44:0926(76)AR - - Treasury, Bureau of Engraving and Printing and IPPDSAEU, Washington Plate Printers Union, Local 2 - - 1992 FLRAdec AR - - v44 p926



[ v44 p926 ]
44:0926(76)AR
The decision of the Authority follows:


44 FLRA No. 76

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF THE TREASURY

BUREAU OF ENGRAVING AND PRINTING

(Agency)

and

INTERNATIONAL PLATE PRINTERS

DIE STAMPERS AND ENGRAVERS UNION

WASHINGTON PLATE PRINTERS UNION

LOCAL 2

(Union)

0-AR-2111

0-AR-2121

DECISION

April 24, 1992

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on exceptions to an award and a supplemental award of Arbitrator Herbert Fishgold 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. In Case No. 0-AR-2111, the Agency filed exceptions to the Arbitrator's original award, and in Case No. 0-AR-2121, the Agency filed exceptions to the Arbitrator's supplemental award. The Union filed oppositions to the Agency's exceptions to both awards. The cases have been consolidated for decision.

The Agency terminated the parties' collective bargaining agreement and, thereafter, made certain unilateral changes in staffing and work rules. The Union filed a grievance, claiming that the changes violated the agreement and challenging the Agency's right to terminate the agreement. The Arbitrator determined that the changes violated the agreement and that the Agency's termination of the agreement was invalid. As his award, the Arbitrator returned the parties to the status quo ante, voided the Agency's cancellation of the agreement, and rescinded the Agency's unilateral changes. In a supplemental award, the Arbitrator clarified the status quo ante remedy.

We conclude that the Agency's exceptions provide no basis for finding either the original award or the supplemental award deficient. Accordingly, we will deny the Agency's exceptions.

II. Background

The parties in this case have had a long collective bargaining relationship. During the years of their relationship, various work and staffing practices have developed. In 1975, the parties entered into their first formal collective bargaining agreement. Article VI of the 1975 agreement required that "prior work benefits and practices and understandings" remain in force during the term of the agreement. Award at 2 (quoting Article VI). The agreement was signed on June 20, 1975. By its terms, after an initial 2-year term, the agreement remained in effect for yearly periods thereafter unless either party served the other party with written notice, at least 60 calendar days prior to the expiration date, of its desire to terminate or modify the agreement, as of the expiration date.

In 1979, the Agency notified the Union that it wished to renegotiate the agreement. On October 19, 1979, the parties entered into a memorandum of understanding (MOU) specifying the ground rules governing the renegotiation of the agreement. Section 3 of the 1979 MOU provided, as follows:

It is agreed that all articles of the [1975] contract, not in conflict with existing or future laws and regulations or appropriate authorities and the CSRA, remain in full force and effect on a day to day basis during good faith negotiations. Either party may cancel this extension with 24 hours written notice to the other party.

Id.

In 1980,(1) the parties executed a new collective bargaining agreement. Pursuant to agency head review provisions of section 7114(c) of the Statute, the Department of the Treasury disapproved the agreement, asserting that numerous provisions of the agreement were nonnegotiable. The Union filed a negotiability appeal with the Authority. While the Union's petition for review was pending, the parties adhered to the 1975 agreement pursuant to the 1979 MOU.

In International Plate Printers, Die Stampers and Engravers Union of North America, AFL-CIO, Local 2 and Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 25 FLRA 113 (1987), the Authority dismissed the petition as to some of the disputed provisions and ordered the disapproval rescinded as to other provisions. Thereafter, the parties met and reached agreement on the provisions found nonnegotiable by the Authority. The new agreement was executed by the parties on December 1, 1988, and forwarded to the Department of the Treasury for agency head review.

By memorandum dated December 27, 1988, the Department of the Treasury disapproved the agreement, asserting that numerous provisions of the agreement were nonnegotiable. The memorandum was addressed and delivered to the Agency's industrial relations office on December 27. Consistent with the normal practice, a representative of the Department of the Treasury attempted to personally deliver a copy of the memorandum to a Union representative. However, at that time, the Agency was in the midst of its year-end shutdown, and there were no Union representatives at work. As a result, a copy of the memorandum was placed in the Union's internal mailbox, and a copy was mailed, by regular mail, on December 27 to a post office box of the Union. A Union official discovered the memorandum after the shutdown ended and after the 30-day period for agency head action set forth in section 7114(c)(3) had expired.

What occurred thereafter with respect to the 1988 agreement was a subject of dispute before the Arbitrator. However, it was not disputed that the parties never negotiated new contract language after December 27, 1988, and that the Union never filed a negotiability appeal or an unfair labor practice charge regarding the 1988 agreement.

In October 1989, the Agency instituted a procedure pursuant to which employee breaks were staggered with the employee on break being replaced by a relief plate printer or by a plate printer foreman. The Union filed a grievance regarding the assignment of foremen on the presses and the matter was submitted to arbitration. In an arbitration award, an arbitrator found that the changes violated Article VI of the 1975 agreement and ordered the changes rescinded.(2) After the arbitrator's award, the Agency determined that it had to find a means of making the staffing changes that it believed to be necessary. The means decided on was the termination of the 1975 agreement. In a letter to the Union dated June 22, 1990, the Agency notified the Union that the Agency was cancelling the extension of the 1975 agreement. The Agency explicitly took this action under the terms of the 1979 MOU, stating that it was by operation of the 1979 MOU that the 1975 agreement had been extended. Shortly thereafter, the Agency notified the Union of certain changes in work rules and staffing to be effective July 23, 1990. The Agency offered to bargain over the impact and implementation of the changes, but refused to bargain over the substance of the changes. The Agency ultimately implemented substantially all of the changes that it had announced.

The Union filed a grievance over the changes, claiming that they violated the 1975 agreement and challenging the Agency's right to terminate the 1975 agreement. The grievance was not resolved and was submitted to arbitration.

III. Arbitrator's Award

Before the Arbitrator, the Union argued that in 1990, when the Agency unilaterally changed work rules and press staffing, the 1975 agreement was in force by virtue of an informal agreement reached by the parties in January 1989 to indefinitely extend the 1975 agreement. The Union further argued that the 1975 agreement precluded the changes. The Union asserted that in January 1989, the 1988 agreement became effective by operation of law because of the Department of the Treasury's failure to properly serve the Union within the required 30 days with the disapproval of the agreement. The Union maintained that rather than implement the 1988 agreement and go through further litigation, the parties had entered into an understanding to abide by the 1975 agreement and to hold the 1988 agreement in abeyance. The Union claimed that because the 1988 agreement had become effective, however, the 1979 MOU was extinguished and could not provide the means by which to cancel the 1975 agreement. Alternatively, the Union argued that the 1988 agreement remained in effect and that it precluded the Agency's changes.

The Agency asserted that it properly terminated the 1975 agreement and that, consequently, its changes were permissible. The Agency argued that the 1975 agreement was in effect until June 22, 1990, by virtue of the 1979 MOU and that the Agency terminated the 1975 agreement consistent with the terms of the MOU. The Agency disagreed with the Union that the 1988 agreement went into effect, arguing that the Union had actual notice of the disapproval of the agreement. The Agency claimed that because the 1988 agreement did not become effective, the 1979 MOU was the sole means by which the 1975 agreement was in force. The Agency also disagreed with the Union that the parties agreed in January 1989 to follow the 1975 agreement.

The Arbitrator determined that the Agency's changes in staffing and work rules were precluded by the 1975 agreement and that the Agency's cancellation of the 1975 agreement on June 22, 1990, under the terms of the 1979 MOU, was invalid. In considering the propriety of the Agency's cancellation of the agreement, the Arbitrator examined the actions of the parties during the 18-month period from the Department of the Treasury's disapproval of the 1988 agreement to the Agency's cancellation of the 1975 agreement pursuant to the 1979 MOU. He found that these "actions . . . reflect[ed] an intention that ripened into a tacit agreement to abide by the 1975 agreement, not day-to-day during 'good faith negotiations,' but for an indefinite period." Award at 21.

In reaching this determination, the Arbitrator agreed with the Union that the 1988 agreement had become effective in January 1989 by operation of law because the Department of the Treasury's disapproval of the agreement had not been properly served on the Union as required by the Authority's Rules and Regulations. However, he rejected the Union's contention that the parties entered into an express agreement in January 1989 to hold the 1988 agreement in abeyance and reinstate the 1975 agreement for an indefinite period of time. He noted that an express agreement requires a meeting of the minds and that he was unable to find any such meeting of the minds in January 1989. Although he was unable to find an express agreement, the Arbitrator found an implied agreement based on the parties' actions between January 1989 and June 1990.

Reviewing the Union's actions and inactions, the Arbitrator found that the Union waived its rights to invoke the 1988 agreement. He noted that although the 1988 agreement became effective by operation of law and could have been enforced by the Union, "[t]he Union . . . did nothing, not even memorializing its view of the status of the 1988 agreement." Id. at 19. He found that the record showed that, after January 1989, the Union made no mention of the 1988 agreement until after the Agency's cancellation of the 1975 agreement in June 1990. The Arbitrator noted that the Union repeatedly asserted its rights under the 1975 agreement only. The Arbitrator concluded that these actions and inactions clearly and unmistakably indicated an intent by the Union to waive the 1988 agreement and to be governed by the 1975 agreement. Accordingly, the Arbitrator ruled that the Union could not invoke the 1988 agreement in June 1990 as a bar to the Agency's unilateral changes.

The Arbitrator likewise found that the actions of the Agency over this period also reflected "an intention that ripened into a tacit agreement" to abide by the 1975 agreement for an indefinite period. Specifically, he concluded that the Agency's actions during this period were inconsistent with the Agency's claim at arbitration that the parties were operating under the terms of the 1979 MOU. In so concluding, the Arbitrator rejected the Agency's argument that the 1975 agreement could not have been reinstated without the approval of the Department of the Treasury under the agency head review provisions of section 7114(c) of the Statute. The Arbitrator found that principles of equity dictated that the Agency be estopped from disavowing its tacit agreement because the Union's waiver of its rights under the 1988 agreement was linked to the agreement to reinstate indefinitely the 1975 agreement.

Consequently, the Arbitrator ruled that the situation that existed on June 22, 1990, was that the parties were in agreement to abide by the terms of the 1975 agreement, including the past practice provisions of Article VI, for an indefinite period. As his award, the Arbitrator returned the parties to that status quo ante. In returning the parties to the status quo ante, the Arbitrator voided the Agency's cancellation of the 1975 agreement and rescinded the changes in press staffing and other working conditions that followed from the cancellation. The Arbitrator advised the parties that by returning them to the status quo ante, he was not preventing the parties from "alter[ing] that status quo--each is free to take whatever action it deems appropriate." Id. at 24. The Arbitrator also denied the Union's request for attorney fees.

IV. Arbitrator's Supplemental Memorandum

Following the issuance of the Arbitrator's award, the Agency in a letter to the Union dated April 19, 1991, gave the Union notice pursuant to Article XXXII of the parties' 1975 agreement of management's intent to terminate the 1975 agreement as of its June 20, 1991, anniversary date. On April 22, 1991, the Union sent a letter to the Arbitrator, with a copy to the Agency, requesting clarification of the award because of an asserted ambiguity in the scope of the status quo ante remedy. The Union maintained that if the remedy was not clarified to preclude the Agency's interpretation of the time frame during which the remedy is to apply, the Agency would be permitted to accomplish precisely the same result that the Arbitrator had already ruled violated the 1975 agreement.

In a letter to the Arbitrator dated April 24, 1991, the Agency responded to the Union's request for clarification. In the Agency's view, it was clear from the award that under the 1975 agreement, the termination provisions of Article XXXII were subject to being exercised by either party. The Agency maintained that the only difference between notification of termination on June 22, 1990, and April 19, 1991, was that if the notification had come earlier, more time would have elapsed between the notice date and the effective date of the termination. Although the Agency asserted that the award required no clarification, the Agency stated that it has "no objection to any efforts the Arbitrator chooses to undertake in order to make the decision equally clear to the union[.]" April 24 letter at 5.

In a letter to the Arbitrator dated April 24, 1991, the Union responded to the position of the Agency. The Union asserted that the award must be clarified to require adherence to the terms of the 1975 agreement for a period of time equal to the time period between June 22, 1990, and the agreement's next anniversary date of June 20, 1991, in order to place the Agency in the same position that it would have been in had it properly provided notice of termination on June 22, 1990.

The Arbitrator agreed that the award needed clarification and noted that the ambiguity was partly due to the fact that his award issued on April 16, 1991, which allowed the Agency to provide notice of termination within the required 60 days of the June 20 anniversary date of the 1975 agreement. In a Supplemental Memorandum, the Arbitrator agreed with the Union's interpretation of the status quo ante remedy of the original award. The Arbitrator clarified the remedy to provide that the intent of the remedy "was to put both parties in the same legal and contractual position vis-a-vis the 1975 Agreement as of June 20, 1990." Supplemental Memorandum at 5. He indicated that the status quo ante remedy required reestablishing the time period, consisting of almost a year, that the parties would have had under the 1975 agreement if the Agency had properly notified the Union on June 22, 1990, of its intent to terminate the 1975 agreement. In the Arbitrator's view, this provided the parties with the opportunity they originally would have had to resolve this matter through the collective bargaining process.

Accordingly, the Arbitrator ruled that the Agency's written notice on April 19, 1991, of its intent to terminate the 1975 agreement effective June 20, 1991, "was not encompassed in the appropriate action that could be taken under the status quo ante remedy." Id. at 7.

V. First Exception to Original Award

A. Positions of the Parties

1. The Agency

The Agency contends that the Arbitrator erred by finding that the 1988 agreement went into effect by operation of law. The Agency argues that the Authority's Rules and Regulations are not intended, and should not be allowed, to defeat an agency head disapproval when, as in this case, the union was unavailable for personal service and has not asserted that it did not have actual notice of the disapproval within the 30-day approval period. The Agency also argues that the Authority's Rules and Regulations should not be allowed to defeat the disapproval in view of the Union's failure to advise the Department of the Treasury that the service was deficient. The Agency claims that the Union's failure has prejudiced the Agency's ability to establish that there had been proper service. The Agency, in addition, disputes the Arbitrator's finding that the Union "made the Agency aware" of the deficient service. Exceptions at 4 (quoting Award at 19).

2. The Union

The Union contends that the Arbitrator correctly determined that the 1988 agreement became effective by operation of law as a result of the Department of the Treasury's failure to properly serve the Union with its disapproval as required by the Authority's Rules and Regulations. The Union further contends that an agency must comply absolutely and literally with the service requirements and that, consequently, the Agency's arguments about actual notice by the Union and "the purported inability of its officials to effect personal service" provide no basis for finding the award deficient. Union's Opposition at 17.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the award is deficient, as alleged.

The Authority has consistently held that section 2429.27(b) of the Authority's Rules and Regulations prescribes the means by which an agency head's disapproval of a collective bargaining agreement pursuant to section 7114(c) of the Statute must be served on the union. For example, American Federation of Government Employees, National Mint Council and U.S. Department of the Treasury, Bureau of the Mint, San Francisco, California, 41 FLRA 220, 222 (1991) (Bureau of the Mint). Service of documents covered by section 2429.27(b) must be by certified mail or in person, and section 2429.27(b) prescribes that proof of service must be by a return post office receipt or other written receipt executed by the party or person served. Bureau of the Mint, 41 FLRA at 220-21. The Authority has further held that when an agency head fails to properly serve the union with the disapproval, the entire collective bargaining agreement becomes effective by operation of law on the 31st day after execution of the agreement, subject only to the Statute and other applicable law, rule, or regulation. Id. at 222 & n. Furthermore, we have held that "[s]trict adherence to the regulatory requirements for service of a disapproval is necessary in order to determine whether a petition for review meets the statutory filing requirements contained in section 7117(c) of the Statute, as well as the procedural requirements set forth in part 2424 of the Authority's Rules and Regulations." American Federation of Government Employees, National Mint Council and U.S. Department of the Treasury, Bureau of the Mint, San Francisco, California, 41 FLRA 1004, 1009-10 (1991) (denying reconsideration of Bureau of the Mint) (Bureau of the Mint II). Accordingly, we agree with the Arbitrator that the 1988 agreement became effective by operation of law in January 1989 as a result of the Department of the Treasury's failure to properly serve its disapproval of the agreement on the Union as required by the Authority's Rules and Regulations.

We reject the Agency's claim that the Authority's Rules and Regulations should not be allowed to defeat the disapproval because no Union representatives were available for personal service and because the Union may have had actual notice of the disapproval. Actual notice has never satisfied the service requirements of section 2429.27(b). See American Federation of Government Employees, Local 2354 and U.S. Department of the Air Force, F.E. Warren Air Force Base, Cheyenne, Wyoming, 40 FLRA 1232 (1991) (notice of disapproval by computer message); American Federation of Government Employees, National Veterans Affairs Council and U.S. Department of Veterans Affairs, Veterans Health Services and Research Administration, Washington, D.C., 39 FLRA 1055, request for reconsideration denied, 40 FLRA 195 (1991) (notice of disapproval by facsimile transmission); American Federation of Government Employees, Local 1753 and Department of the Air Force, Myrtle Beach Air Force Base, South Carolina, 8 FLRA 152 (1982) (notice of disapproval by telephone). In addition, under section 2429.27(b), when personal service is unavailable, certified mail service may be utilized to satisfy the service requirements.

We also reject the Agency's claim that the Authority's Rules and Regulations should not be allowed to defeat the disapproval because the Union failed to advise the Department of the Treasury or the Agency that the service was deficient. In our view, the Agency's claim constitutes nothing more than disagreement with the Arbitrator's findings of fact and his evaluation of the evidence and testimony. As such, the Agency's claim provides no basis for finding the award deficient. See National Treasury Employees Union, National Treasury Employees Union Chapter 33 and U.S. Internal Revenue Service, Phoenix District, 44 FLRA 252 (1992) (IRS, Phoenix). Furthermore, we find that notice of deficient service is irrelevant because the Union did not discover the memorandum containing the disapproval until after the agreement had become effective by operation of law. Both the Department of the Treasury and the Agency are charged with knowledge of the service requirements of section 2429.27(b), and the record reflects no assertion that there was either personal service or service by certified mail in this case. Because there has never been an assertion of proper service and because the Arbitrator specifically found that there had not been proper service, we fail to perceive what facts the Agency could have gathered to establish that there was service as required by section 2429.27(b), and find no prejudice to the Agency.

Moreover, we are uncertain in what manner this exception provides a basis for finding the award deficient. The Arbitrator found that the 1975 agreement applied in 1990, not the 1988 agreement. To the extent the Agency is disputing the Arbitrator's conclusion with respect to the 1988 agreement as part of the Arbitrator's ultimate determination that there was a tacit agreement to abide by the 1975 agreement, we find that this exception constitutes nothing more than disagreement with the Arbitrator's reasoning and conclusions in determining that the 1975 agreement applied. As such, the exception provides no basis for finding the award deficient. See IRS, Phoenix, 44 FLRA at 269-70.

Accordingly, we will deny the exception.

VI. Second Exception to Original Award

A. Positions of the Parties

The Agency contends that the Arbitrator's finding of a "tacit agreement" between the parties to abide by the 1975 agreement for an indefinite period is unsupported. Exceptions at 5 (quoting Award at 21). The Agency disputes the several reasons stated by the Arbitrator as evidence of a tacit agreement between the parties.

The Union contends that the Arbitrator's finding of a tacit agreement between the parties to abide by the 1975 agreement for an indefinite period of time is well supported by the record.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the award is deficient, as alleged. We find that the exception constitutes nothing more than disagreement with the Arbitrator's findings of fact, evaluation of the evidence and testimony, and reasoning and conclusions in determining that there was a tacit agreement between the parties. As such, the exception provides no basis for finding the award deficient. See IRS, Phoenix, 44 FLRA at 269-72. Accordingly, we will deny the exception.

VII. Third Exception to Original Award

A. Positions of the Parties

1. The Agency

The Agency contends that the award is contrary to section 7114(c) of the Statute because it enforces the tacit agreement between the parties to abide by the 1975 agreement when that agreement was never approved by the Department of the Treasury. The Agency asserts that section 7114(c), in part, is intended to formalize the procedures to be observed by the parties in establishing the rules that would govern their relationship. The Agency argues that, contrary to such intent, the Arbitrator has imposed on the Agency "a putative agreement not committed to writing and never submitted to, or otherwise brought to the notice of, [the Department of the Treasury,] the Agency with the responsibility for reviewing it." Exceptions at 7. The Agency also argues that the Arbitrator's determination that principles of equity dictated that the Agency be estopped from disavowing its tacit agreement because of the Union's waiver of its rights under the 1988 agreement cannot serve as a basis for enforcing the 1975 agreement. The Agency maintains that estoppel was inappropriate because, in the Agency's view, the Union never possessed any rights under the 1988 agreement.

2. The Union

The Union contends that approval of the agency head under section 7114(c) of the agreement of the parties to abide by the 1975 agreement for an indefinite period of time was not required. The Union asserts that the 1975 agreement was a lawful, binding, and, consequently, enforceable agreement by virtue of section 7135(a)(1) of the Statute(3) because the Department of the Treasury had approved the 1975 agreement under the agency head approval provisions of Executive Order 11491. The Union argues that the 1975 agreement continued in force as a result of the automatic renewal provisions contained in the agreement.

In addition, the Union contends that even if agency head approval were required, there was a complete failure by the Agency to submit the agreement for review. The Union asserts that it is now too late for the Agency to argue that agency head approval was required. The Union claims that long before the events giving rise to this case, the tacit agreement became binding by operation of law because the 30-day period for acting to disapprove the agreement had passed under any conceivable set of circumstances.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the award is deficient, as alleged.

Section 7114(c) of the Statute provides that an exclusive representative is entitled to negotiate collective bargaining agreements covering employees in the unit, and section 7114(b) provides that the duty of an agency and an exclusive representative includes the obligation to negotiate with a sincere resolve to reach a collective bargaining agreement. Section 7114(b) further provides that, if an agreement is reached, the parties are obligated, on the request of any party to the negotiations, to execute a written document embodying the agreed terms. Section 7114(c) provides that such an agreement between an agency and an exclusive representative shall be subject to approval by the head of the agency. In addition, the Authority has recognized that section 7114(b)(5) imposes an obligation on a party "to sign a document provided that an agreement is reached after negotiations thereon." U.S. Department of the Navy, Portsmouth Naval Shipyard, Portsmouth, New Hampshire, 44 FLRA 205, 206 (1992) (quoting with original emphasis Internal Revenue Service, Philadelphia District Office, 22 FLRA 245, 255 (1986)).

In this case, we are not persuaded that the parties' tacit agreement to abide by the terms of the 1975 collective bargaining agreement was enforceable only if it was approved by the Department of the Treasury under section 7114(c) of the Statute. Assuming that the parties' tacit agreement to abide by the terms of the 1975 agreement is an agreement subject to agency head review, we conclude that the Agency provides no basis for finding the award deficient. We find that the Agency fails to establish that, absent an explicit approval by the agency head pursuant to section 7114(c), the parties' agreement to abide by the terms of the 1975 agreement is not binding and enforceable as specifically found by the Arbitrator. In view of the Agency's assertion that the agreement to abide by the 1975 agreement is subject to agency head review, the Agency was obligated to have initiated and effectuated the review process under section 7114(c). The Agency provides no support for its position that, despite its failure to initiate and effectuate the agency head review process, the agreement may not be enforced because it was not approved by the agency head under section 7114(c).

Under section 7114(b)(5) of the Statute, if an agreement is reached, the parties are required "to take such steps as are necessary to implement such agreement." Clearly, such steps include the submission of that agreement to the agency head for approval. We note, in this regard, that section 7114(c)(1) of the Statute states only that agreements shall "be subject to" agency head approval, and does not address a situation where agency head approval is not sought. We agree with the judge's discussion of the principles respecting enforcement of oral agreements in Department of the Interior, Washington, D.C., 31 FLRA 267 (1988) (DOI), although the Authority did not have an opportunity to rule on the judge's conclusions in that regard because the Authority determined that the parties had not reached an oral agreement. In DOI, the judge found that there was an enforceable oral agreement and that the respondent had repudiated the agreement despite the agency's arguments that the oral agreement was unenforceable because it had not met "the statutory requirement of approval by the Agency head[.]" 31 FLRA at 299. As relevant to this case, the judge rejected the respondent's argument pertaining to approval of the agency head as follows: "The short answer to Respondent's argument is that the mechanics for approval of [the] side agreement . . . was management's responsibility. If the agreement warranted disapproval in [the agency's] judgment, and if its execution required signatures, management should have taken care of such matters. It did not do so." Id. at 299-300.

Similarly, we agree with the Arbitrator that the Agency in this case should not be permitted to benefit from its failure to seek agency head review and to avoid, at least until there has been a proper disapproval of the agreement in accordance with all the terms of section 7114(c) of the Statute, the tacit agreement to which the Arbitrator found it was bound and on which the Union detrimentally relied. Because the Arbitrator in this case found a binding and enforceable agreement between the parties, we conclude that this case is unlike the situation in International Organization of Masters, Mates and Pilots and Panama Canal Commission, 36 FLRA 555, 560-61 (1990), where we stated that until the parties have a signed document embodying their understandings, there is no agreement to implement.

Furthermore, we are not persuaded that the tacit agreement was even subject to agency head review. We note in this respect that the tacit agreement was not reached as a result of negotiations and collective bargaining. Instead, the tacit agreement reflected the mutual understanding of the parties. The Arbitrator specifically rejected the Union's argument that the parties had entered into an express agreement in January 1989 to reinstate the 1975 agreement for an indefinite period of time. Instead, the Arbitrator examined the actions of the parties from January 1989 to June 1990 and determined that the parties' conduct "reflected an intention that ripened into a tacit agreement . . . ." Award at 21. In our view, the tacit agreement found by the Arbitrator, which arose from the parties' pattern of conduct, is comparable to a past practice. As we stated in Letterkenny Army Depot, 34 FLRA 606, 611 (1990), "[c]onditions of employment . . . may be established . . . through express agreement or past practice." Although express agreements establishing conditions of employment are clearly subject to agency head review under section 7114(c), the Authority has never held that practices establishing conditions of employment are subject to agency head review. We decline to depart from that approach in order to find that the tacit agreement in this case, which was not negotiated and which did not result in a written agreement embodying its terms, is subject to agency head review under section 7114(c) of the Statute.

In sum, the Agency provides no basis for finding the parties' tacit agreement unenforceable absent approval of the Agency Head under section 7114(c) of the Statute. Accordingly, we will deny the exception.

VIII. Exceptions to Supplemental Award

A. Positions of the Parties

1. The Agency

The Agency contends that the Arbitrator exceeded his authority because the rulings in his supplemental award do not draw their essence from the parties' 1975 agreement. The Agency also contends that the supplemental award "is contrary to law." Exceptions to Supplemental Award at 7.

The Agency asserts that the award not only fails to draw its essence from the 1975 agreement, but that it necessitates the abrogation of specific provisions of the agreement. The Agency claims that under the terms of the 1975 agreement, the Agency properly notified the Union of its wish to terminate the agreement on June 20, 1991, and that the supplemental award improperly prevented the termination.

The Agency further asserts that the Arbitrator's reasoning that the Agency's action was based on the date of his original award is unfounded and that his characterization of the positions in which the parties found themselves in June 1990 is erroneous. The Agency also asserts that the Arbitrator's weakest rationale for his supplemental award is his view that his remedy would encourage collective bargaining. The Agency claims that it is clear that the Union has no desire to engage in collective bargaining.

2. The Union

The Union first contends that the Agency's exceptions to the supplemental award should be dismissed as untimely filed. The Union argues that the exceptions are nothing more than a belated attack on the remedy that was provided in the original award.

On the merits, the Union contends that the exceptions should be denied. The Union asserts that the Arbitrator in no way has precluded the Agency from exercising rights provided under the 1975 agreement. The Union maintains that all the Arbitrator has done is to place the parties in the same position with respect to the 1975 agreement that they were in as of June 22, 1990: a 363-day period during which the Agency must adhere to the 1975 agreement while negotiating for a successor agreement.

B. Analysis and Conclusions

1. Timeliness of Exceptions

In his original award, the Arbitrator returned the parties to the status quo ante: the situation that existed on June 22, 1990. The Arbitrator advised the parties that by returning the parties to the status quo ante, he was not preventing the parties from altering the status quo. In his supplemental award, the Arbitrator clarified the remedy to indicate that the remedy required reestablishing the time period, consisting of almost a year, that the parties would have been bound by the 1975 agreement if the Agency had properly notified the Union on June 22, 1990, of its intent to terminate the 1975 agreement as of June 20, 1991. Accordingly, the Arbitrator ruled that the Agency's written notice on April 19, 1991, of its intent to terminate the 1975 agreement effective June 20, 1991, was inconsistent with the ordered status quo ante remedy.

We have repeatedly held that a clarification award does not operate to extend the time period for filing exceptions under section 7122 of the Statute. National Archives and Records Administration and American Federation of Government Employees, Council 260, Local 2578, 42 FLRA 664, 669 (1991). Only when an arbitrator's response to a clarification request gives rise to the deficiencies alleged in the exceptions does the filing period for exceptions begin with the service of the arbitrator's response. Id. at 669. In this case, we conclude that the exceptions were timely filed. We find that the alleged deficiencies did not arise until the Arbitrator clarified his award. It was not until the clarification of the supplemental award that the Arbitrator clearly specified that the status quo ante remedy reestablished the 363-day period that the parties would have been bound by the 1975 agreement. Consequently, the time period for filing exceptions disputing this specification of the remedy did not commence until service of the supplemental award, and the Agency's exceptions filed on June 13, 1991, were timely. See id. Accordingly, we will resolve the merits of the Agency's exceptions to the supplemental award.

2. Merits of the Exceptions

We conclude that the Agency fails to establish that the Arbitrator's supplemental award is deficient.

The Agency contends that the award "is contrary to law." Exceptions to Supplemental Award at 7. However, the Agency fails to cite any provision of law with which the award allegedly conflicts and otherwise fails to support in any manner this contention. Accordingly, we conclude that this exception provides no basis on which to find the award deficient, and we will deny the exception. See, for example, American Federation of Government Employees and U.S. Department of the Air Force, Air Force Logistics Command, 40 FLRA 947, 949 (1991).

We also conclude that the Agency fails to establish that the supplemental award fails to draw its essence from the parties' collective bargaining agreement. For an award to be found deficient because it fails to draw its essence from a collective bargaining agreement, the party making the allegation must demonstrate that the award: (1) cannot in any rational way be derived from the agreement; or (2) is so unfounded in reason and fact, and so unconnected with the wording and the purpose of the agreement as to manifest an infidelity to the obligation of the arbitrator; or (3) evidences a manifest disregard for the agreement; or (4) does not represent a plausible interpretation of the agreement. For example, U.S. Department of the Treasury, Internal Revenue Service, Philadelphia, Pennsylvania and National Treasury Employees Union, Chapter 71, 41 FLRA 710, 724 (1991) (Philadelphia Service Center).

In making the contention that the award does not draw its essence from the parties' agreement, the Agency fails to acknowledge that the Arbitrator awarded this relief to remedy the results of the improper actions of the Agency. The Authority has repeatedly recognized the great latitude arbitrators have in fashioning remedies. For example, Philadelphia Service Center, 41 FLRA at 725. In this case, the Arbitrator found that the Agency's changes in staffing and work rules were precluded by the 1975 agreement and that the Agency's cancellation of the 1975 agreement was invalid. The Arbitrator restored the status quo ante specifically to remedy the Agency's invalid cancellation and the effects of its actions that were taken in violation of the agreement. The Arbitrator concluded that it was critical to reestablish the 363-day period that the parties would have been bound by the 1975 agreement if the Agency had initially followed the termination provision that it now insists must be literally observed. Because the Agency fails to establish that the basis for the status quo ante remedy is deficient, we refuse to allow the Agency to now insist on a literal application of the termination provision of the 1975 agreement when it was the invalid cancellation of that agreement that led to the remedy as clarified in the supplemental award. After the 363-day period expires, the Agency will be free to enforce the termination provision.

In sum, we are not persuaded that delaying application of the termination provision as part of a remedy to place the parties where they would have been, but for the improper actions of the Agency, is implausible, irrational, unfounded, or in manifest disregard of the agreement. Consequently, the Agency has failed to demonstrate that the Arbitrator's status quo ante remedy, as clarified in the supplemental award, is deficient because it fails to draw its essence from the collective bargaining agreement. See id. (where the Authority stated: "As the Arbitrator found that the Agency violated Article 27, it is not implausible or irrational for the Arbitrator, in enforcing Article 27, to issue a remedy preventing the Agency from charging the grievants with leave.").

Finally, we find that the Agency's assertions that the Arbitrator's reasoning, rationale, and conclusions were unfounded or erroneous constitute nothing more than disagreement with the Arbitrator's reasoning and conclusions in clarifying the award. As such, the assertions provide no basis for finding the award deficient. See IRS, Phoenix, 44 FLRA at 269-70.

Accordingly, we will deny this exception.

IX. Decision

The Agency's exceptions to both the original award and the supplemental award are denied.




FOOTNOTES:
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1. The Arbitrator incorrectly states