42:0820(55)AR - - Interior, Bureau of Reclamation, MO Basin Region and IBEW Local 1759 - - 1991 FLRAdec AR - - v42 p820



[ v42 p820 ]
42:0820(55)AR
The decision of the Authority follows:


42 FLRA No. 55

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

MISSOURI BASIN REGION

(Agency)

and

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS

LOCAL 1759

(Union)

0-AR-1889

DECISION

October 10, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on an exception to a supplemental award of Arbitrator John Phillip Linn 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 exception.(1)

The grievance alleged that the Agency violated the parties' collective bargaining agreement by unilaterally terminating 25 percent Sunday premium pay without bargaining on the issue. The Arbitrator issued an initial award in which he deferred a decision on the grievance pending the issuance of a decision in a case before the United States Court of Appeals for the Tenth Circuit. However, pursuant to the Union's unopposed request for a final award, the Arbitrator issued a supplemental award in which he held that the Agency's termination of Sunday premium pay, without bargaining on the issue, was improper under section 704 of the Civil Service Reform Act of 1978 (CSRA), codified at 5 U.S.C. § 5343 (Amendments). The Arbitrator ordered the Agency to reinstate the 25 percent Sunday premium pay. The Arbitrator retained jurisdiction to resolve any disputes concerning the implementation of the award.

For the following reasons, we find that the Agency has failed to establish that the award is deficient. Therefore, we will deny the exceptions.

II. Background and Arbitrator's Awards

The employees involved in this case 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 current General Labor Agreement (Agreement) between the parties was originally executed in 1960. Pursuant to Article V of the Agreement, changes in the Agreement may be negotiated on an annual basis. The parties' Supplementary Labor Agreement No. 2 contains a provision for Sunday premium pay.(2)

On February 17, 1987, the Agency notified the Union of its intention to negotiate wages and premium pay and of its desire to discontinue pay practices established by Supplementary Labor Agreement No. 2 that are "non-prevailing." Initial Award at 3. Prior to beginning formal negotiations on wages and premium pay, the parties established a joint factfinding committee "to gather relevant pay and premium data to be used by the Negotiating Committee in determining prevailing rates of pay and other prevailing pay practices." Id. At a meeting on March 31, 1987, the parties agreed that none of the representatives was able to locate area companies that paid Sunday premium pay.

On June 11, 1987, the Agency notified the Union of its decision to unilaterally terminate Sunday premium pay effective July 5, 1987. The Agency also informed the Union that it could request impact and implementation bargaining.

The Union filed a grievance alleging that the Agency's unilateral termination of Sunday premium pay constituted a breach of the parties' collective bargaining agreement. The Agency denied the grievance on the ground that "Sunday premium pay was illegal and had to be discontinued because it was not based upon 'prevailing industry practice' as required by [s]ection 704." Id. at 4. The parties agreed to submit the matter to arbitration on a joint statement of stipulated facts with exhibits and without a hearing.

In his initial award, the Arbitrator stated that the Union's claims "appear covered within the language of Section 8.2" of the Agreement.(3) Id. at 12. Based on the Agreement, the Arbitrator found that the grievance was grievable and arbitrable. On the merits, the Arbitrator found that the issues in the case "are a matter of interpretation of law that appears unsettled." Id. at 18. The Arbitrator cited Department of the Interior, Bureau of Reclamation, Rio Grande Project v. FLRA, No. 87-2483 (reported at 908 F.2d 570 (10th Cir. 1990)) (Rio Grande Project v. FLRA), which was pending before the United States Court of Appeals for the Tenth Circuit at the time of the arbitration proceeding. The Arbitrator stated that "[a]lthough the Arbitrator has the authority to interpret and apply the law as well as the collective [bargaining] agreement, the Arbitrator believes the exercise of that authority at this time would serve no useful function[]" because "the pending decision of the court will most likely resolve the subject dispute." Initial Award at 18. The Arbitrator remanded the grievance to the parties for reconsideration in view of an expected decision in Rio Grande Project v. FLRA. He retained jurisdiction "to resolve any disputes that may remain under the issues submitted to [the Arbitrator.]" Id. at 18.

Upon receipt of the initial award, the Union advised the Arbitrator that the award "failed to comply with the contractual provision that the Arbitrator render a final and binding decision on the stipulated issues submitted to him." Supplemental Award at 1. The Agency did not respond to the award or to the Union's submission to the Arbitrator. The Arbitrator stated that he "assumed that the Agency share[d] the Union's view that the Arbitrator is obligated to render a final Award, rather than remand the two issues to the parties." Id. The Arbitrator concluded that "[c]onsequently, this Supplemental Opinion and Award is rendered pursuant to the Arbitrator's obligation under the parties' General Labor Agreement." Id.

In his supplemental award, the Arbitrator held that the Agency's "unilateral termination of Sunday premium pay, without bargaining on the issue, was improper under section 704[.]" Id. at 4. The Arbitrator rejected the Agency's argument that section 9(b) of the PRSA and section 704 of the CSRA "cover[] only those specific pay and pay practices that were included in the parties' collective contract as of August [19], 1972[,]" which is the date set forth in section 704 of the CSRA. Id. at 2 (emphasis in original). The Arbitrator also rejected the Agency's contention that Sunday premium pay was illegal and could not be paid "in the absence of a prevailing practice of Sunday premium pay in the private sector of the local area[.]" Id. The Arbitrator found that the decision of the United States Court of Appeals for the Ninth Circuit in United States Department of the Interior, Bureau of Indian Affairs, Yakima Agency and Wapato Irrigation Project v. FLRA, 887 F.2d 172 (9th Cir. 1989) (Bureau of Indian Affairs v. FLRA) "does not convincingly establish that the FLRA erroneously interpreted [section 704 of the CSRA]." Supplemental Award at 4. In this regard, the Arbitrator stated that his review of the relevant provisions of law and their legislative history satisfied him "that deference to the Authority's interpretation of the law is most appropriate." Id.

As a remedy for the Agency's improper unilateral termination of Sunday premium pay, the Arbitrator ordered the Agency "to reinstate the 25% Sunday premium pay differential to all bargaining unit employees who performed non-overtime work on Sunday after the discontinuance of such Sunday premium pay differential." Id. He retained jurisdiction "to resolve any and all disputes that arise in the implementation of this award." Id.

III. Positions of the Parties

A. Agency's Exceptions

The Agency contends that the Arbitrator's supplemental award is deficient because it is contrary to section 704 of the CSRA. The Agency maintains that the Arbitrator's conclusion "that the Agency acted improperly under section 704 in terminating Sunday premium pay without bargaining with the Union" is contrary to law. Exceptions at 7.

The Agency states that in United States Information Agency, Voice of America v. FLRA, 895 F.2d 1449 (D.C. Cir. 1990) (USIA v. FLRA), "the [c]ourt held that, under section 704(b), a pay practice must be a current practice in the industry in order to be negotiable." Id. at 5. The Agency notes that under the court's decision in USIA v. FLRA, it is the Authority's role to decide whether a practice is negotiable because it is in accordance with prevailing rates and pay practices. However, the Agency contends that because the parties in the instant case agreed that Sunday premium pay is not a prevailing industry practice, "the Agency was justified in unilaterally terminating this pay practice without bargaining with the Union." Exceptions at 7. The Agency maintains that the Arbitrator's conclusion that the Agency was not justified in terminating Sunday premium pay is contrary to the court's decision in USIA v. FLRA. The Agency argues that "the Arbitrator's interpretation of section 704 is contrary to its plain meaning because the plain mandatory language of section 704 requires that pay and pay practices 'shall' be negotiated in accordance with prevailing pay and pay practices." Id. at 8 (emphasis in original).

The Agency argues that the background and legislative history of section 704 show that Congress intended bargaining under section 704 to include only pay practices previously negotiated which are prevailing in the local private sector of the Agency's operations. The Agency asserts that "[t]he legislative history of section 704 clearly shows that the prevailing practice requirement was included in [section 704 of the CSRA] to enable the Departments of Interior and Energy to compete in the private labor market by following private labor practices in the local area." Id. at 14. The Agency states that "even if payment of Sunday premium pay had been a past practice or included in the agreement, such payment is not valid under section 704 if it is not based upon prevailing industry practices." Id. at 17. The Agency argues that "[s]ince the parties agreed it is not prevailing, Sunday premium pay is illegal under section 704 and was properly discontinued by the Agency." Id. (citation omitted). The Agency also argues that "[t]he legislative history of section 704 provides ample evidence that the term, 'prevailing pay and pay practices' refers only to those practices that are prevailing in the 'private sector of the economy' and not to the pay practices of other [F]ederal employees by virtue of their statutory entitlement." Id.

Finally, the Agency contends that the Arbitrator erred in rejecting the position of the U.S. Court of Appeals for the Ninth Circuit in Bureau of Indian Affairs v. FLRA, 887 F.2d at 176, "that the critical factor under section 704 was the kind of wages that were the subject of previous bargaining and not the fact that wages generally had been negotiated." Exceptions at 19. The Agency argues that the Ninth Circuit's decision in Bureau of Indian Affairs v. FLRA is relevant to this case because "there are no facts in the stipulation to show that Sunday premium pay was the specific subject of negotiation prior to August 19, 1972." Id.

B. Union's Opposition

The Union contends that the Agency's exceptions constitute nothing more than disagreement with the Arbitrator's reasoning and conclusions and, therefore, do not constitute a basis for setting aside the Arbitrator's award. The Union asserts that "the Arbitrator's interpretation of Section 704 does not render its language 'devoid of meaning,' but appropriately gives this language full force and effect." Opposition at 2.

The Union argues that section 704 of the CSRA "does not sanction the unilateral termination of a long-standing contractual pay practice." Id. The Union asserts that "[t]he unilateral termination of an acknowledged long-standing contractual pay practice contravenes Congress' primary purpose of preserving existing collective bargaining relationships through enactment of Section 704." Id. at 8-9 (citations omitted). The Union states that the Agency's argument concerning prevailing practice "ignores the most important language of Section 704, i.e., that 'pay and pay practices . . . shall be negotiated in accordance with prevailing rates and practices . . . .' The entire emphasis of this statutory provision is the requirement that pay and pay practices for 'negotiated rate' employees continue to be negotiated." Id. at 9 (emphasis in original, citation omitted).

With regard to the role of the joint fact-finding committee in negotiating wages, the Union states:

As the parties stipulated, "negotiated rate" employees' wages are not "unilaterally set by [the Agency] after a survey of prevailing rates," but are "negotiated after considering prevailing rate surveys performed in accordance with Article V of the Labor Agreement." Section 5.2 of Article V provides that a "joint fact-finding committee" shall establish "relevant facts bearing on the determinations of rates of pay," and that "consideration shall be given by the [Agency] and the Union in their negotiations to any facts so established."

Id. (emphasis in original, citations omitted). The Union argues that the parties' agreement requires only that consideration be given to data collected by the fact-finding committee "and does not mandate that negotiated pay practices strictly conform to such information collected." Id.

The Union asserts that the only way the parties can eliminate the contractual Sunday premium pay differential is through collective bargaining. The Union argues that the absence of a Sunday premium pay practice in the local area "does not negate the Agency's duty to bargain on this issue and certainly cannot be used to justify a blatant violation of the parties' Labor Agreement." Id. at 13. The Union states that in the absence of agreement provisions setting forth the Agency's duty to bargain on the subject of Sunday premium pay, "[a]t the very least, [5 U.S.C. § 5544(a) and § 5546(a)] establish payment of a Sunday premium differential as a 'prevailing practice' among all Section 9(b) employees and, thus, justify the continuation of this practice unless properly eliminated through collective bargaining negotiations pursuant to Section 704." Id. at 14.

The Union disputes the Agency's argument that Sunday premium pay is nonnegotiable because "there are no specific facts in the stipulation to show that Sunday premium pay was the specific subject of negotiation prior to August 19, 1972." Exceptions at 19. The Union maintains that Sunday premium pay is protected by section 704, even if the stipulated facts do not establish that Sunday premium pay was specifically negotiated prior to August 19, 1972. The Union states that the parties have a "long-standing practice 'since at least 1960' of negotiating pay and pay practices." Id. at 17. The Union asserts that "this long-standing subject of negotiation" cannot be interpreted "so narrowly as to exclude" Sunday premium pay. Id. at 18.

The Union argues that Sunday premium pay is negotiable for section 704 employees so that those employees can maintain equity with other employees who receive Sunday premium pay. The Union contends that the Ninth Circuit's decision in Bureau of Indian Affairs v. FLRA is not applicable to this case because the Authority adopted that decision only as the law of the case in National Federation of Federal Employees, Local 341 and U.S. Department of Interior, Bureau of Indian Affairs, Yakima Agency and Wapato Irrigation Project, 35 FLRA 262 (1990). The Union maintains that the Agency's contention that the award is contrary to law constitutes mere disagreement with the Arbitrator's conclusion that the Agency's unilateral termination of Sunday premium pay violated the collective bargaining agreement.

IV. Analysis and Conclusions

For the following reasons, we find that the Agency has failed to show that the Arbitrator's award is contrary to law. Accordingly, the Agency's exceptions will be denied.

In U.S. Department of Interior, Bureau of Reclamation, Lower Colorado Dams Project Office, Parker and Davis Dams and International Brotherhood of Electrical Workers, Local 640, 41 FLRA 119 (1991) (Lower Colorado Dams Project Office I), we held that parties that properly negotiate an agreement concerning pay and pay practices under section 704 are bound by the terms of that agreement for the life of the agreement. We also concluded, contrary to the agency's position, that the current prevailing practices had no effect on the existing contract provision for the life of the parties' contract, but would have to be considered when the parties negotiated new pay and pay practice provisions.

We clarified our conclusion in Lower Colorado Dams Project Office I in our decision denying reconsideration of that decision. U.S. Department of Interior, Bureau of Reclamation, Lower Colorado Dams Project Office, Parker and Davis Dams and International Brotherhood of Electrical Workers, Local 640, 42 FLRA 76 (1991) (Lower Colorado Dams Project Office II) (order denying motion for reconsideration). We explained that, in Lower Colorado Dams Project Office I, we enforced a lawful agreement concerning pay and pay practices which was negotiated by the parties in accordance with section 704. Because the parties had negotiated a lawful agreement concerning pay and pay practices, the parties were bound by the terms of their agreement for as long as the agreement remained in effect. We also explained that our conclusion in that case is distinguishable from our decision in U.S. Department of Interior, Colorado River Storage Project and International Brotherhood of Electrical Workers, Local 2159, 36 FLRA 283 (1990) (Colorado River Storage Project), where we held that the agency could terminate a pay practice under section 704. We stated that, in Colorado River Storage Project, the record demonstrated that the pay practice provision in the collective bargaining agreement enforced by the arbitrator was not established in accordance with section 704 and that the provision was, therefore, void ab initio and unenforceable.

Our decision in Lower Colorado Dams Project Office I established that, under section 704, current prevailing practices have no effect on an existing contract provision for the life of the parties' contract. That decision also established two general rules with regard to the termination of agreement provisions negotiated under section 704 during the life of the agreement: (1) if parties properly negotiate an agreement concerning pay and pay practices under section 704, they are bound by the terms of that agreement for the life of the agreement; and (2) where it is demonstrated that a pay or pay practice provision of a collective bargaining agreement was not negotiated and agreed to, at the outset, in accordance with section 704, the provision is contrary to section 704 and, therefore, is unenforceable.

A. The Arbitrator's Award Is Consistent with Law Because It Concerns a Matter About Which the Parties Had Bargained Prior to August 19, 1972

The Agency contends that because "there are no facts in the stipulation to show that Sunday premium pay was the specific subject of negotiation prior to August 19, 1972[,]" Sunday premium pay is not currently negotiable under section 704. Exceptions at 19. For this reason, the Agency claims that the award is deficient. We find that the Agency has not established that Sunday premium pay is a matter about which the parties had not bargained prior to August 19, 1972. Therefore, we reject the Agency's claim that the award is deficient.

The parties did not stipulate that Sunday premium pay was negotiated between the parties prior to August 19, 1972.  The parties did stipulate, however, that the Agency and the Union "have enjoyed a long-standing collective bargaining relationship since at least 1960, when the current General Labor Agreement . . . between the parties was originally executed." Attachment A to Union's Opposition at 1. Article V, Section 5.1 of the parties' General Labor Agreement provides that "[t]he rates of pay . . . affecting employees covered by this agreement shall be determined through the process of collective bargaining between the Union and the [Agency]." Exhibit A to Union's Opposition at 5. In addition, the parties stipulated that the Supplementary Labor Agreement No. 2, which was negotiated in accordance with Article V of the parties' General Labor Agreement, contains a provision providing for Sunday premium pay. See Attachment A to Union's Opposition at 2. See also Exhibit B to Union's Opposition at 1.

The parties also stipulated that "the Arbitrator may not consider any facts other than those contained in [the] Stipulation[.]" Attachment A to Union's Opposition at 3. The parties further stipulated that "the only issues presented to the Arbitrator for resolution are" the three issues listed in the parties' joint stipulation. Id. at 3-4. Whether the parties negotiated concerning Sunday premium pay prior to August 19, 1972, was not addressed in the stipulated facts and was not one of the issues stipulated by the parties before the Arbitrator. Because the parties specifically precluded the Arbitrator from considering facts not in the parties' stipulation and limited the Arbitrator's jurisdiction to the issues stipulated by the parties, the Arbitrator's award is not deficient on the basis that it does not address the issue of whether the parties negotiated about Sunday premium pay prior to August 19, 1972.

Moreover, the Agency has failed to demonstrate that the subject of Sunday premium pay was not negotiated by the parties prior to August 19, 1972. In fact, the Agency does not even assert that the parties did not negotiate Sunday premium pay prior to August 19, 1972. Rather, the Agency argues only that "there are no facts in the stipulation to show that Sunday premium pay was the specific subject of negotiation prior to August 19, 1972." Exceptions at 19. Without further evidence in the record, the mere absence of a stipulation by the parties that Sunday premium pay was negotiated prior to August 19, 1972, does not establish that, in fact, Sunday premium pay was not so negotiated. The Agency has presented no evidence establishing that the subject matter of the grievance was not the subject of negotiations between the parties prior to that date. Consequently, the Agency's reliance on the decision of the Ninth Circuit in Bureau of Indian Affairs does not provide a basis for concluding that the award is deficient. Moreover, because the Agency has not demonstrated that the subject matter of the grievance was not the subject of negotiations between the parties prior to August 19, 1972, the decision of the Tenth Circuit in Rio Grande Project v. FLRA, 908 F.2d 570 (10th Cir. 1990), does not provide a basis for concluding that the award is deficient.

Consequently, we conclude that the Agency has not demonstrated that the Arbitrator's award is deficient under section 704 because it concerns a matter about which the parties had not bargained prior to August 19, 1972.

B. The Arbitrator's Award Is Not Deficient under Section 704(b)

An agency is justified under section 704(b) in terminating an existing pay provision if it can show that the pay practice in question was not the current practice in the industry at the time the existing agreement was negotiated. Lower Colorado Dams Project Office II. In presenting this case to the Arbitrator, the parties made the following stipulation concerning the payment of Sunday premium pay at local area companies:

Prior to the beginning of formal negotiations [for a new agreement] in 1987, a Joint Factfinding Committee was established to gather relevant pay and premium data to be used by the Negotiating Committee in determining prevailing rates of pay and other prevailing pay practices. At a March 31, 1987 meeting between management and Union representatives of this Committee it was agreed that none of the representatives were able to locate area companies that paid Sunday premium pay.

Exceptions, Attachment A, Joint Statement of Stipulated Facts (Stipulation) at 3. Based on the data gathered by the Factfinding Committee, the Agency determined that Sunday premium pay is not a prevailing practice and unilaterally terminated the payment of Sunday premium pay under the existing agreement. The Arbitrator concluded that the Agency's termination of Sunday premium pay, without bargaining, on the basis that the practice was not a prevailing industry practice in the local area companies, was "improper under provisions of section 704." Supplemental Award at 2. We find that the Arbitrator's conclusion is not contrary to law.

The parties' stipulation that none of their representatives were able to locate area companies that paid Sunday premium pay does not relieve the Agency of its obligation to pay Sunday premium pay in accordance with the parties' collective bargaining agreement. The stipulation concerns the prevailing practices at the point at which the parties were negotiating for a new agreement. The stipulation does not concern the practices at the point at which the parties were negotiating the existing agreement. "Although the current prevailing practices are relevant to determine whether parties 'shall' negotiate pay and pay practices under section 704(b), they have no effect on the pay and pay practice provisions of an existing collective bargaining agreement." 41 FLRA at 129 (emphasis in original). Once the parties have negotiated a lawful agreement--providing that Sunday premium pay would be paid under the existing agreement until a new agreement was reached--the parties are bound by the terms of that agreement. Thus, the Agency's obligation to pay Sunday premium pay under the existing agreement was not affected by the findings of the factfinding committee concerning current industry practices in area companies at the time of negotiations for a new agreement.

The Agency has not demonstrated that the pay practice in question was not a practice in the industry at the time the existing agreement was negotiated. The information in the parties' stipulation and the record concerning industry practices addresses only current industry practices and does not concern the practices at the point at which the parties were negotiating the existing agreement. Consequently, we find that neither the parties' stipulation nor the record as a whole demonstrates that the Sunday premium pay provision in the parties' agreement was not established in accordance with section 704 and, therefore, is void ab initio and unenforceable. Compare Colorado River Storage Project, 36 FLRA 283 (1990).

Because it has not been established that the Sunday premium pay provision in the parties' existing agreement is unenforceable, the Agency is required to continue Sunday premium pay under that agreement until the parties have completed their negotiations concerning the payment of Sunday premium pay under the new agreement. We agree with the Arbitrator that the Agency was not justified in unilaterally terminating Sunday premium pay under the existing agreement before it completed bargaining over the subject as required under the parties' collective bargaining agreement. Therefore, we deny the Agency's exception that the Arbitrator's conclusion in that regard is contrary to law.

V. Decision

The Agency's exceptions are denied.

APPENDIX

The Sunday premium pay provision in Supplementary Labor Agreement No. 2 provides:

SECTION 2--PREMIUM PAY

SECTION 2.1--Employees who have a regular tour of duty which included any of those hours falling between midnight Saturday and midnight Sunday shall be paid for each hour of regularly scheduled work, not to exceed eight hours, at the basic hourly rate of compensation plus premium pay equal to 25 percent of the basic hourly rate.

Initial Award at 8. See also Exceptions, Exhibit B at 3.

Section 8.2 of the parties' Basic Agreement provides, in relevant part:

A grievance means any complaint:

. . . .

C. By any bargaining unit employee, the Union, or the [Agency] concerning:

1. The application, interpretation, working conditions, or a claim of breach of this Agreement[.]

Initial Award at 7. See also Exceptions, Exhibit A at 8.




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

1. The Agency and the Union filed supplemental submissions pursuant to 5 C.F.R. § 2429.26 of the Authority's regulations presenting additional arguments concerning several decisions that were issued by the United States Courts of