's Order. Id. at 11. The Respondents note that the Comptroller General found that agencies were without authority to pay employees amounts for earnings lost from their Thrift Savings Accounts due to administrative error (68 Comp. Gen. 220 (1989)) and reimbursement of check overdraft charges due to the agency's inadvertent failure to deposit the employee's paycheck (60 Comp. Gen. 450 (1981) and Comp. Gen. No. B-228632 (March 10, 1988) (unpublished)), because such payments were not authorized by statute or regulation.

The Respondents further argue that the Judge's decision "contains no specific finding of any economic damages, or consequential damages, from the implementation of the twelve day pay lag" and that there was no "economic causal connection between the change in pay lag and the incurred union employee expenses which are currently speculative[.]" Id. at 10. In this regard, the Respondent asserts that it was not foreseeable to FAO that implementation of the changes would cause economic harm and that "the Union employees were on sufficient notice to adjust their debts and expenses based on the minimal adjustments to effectuate the pay lag change." Id.

B. The General Counsel

The General Counsel argues that the Judge properly found that Proposal 2 was negotiable. The General Counsel contends that Proposal 2 is an "impact proposal" which might "all[]eviate the impact of the changes and therefore, must be viewed as related to the changes[.]" Post-Hearing Brief at 18, 19. In this regard, the General Counsel asserts that it "is reasonable to conclude that a change in pay periods and/or pay lag may reasonably affect how bargaining unit employees would choose to receive their paychecks." Id. at 19. Moreover, the General Counsel notes that the Authority has found that the subject matter of the proposal--paycheck delivery--is negotiable.

The General Counsel notes the Respondents' argument that the "paycheck delivery proposal is non-negotiable because [the] Respondent[s] view[] the proposal as [U]nion-initiated bargaining, a right which [the] Respondent[s] claim[] the Union has waived." Id. at 20. However, the General Counsel states that its position is that "the paycheck delivery proposal is a legitimate proposal within the context of management's obligation to bargain over management-initiated changes" and that there is no allegation in the complaint in this case alleging that the Respondents failed to bargain "pursuant to [U]nion-initiated bargaining." Id.

The General Counsel also notes the Respondents' argument that there was no duty to bargain over the paycheck delivery proposal because Respondent EREC "had previously negotiated an agreement with the Union on this subject." Id. The General Counsel rejects this argument because: (1) "there is insufficient evidence to establish the existence of an agreement which is applicable to the EREC bargaining unit"; and (2) even assuming that EREC is bound by a supplemental agreement, it "would be an absurd position" to allow management to adversely affect employees by changing conditions of employment and then use a previous agreement on the subject to "preclude the Union from submitting proposals which would alleviate [the] adverse consequences" of the change. Id. at 21.

The General Counsel also rejects the Respondents' argument that "the fact that the actual pay lag at the time of the 1982 [s]upplemental [a]greement was not a part of the record is a relevant 'fact' in support of [the] exception." Opposition at 2. Rather, the General Counsel maintains that the "absence of that evidence is clearly irrelevant because the existence of the supplemental agreement is irrelevant." Id. According to the General Counsel, what is relevant is that "at the time of the change at issue the pay lag was changing from nine to twelve days." Id.

As to whether Respondent FAO violated the Statute, the General Counsel argues that the Judge properly found that FAO interfered with the bargaining relationship between EREC and the Union when it implemented the pay lag and pay period changes. In this regard, the General Counsel asserts that Respondent EREC "had a duty to bargain" over Proposal 2 and that "no exigency existed" requiring FAO to implement the changes by October 1987. Post-Hearing Brief at 28, 29.

With respect to the remedy recommended by the Judge, the General Counsel notes the Respondents' reference to the Back Pay Act but argues that "[n]ot all monetary remedies for unfair labor practices . . . are covered by the Back Pay Act." Opposition at 4. Specifically, the General Counsel notes that "monetary remedies not covered by the Back Pay Act are those involving official time and travel and per diem expenses related to union representational functioning." Id. (emphasis in original).

The General Counsel states that "the Back Pay Act is not a legal issue in the instant case[.]" Id. Instead, the General Counsel contends that "the Statute itself authorizes" the remedy in this case. Id. at 5. In this regard, the General Counsel notes that under section 7118(a)(7) of the Statute, the Authority may remedy an unfair labor practice through "a cease and desist order, a bargaining order, reinstatement in accordance with the Back Pay Act or 'such other action as will carry out the purpose of this chapter.'" Id. (emphasis in original). The General Counsel also argues that: (1) the Comptroller General has recognized that, in the context of an unfair labor practice case, "the Authority's remedial action may require the expenditure of appropriated funds, even without a formal finding of a violation"; and (2) the Authority has previously upheld monetary remedies "not arising from the Back Pay Act but authorized under the Statute as the result of unfair labor practice violations[.]" Id. at 6.

The General Counsel notes the Respondents' argument that actual harm to employees has not been identified, but contends that "the resolution of disputes arising over actual losses is a matter to be resolved during the compliance phase of the Statute's unfair labor practice procedures." Id. at 7. Further, the General Counsel distinguishes Customs Service, cited by the Respondents, by noting that the "commuting expenses [in that case] were found not to be reimbursable because they are specifically excluded by Federal travel laws and regulations." Id. at 9.

V. Analysis and Conclusions

A. Proposals 1 and 3

While no exceptions were filed with respect to the Judge's conclusions on Proposals 1 and 3, we specifically do not adopt the Judge's statement that the Authority would have found the substance of Proposal 1--seeking to establish a 4-day pay lag--to be nonnegotiable based on its decision in Fort Bliss. Contrary to the Judge's statement, the Authority specifically reversed its determination in Fort Bliss when it found proposals seeking to maintain a 6-day pay lag to be negotiable. See National Federation of Federal Employees and Naval Air Systems Command, Naval Plant Representative Office, St. Louis, Missouri, 38 FLRA 1191 (1990) (Naval Air Systems Command); and American Federation of Government Employees, Local 1698 and U.S. Department of the Navy, Naval Aviation Supply Office, Philadelphia, Pennsylvania, 38 FLRA 1016 (1990) (U.S. Department of the Navy).

As the Judge's statement does not affect his conclusion that the compelling need issues in Proposals 1 and 3 could not be resolved in a ULP proceeding, and in the absence of exceptions, we will adopt the Judge's conclusion that Proposals 1 and 3 are not properly before the Authority in this unfair labor practice proceeding. See Federal Labor Relations Authority v. Aberdeen Proving Ground, 485 U.S. 409 (1988) and FEMA.

B. Proposal 2

We agree with the Judge's conclusion that Respondent EREC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over Proposal 2, but for the following reasons.

In Internal Revenue Service, Washington, D.C., 39 FLRA 1568 (1991) (IRS), petition for review filed sub nom. Internal Revenue Service v. FLRA, No. 91-1247 (D.C. Cir. May 24, 1991) the Authority set forth the approach to be followed in cases involving an alleged statutory violation and allegations that a collective bargaining agreement permits the action that is alleged to constitute an unfair labor practice. The Authority reaffirmed that "[t]he established approach . . . to resolve defenses based on a collective bargaining agreement to alleged interference with statutory rights is to determine whether the charging party has clearly and unmistakably waived its statutory right." IRS, 39 FLRA at 1574.

Applying that analysis to Proposal 2 in this case, Respondent EREC had a duty to bargain over the impact and implementation of its decision to change pay procedures unless the Union clearly and unmistakably waived its right to bargain about those matters. See Department of the Navy, Marine Corps Logistics Base, Albany, Georgia, 39 FLRA 1060 (1991) (Marine Corps Logistics Base); U.S. Department of the Navy; and Naval Air Systems Command.(2)

According to the General Counsel, Proposal 2 addresses the impact and implementation of the Respondents' decision to change the pay lag. That is, Proposal 2 is meant to constitute a procedure for Respondent EREC to observe in exercising its authority or an appropriate arrangement for employees adversely affected by the exercise of the Respondent's authority under section 7106(b)(2) and (3) of the Statute. See Marine Corps Logistics Base, 39 FLRA at 1065.

As to whether the proposal relates to the changes in pay procedures, we adopt the Judge's conclusion that Proposal 2 sufficiently relates to the impact and implementation of the change in the pay lag. As found by the Judge, employees made numerous complaints of late paychecks and "[i]t is reasonable to conclude that lengthening this [pay lag] period would trigger employee concerns over where and how quickly they could have their checks in hand." Judge's Decision at 10. See U.S. Department of the Treasury, Customs Service, Washington, D.C. and Customs Service, Northeast Region, Boston, Massachusetts, 38 FLRA 770, 783-84 (1990) (U.S. Department of the Treasury).

As to whether the proposal is negotiable, we agree with the Judge's finding that the proposal does not directly interfere with management's rights to assign work and assign employees. The proposal does not require management to assign specific employees or to assign specific duties to particular employees. See National Federation of Federal Employees, Local 2099 and Department of the Navy, Naval Plant Representative Office, St. Louis, Missouri, 35 FLRA 362, 367-68 (1990). Moreover, as noted by the Judge, "the Agency's present policy on paycheck delivery contemplates that duties related to the hand delivery of paychecks will continue to be assigned to Agency personnel." Id. at 12. See Mare Island Naval Shipyard, 25 FLRA at 474 (proposal on paycheck distribution did not interfere with the agency's rights to assign employees or assign work where the agency's present policy contemplated that duties related to worksite pay delivery would continue to be assigned to agency personnel). Accordingly, we find that the proposal does not directly interfere with management's rights, but constitutes a negotiable procedure within the meaning of section 7106(b)(2) of the Statute.

We further find that the Union did not waive its statutory right to bargain over Proposal 2. We adopt the Judge's finding that the 1982 supplemental agreement applied to the Union's negotiations with EREC.(3) Moreover, we conclude that the agreement does not bar negotiating over Proposal 2.

The 1982 supplemental agreement provides, in part, that employees will have their paychecks "mailed to their designated mailing address or for credit to an account with a financial institution." General Counsel's Exhibit 7. The agreement further states that "[e]mployees experiencing 'genuine' hardship by the above requirement . . . may submit the facts to their servicing F&AO and request an exemption." Id. Contrary to the Respondents' assertion, nothing in the agreement states that there will no longer be worksite pay delivery. As noted above, the agreement provides for an exemption to the prescribed methods of pay delivery. The agreement did not eliminate worksite pay delivery. Under these circumstances, we find that the Union did not clearly and unmistakably waive its right to bargain about worksite pay delivery. See, for example, IRS (the union did not clearly and unmistakably waive its right to designate representatives); and U.S. Department of the Treasury, 38 FLRA at 784-85 (nothing in the plain wording of the agreement indicates that the union waived its right to bargain over proposed changes).

Accordingly, we conclude that the parties' 1982 supplemental agreement does not prevent bargaining over Proposal 2, a proposal addressing the impact and implementation of the change in the pay lag.

Further, because Respondent FAO implemented the pay changes before Respondent EREC fulfilled its bargaining obligation, we find that FAO interfered with the bargaining relationship between the Union and Respondent EREC in violation of the Statute. See Headquarters, Defense Logistics Agency, Washington, D.C., 22 FLRA 875 (1986) (entities of the same agency, but not in the same chain of command as the activity with exclusive recognition, violate section 7116(a)(1) of the Statute by taking action which conflicts with the bargaining relationship between the parties at the level of exclusive recognition). By interfering with the bargaining relationship between the Union and Respondent EREC, we conclude that Respondent FAO violated section 7116(a)(1) of the Statute.

C. Remedy

Sections 7105(g) and 7118 of the Statute vest the Authority with broad powers to remedy violations of the Statute. See generally National Treasury Employees Union v. FLRA, 910 F.2d 964 (D.C. Cir. 1990) (en banc). Specifically, section 7105(g)(3) provides that in carrying out its functions under the Statute, the Authority may "require an agency . . . to take any remedial action it considers appropriate to carry out the policies of this chapter." Further, section 7118(a)(7) specifies the remedies available in unfair labor practice cases and includes "such other action as will carry out the purposes of this chapter."

Pursuant to these provisions of the Statute, the Authority has previously ordered monetary reimbursement for losses that are not covered by the Back Pay Act when the losses resulted from the agency's unlawful action and when such reimbursement was not shown to be inconsistent with another law. See, for example, U.S. Department of Labor, Washington, D.C. and U.S. Department of Labor, Employment Standards Administration, Boston, Massachusetts, 37 FLRA 25, 41 (1990) (reimbursement was ordered for monies spent to pay for water coolers when the agency ceased providing water coolers without providing the union with notice and an opportunity to bargain about the change); Department of the Army, Dugway Proving Ground, Dugway, Utah, 23 FLRA 578 (1986) (reimbursement was ordered for increased expenses caused when employees at a remote station were illegally evicted from government housing).

In addition, the U.S. Court of Appeals for the District of Columbia Circuit has held that the Authority may grant make-whole relief to employees adversely affected by an agency's failure to bargain over the impact and implementation of a change in conditions of employment. Noting that the Authority's role in adjudicating unfair labor practice cases in the federal sector is similar to the National Labor Relations Board's role in the private sector, the court stated that there is "a weighty preference in favor of a direct grant of individualized 'make whole' relief--especially in the form of a monetary award--for losses actually suffered by employees." American Federation of Government Employees, SSA Council 220 v. FLRA, 840 F.2d 925, 930 (D.C. Cir. 1988).

As the Statute authorizes the Authority to exercise broad powers in remedying unfair labor practices and as the Respondents have cited no law precluding the Authority from granting the Judge's remedy in the circumstances of this case, we adopt the Judge's recommended remedy. We note that a direct causal connection has been established between the Respondents' unlawful action and the losses to employees. In this regard, the Judge credited testimony of the Union's Vice President that the implementation of the changes in pay procedures "caused some employees to miss their scheduled car or rent payments which resulted in late charges being assessed." Judge's Decision at 8. Therefore, in addition to providing for a cease and desist order, we will require Respondent FAO to reimburse employees for the increased costs that they incurred when Respondent FAO implemented the changes in pay procedures prior to the completion of bargaining on Proposal 2.

We reject the Respondents' argument that the remedy is contrary to the Back Pay Act or is otherwise inconsistent with law. As we noted above, the Authority has ordered monetary reimbursement for losses that are not covered by the Back Pay Act in situations where there was no showing that such reimbursement was inconsistent with another law. We also reject the Respondents' reliance on Comptroller General decisions stating that the United States Government may not reimburse employees for monetary losses when such payments were not authorized by statute or regulation. The Comptroller General decisions relied on by the Respondents do not apply to this case because, as we stated previously, reimbursing employees for their monetary losses in this case is consistent with the broad remedial powers authorized by the Statute.

Moreover, we note that 68 Comp. Gen. 220 (1989), cited by the Respondents, has been effectively overruled by the Thrift Savings Plan Technical Amendments Act of 1990, Pub. L. No. 101-335 (to be codified at 5 U.S.C. § 8432a). In 68 Comp. Gen. 220, the Comptroller General found that agencies were without authority to pay employees amounts for earnings lost from their Thrift Savings Accounts due to administrative error. However, the Thrift Savings Plan Technical Amendments Act of 1990 provides the statutory authority for payments by agencies of lost earnings from Thrift Savings Accounts due to agency error.

Finally, we note the Respondents' claim that the remedy is deficient because the Judge's decision contains no specific findings on damages. However, we agree with the General Counsel that disputes over actual losses to employees may be resolved during the compliance stage of the proceedings in this unfair labor practice case.

Accordingly, we adopt the Judge's remedy, except as modified below.(4)

VI. Order

A. Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Federal Service Labor-Management Relations Statute (the Statute), the Department of the Army, U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana shall:

1. Cease and desist from:

(a) Failing and refusing to negotiate in good faith with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of its employees, concerning procedures and appropriate arrangements for employees adversely affected by the changes in pay procedures.

(b) In any like or related manner, interfering with, restraining, or coercing its employees in the exercise of their rights assured by the Statute.

2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute:

(a) Upon request, negotiate in good faith with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of its employees, concerning procedures and appropriate arrangements for employees adversely affected by the changes in pay procedures.

(b) Post at its facilities at Fort Benjamin Harrison, Indiana copies of the attached Notice marked Appendix A on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Commanding Officer and shall be posted in conspicuous places, including all bulletin boards and other places where notices to employees are customarily posted, and shall be maintained for 60 consecutive days thereafter. Reasonable steps shall be taken to ensure that such Notices are not altered, defaced, or covered by any other material.

(c) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Chicago Region, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply.

B. Pursuant to section 2423.29 of our Rules and Regulations and section 7118 of the Statute, the Finance and Accounting Office for the Secretary of the Army, St. Louis, Missouri shall:

1. Cease and desist from:

(a) Interfering with the bargaining relationship between the American Federation of Government Employees, Local 1411, AFL-CIO, and the U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana by effecting changes in pay procedures at a time when the Activity and the Union had not completed bargaining on the procedures and appropriate arrangements for employees adversely affected by the changes in pay procedures.

(b) In any like or related manner, interfering with, restraining, or coercing employees of the U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana in the exercise of their rights assured by the Statute.

2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute:

(a) Reimburse unit employees for all monies lost or interest charged as a result of the changes in pay procedures that were effected at a time when negotiations on the changes in pay procedures had not been completed.

(b) Post at the facilities of the U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana, where bargaining unit employees represented by the American Federation of Government Employees, Local 1411, AFL-CIO are located, copies of the attached Notice marked Appendix B on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Director of the Finance and Accounting Office for the Secretary of the Army, St. Louis, Missouri and shall be posted in conspicuous places, including all bulletin boards and other places where notices to employees are customarily posted, and shall be maintained for 60 consecutive days thereafter. Reasonable steps shall be taken to ensure that such Notices are not altered, defaced, or covered by any other material.

(c) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Chicago Region, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply.

C. The portion of the complaint alleging that the Respondents violated the Statute by refusing to bargain with the Union over the substance of the changes in the scheduled pay day and in the pay lag is dismissed.

Appendix A

NOTICE TO ALL EMPLOYEES

AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY

AND TO EFFECTUATE THE POLICIES OF THE

FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE

WE NOTIFY OUR EMPLOYEES THAT:

WE WILL NOT refuse to negotiate in good faith with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of our employees, concerning procedures and appropriate arrangements for employees adversely affected by the changes in pay procedures.

WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce our employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.

WE WILL, upon request, negotiate in good faith with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of our employees, concerning procedures and appropriate arrangements for employees adversely affected by the changes in pay procedures.

U.S. Army Enlisted Records and 
Evaluation Center, Fort 
Benjamin Harrison, Indiana

(Activity)

Dated: By:

(Signature) (Title)

This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material.

If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Chicago Region, Federal Labor Relations Authority, whose address is: 175 West Jackson Boulevard, Suite 1359-A, Chicago, IL 60604, and whose telephone number is: (312) 353-6306.

Appendix B

NOTICE TO ALL EMPLOYEES

AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY

AND TO EFFECTUATE THE POLICIES OF THE

FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE

WE NOTIFY OUR EMPLOYEES THAT:

WE WILL NOT interfere with the bargaining relationship between the American Federation of Government Employees, Local 1411, AFL-CIO and the U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana by effecting changes in pay procedures at a time when the Activity and the Union had not completed bargaining on the procedures and appropriate arrangements for employees adversely affected by the changes in pay procedures.

WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce employees of the U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.

WE WILL reimburse unit employees for all monies lost or interest charged as a result of the changes in pay procedures that were effected at a time when negotiations on the changes in pay procedures had not been completed.

Finance and Accounting Office
St. Louis, Missouri

(Activity)

Dated: By:

(Signature) (Title)

This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material.

If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Chicago Region, Federal Labor Relations Authority, whose address is: 175 West Jackson Boulevard, Suite 1359-A, Chicago, IL 60604, and whose telephone number is: (312) 353-6306.




FOOTNOTES:
(If blank, the decision does not have footnotes.)

1. The alleged unlawful refusal of these other activities to bargain is the subject of our decision, issued today, in Department of the Army, U.S. Army Soldier Support Center, Fort Benjamin Harrison, Office of the Director of Finance and Accounting, Indianapolis, Indiana, 41 FLRA No. 77 (1991).

2. As noted above, under Naval Air Systems Command and U.S. Department of the Navy, the Authority found that an agency has the obligation to bargain over the substance and the impact and implementation of its decision to change pay procedures. However, Proposal 2 concerns only the impact and the implementation of the Respondents' decision to change pay procedures.

3. The General Counsel challenges the Judge's finding "credit[ing] the testimony of [the Respondents' representative] that the agreement does apply to EREC and has been applied to EREC since 1982." Judge's Decision at 4, n.2. The demeanor of witnesses is an important factor in resolving issues of credibility, and the Judge has had the benefit of observing the witnesses while they testified. We will not overrule a Judge's determination regarding credibility of witnesses unless a clear preponderance of all the relevant evidence demonstrates that the determination was incorrect. We have examined the record carefully and find no basis for reversing the Judge's credibility findings. See Department of Housing and Urban Development, Columbia, South Carolina, 21 FLRA 698 (1986).

4.