42:0166(11)AR - - Interior, Bureau of Reclamation, Grand Coulee Project Office and Columbia Basin Trades Council - - 1991 FLRAdec AR - - v42 p166



[ v42 p166 ]
42:0166(11)AR
The decision of the Authority follows:


42 FLRA No. 11

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

GRAND COULEE PROJECT OFFICE

(Agency)

and

COLUMBIA BASIN TRADES COUNCIL

(Union)

0-AR-1777

DECISION

September 13, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on exceptions to the interest arbitration award of Arbitrator Cornelius J. Peck filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Union filed an opposition to the Agency's exceptions.(*)

The Arbitrator was retained to resolve a dispute concerning the rates of pay to be established in the parties' agreement for certain prevailing rate employees who negotiate their pay and pay practices under section 704 of the Civil Service Reform Act of 1978 (CSRA), codified at 5 U.S.C. § 5343 (Amendments). After consideration of the evidence submitted by both parties, the Arbitrator issued a decision in which he analyzed the issues before him. He then issued a separate award in which he established the rates of pay for 23 job classifications for the parties' 1988-89 collective bargaining agreement. The Arbitrator retained jurisdiction in the matter "for the purpose of resolving any disputes concerning [the award's] meaning and application and for the purpose of correcting any arithmetical or factual errors concerning rates paid at other utilities, but not for the purpose of reconsidering my decision." Award at 4.

For the following reasons, we find that the Agency has failed to establish that the award is deficient because it is based on a nonfact. However, to the extent that the award requires the incorporation of a signing bonus in the calculation of base pay rates, the award is contrary to law. Therefore, the award is modified and remanded to the parties to establish pay and pay practices consistent with section 704(b) of the CSRA.

II. Background and Arbitrator's Award

The employees involved in this case are prevailing rate employees who negotiate their wages and premium pay provisions in accordance with section 704 of the CSRA and section 9(b) of the Prevailing Rate Systems Act (PRSA), codified at 5 U.S.C. § 5343 (Amendments, note).

The dispute concerned the rates of pay to be included in the parties' 1988-1989 collective bargaining agreement for a number of various job classifications of prevailing rate employees. When the parties were unable to reach agreement concerning the rates of pay for those job classifications, they agreed to submit the matter to arbitration. The parties agreed that "the pay rates established in [the arbitration] proceeding shall be retroactive to the expiration date of the former agreement, or from the first pay period thereafter[.]" Award at 2.

"After full consideration of the evidence and arguments" presented by the parties, the Arbitrator set the rates of pay for 23 job classifications of general craft employees. Id. In establishing the base rates for several classifications of general craft employees, the Arbitrator considered a 4 percent signing bonus given to employees of two public utility districts used by the parties to determine current industry practices. Decision at 10-11. As to the bonus, the Arbitrator stated:

Because it does not become a part of an employee's wage base[,] a signing bonus does not have a value equivalent to that of a permanent increase in the rate of pay. I therefore conclude that it would be inappropriate to consider the 4 percent signing bonus as an addition to base pay for employees of the Chelan and Grant County public utility districts. On the other hand, it would not be appropriate to give it no consideration in making wage comparisons. It was cash received by those employees. . . . The matter is not one capable of precise determination, but I conclude that at least half of the bonuses should be considered for comparison purposes.

Id. at 11. Accordingly, the Arbitrator granted certain employees of the Chelan and Grant County public utility districts a 2 percent increase in their rates of pay.

III. Preliminary Issue

The parties agreed to adopt a procedure for binding arbitration of their negotiation impasse concerning the rates of pay of certain bargaining unit employees. The Agency filed exceptions under section 7122(a) of the Statute to the award issued pursuant to those proceedings. Neither party disputes the Authority's jurisdiction to resolve the exceptions to the interest arbitration award in this case. We find, consistent with our recent decisions in U.S. Department of Defense, Dependents Schools, Alexandria, Virginia and Overseas Education Association, 41 FLRA No. 78 (1991) and U.S. Department of Interior, Bureau of Reclamation, Lower Colorado Region, Yuma, Arizona and National Federation of Federal Employees, Local 1487, 41 FLRA 3 (1991), that the appropriate mechanism for challenging this interest arbitration award, which resulted from the voluntary agreement of the parties under section 704, is through the filing of exceptions under section 7122 of the Statute. Like an interest arbitration award issued under section 7119(b)(2) of the Statute, the award in this case is voluntary and constitutes binding arbitration reviewable by the filing of exceptions under section 7122(a). Therefore, we will resolve the Agency's exceptions in this case.

IV. First Exception

A. Positions of the Parties

The Agency contends that the award is deficient because "the central fact underlying that part of the award granting certain general craft employees a two percent increase in wage rates is concededly erroneous and in effect is a gross mistake of fact but for which a different result would have been reached." Exceptions at 1. The Agency contends that cash bonuses are not part of the wage base for employees and states that the parties' testimony "is clear and undisputed that the 4 percent signing bonus was paid to the general craft employees at the Chelan and Grant County [public utility districts] in a lump sum and that this bonus did not become a part of their base salary which would follow through to the following year." Id. at 6 (emphasis in original). The Agency argues that because the Arbitrator calculated the signing bonus in the base pay rates of the general craft employees, the central fact underlying the Arbitrator's award granting the 2 percent increase in base rates is concededly erroneous. The Agency asserts that "[i]t is based on a gross mistake of fact that the 4 percent signing bonus was made part of the base rates for the Grant and Chelan general craft employees when the testimony indisputably demonstrates otherwise." Id. at 7.

The Union contends that the Agency's exception that the Arbitrator "made a 'gross mistake of fact'" is "founded on a mis-characterization of the [A]rbitrator's reasoning and decision." Opposition at 6. The Union argues that the exception is nothing more than disagreement with the Arbitrator's findings, reasoning, conclusions and with his application of the parties' collective bargaining agreement. The Union maintains that the Arbitrator "made no mistake of fact." Id.

B. Analysis and Conclusions

We interpret the Agency's first exception as a contention that the award is deficient because the award is based on a nonfact and conclude that the Agency has failed to establish that the award is deficient on that ground.

In order to show that an arbitrator's award is deficient because it is based on a nonfact, the asserting party must show that the central fact underlying the award is concededly erroneous, a gross mistake of fact, and that but for the arbitrator's reliance upon that fact, a different result would have been reached. See, for example, Norfolk Naval Shipyard and Tidewater Virginia Federal Employees Metal Trades Council, 34 FLRA 230 (1990) (Norfolk Naval Shipyard).

The Agency asserts that "[i]t is a gross mistake of fact that the 4 percent signing bonus was made part of the base rates for the Grant and Chelan general craft employees when the testimony indisputably demonstrates otherwise." Exceptions at 7. However, the Arbitrator specifically stated: "I . . . conclude that it would be inappropriate to consider the 4 percent signing bonus as an addition to base pay for employees of the Chelan and Grant County public utility districts." Decision at 11. Thus, the record demonstrates that the Arbitrator did not find that the 4 percent signing bonus was a part of the base rates for employees of the Chelan and Grant County public utility districts. He found only that the bonus was a relevant aspect of compensation for consideration "in making comparisons of wages received by employees for comparable work." Id. The Agency has not shown that the Arbitrator's finding is concededly erroneous or that it is based on a gross mistake of fact. The Agency is only disagreeing with the Arbitrator's reasoning and his conclusions based on that reasoning. This disagreement does not provide a basis for finding the award deficient. See Norfolk Naval Shipyard, 34 FLRA at 233.

V. Second Exception

A. Positions of the Parties

The Agency contends that the Arbitrator's award is contrary to law because the Arbitrator improperly considered a one-time 4 percent bonus when he awarded employees an increase in pay rates. The Agency states that "[b]y requiring that the basic rates for general craft employees be increased by 2 percent representing one-half of a 4 percent signing bonus to comparable utility employees, . . . the Arbitrator's decision and award is contrary to the requirements of section 704 and is thereby invalid." Exceptions at 9. The Agency argues that the award of a 2 percent increase in unit employees' base rates based on a "one-time signing bonus" given to comparable utility employees which, as a matter of practice, did not increase those employees' basic rates of pay, "violates the prevailing rate principle embodied in section 704." Id. at 10. In its supplemental submission, the Agency argues that the Authority's decision in Bureau of Reclamation, Billings Montana, 39 FLRA 1376 (1991) supports its position that inclusion of the signing bonus in basic wages is contrary to law.

The Union contends that the Agency's argument that the award is contrary to section 704 lacks merit. The Union states that "[t]he bonus undeniably is a method followed in the industry for compensating employees. As such, it is a 'pay practice' within the meaning of Section 704(b) and must be negotiated." Opposition at 7-8. According to the Union, the Arbitrator properly determined that "the bonus deserved some consideration." Id. at 7. The Union maintains that "[i]n setting wages for grandfathered employees, the [A]rbitrator was justified in considering the compensation practices of the comparison utilities, not merely the base pay rates taken out of their total context." Id. at 8. The Union asserts that the Agency's "attempt to restrict the [A]rbitrator's authority to consider all pertinent compensation practices at comparison utilities cannot be squared with [section 704's broad purpose favoring bargaining]." Id.

B. Analysis and Conclusions

Under section 704(b), pay and pay practices for prevailing rate employees must be negotiated in accordance with prevailing rates and practices in the industry. If a pay practice is not among the current practices in the industry, the parties are not obligated to negotiate over that subject. However, if the pay practice has some place in current industry practice, then the parties must negotiate over the subject. United States Information Agency v. FLRA, 895 F.2d 1449, 1451 (D.C. Cir. 1990) (USIA v. FLRA).

As the Arbitrator pointed out in his decision, "[f]rom at least the 1960s, the Employer and the Union have negotiated wage rates by surveying wages of eight governmentally and privately owned public utilities in Washington and Oregon." Decision at 5. During negotiations under section 704(b) for their 1988-1989 collective bargaining agreement, the parties could not reach agreement concerning the pay rates for certain job classifications. The parties submitted their dispute to the Arbitrator and agreed to include the pay rates established in the arbitration proceeding in their collective bargaining agreement. The Arbitrator considered the local industry compensation practices and, based on the prevailing practices, determined the pay of bargaining unit employees.

Specifically, the Arbitrator determined that in the Grant and Chelan public utility districts, a 4 percent signing bonus was paid to comparable public utility employees in the industry. However, the Arbitrator found that the 4 percent bonus "does not become a part of an employee's wage base" and "does not have a value equivalent to that of a permanent increase in the rate of pay." Decision at 11. Nevertheless, the Arbitrator determined that the 4 percent signing bonus should be calculated, to some extent, into the base pay rates for certain craft bargaining unit employees because the bonus was part of the total compensation paid other craft employees in Chelan and Grant County by their public utility employers. The Arbitrator ordered the parties to compute the base pay rates for certain craft bargaining unit employees by using, as part of the data for that computation, the base pay rates of comparable employees of the Grant and Chelan public utility districts, increased by 2 percent to compensate for the 4 percent signing bonus.

By agreement of the parties, the public utility districts constitute the relevant "industry" within the meaning of section 704(b) for determining current industry practice. The Arbitrator determined that it was not the practice in the public utility districts to consider the signing bonus as part of employees' base pay rates. In light of that determination, the Arbitrator violated section 704(b) when he required the parties to establish the base pay rates of unit craft employees by calculating the signing bonus into those base pay rates. The effect of the Arbitrator's award is to require the parties to set the base pay rates of unit employees in a manner that is not consistent with the current practice in the industry for setting base pay rates. Because the Arbitrator's award requires the parties to establish base pay rates in a manner that is inconsistent with current pay practices the Arbitrator found to exist in the industry, the award is contrary to section 704(b). See Bureau of Reclamation, Billings, Montana, 39 FLRA at 1380 (because there was no evidence that the practice of including bonuses in basic wage rates existed at all within the industry surveyed by the parties, the Union's proposal to institute a practice of including a bonus paid by an industry company in the base rate for that company when the parties calculate the basic wage rates for the prevailing rate employees was not negotiable under section 704(b) of the CSRA). Accordingly, we conclude that to the extent that the Arbitrator's award requires the incorporation of a signing bonus in the calculation of base pay rates, it is contrary to law and, therefore, is deficient under section 7122(a) of the Statute.

The Arbitrator determined that a 4 percent signing bonus for certain craft employees was paid to employees in the Grant and Chelan public utility districts. We have found that the Arbitrator applied that pay practice in a manner inconsistent with section 704(b) by incorporating the bonus as a 2 percent increase in the base pay rates used to calculate the pay rates of bargaining unit employees. However, inasmuch as: (1) the Arbitrator has found that the 4 percent signing bonus is a prevailing practice in the relevant industry; and (2) the parties must establish pay and pay practices in accordance with prevailing rates and practices, the parties must determine how the prevailing practice of a 4 percent signing bonus shall be applied to the pay practices of bargaining unit employees.

We will remand the award to the parties to establish the base pay rates of bargaining unit employees consistent with section 704(b) of the CSRA and to determine how the prevailing practice found by the Arbitrator to exist in the Grant and Chelan public utility districts shall be applied to the pay practices of bargaining unit employees. On remand, the parties may resubmit the award to the Arbitrator to determine the appropriate base rate and pay practices for the craft employees described in paragraphs 7, 8, 9, 10, 11, 14, 15 and 20 of the Arbitrator's award and for all other prevailing rate employees whose pay rates were established under the award using the 2 percent increase to base pay rates; or the parties may negotiate, consistent with section 704(b), to establish the pay and pay practices for the employees.

Because of our conclusion, we will not address the Agency's additional arguments in support of its contention that the award is inconsistent with section 704(b).

VI. Decision

The Arbitrator's award is modified by setting aside paragraphs 7, 8, 9, 10, 11, 14, 15 and 20 of the award and any other rates of pay or formulas for setting rates of pay that were established by increasing the rates for Grant and Chelan County public utility districts by 2 percent in accordance with the award. The award is remanded to the parties to establish the pay and pay practices consistent with the remaining portions of the A