45:1242(125)AR - - NTEU Chapter 97 and Treasury, IRS, Fresno Service Center - - 1992 FLRAdec AR - - v45 p1242



[ v45 p1242 ]
45:1242(125)AR
The decision of the Authority follows:


45 FLRA No. 125

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

NATIONAL TREASURY EMPLOYEES UNION

CHAPTER 97

(Union)

and

U.S. DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

FRESNO SERVICE CENTER

(Agency)

0-AR-2248

DECISION

September 24, 1992

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on exceptions to an award of Arbitrator Leo Kanowitz 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 found that the Agency violated the parties' collective bargaining agreement when it assigned "live" work as part of on-the-job training to newly hired seasonal employees while experienced seasonal employees were in nonwork status. For the reasons discussed below, we conclude that the Agency has not established that the Arbitrator's award is deficient under section 7122(a) of the Statute. Therefore, we will deny the Agency's exceptions.

II. Background and Arbitrator's Award

The Union filed a grievance alleging that the Agency violated Article 14 of the parties' collective bargaining agreement when it assigned "live" work (actual work, as opposed to simulated cases) to newly hired seasonal employees (trainees) while experienced seasonal employees were in nonwork status.1/ The grievance was not resolved and was submitted to arbitration. The parties stipulated the following issue:

1. Did the agency violate Article 14, Section 1 or Section 2 of the collective bargaining agreement, and/or Section 17 of the TEPS agreement2/, by placing new hires on live work without ranking them on the release/recall list while seasonal employees were released in 1990? If so, what shall the remedy be?

Award at 2.

The work of the Agency consists of processing tax returns. Because this work is highly seasonal, employees are laid off (released) during work shortages and are later recalled to work as the Agency's workload increases. Seasonal employees are released and recalled based on their positions on a release/recall list that is established pursuant to Article 14 of the parties' agreement.

Before the Arbitrator, the Agency argued that Article 14 did not require the Agency to rank trainees for release or recall before they perform live work while other employees are in nonwork status. The Agency claimed that Article 14 merely requires it to rank trainees for the release/recall list when the Agency was also ranking other employees. The Agency further argued that neither the Statute nor the collective bargaining agreement places any limitations on its right to assign work to any of its employees, including trainees.

The Arbitrator rejected the Agency's arguments and concluded that Article 14 requires the Agency to rank trainees for release or recall before they perform live work while other employees are in nonwork status. In reaching this conclusion, the Arbitrator found that the release/recall provisions of Article 14 were a "species of seniority protection" for experienced seasonal employees. Id. at 21. He stated that the provisions were designed to give senior seasonal employees, with the necessary skills, a work preference over less senior seasonal employees.

The Arbitrator also determined that the release/recall procedures in Article 14 do not preclude the Agency from exercising its right to assign work. The Arbitrator found that under the release/recall procedures the Agency may not assign live work to trainees while higher ranked seasonal workers are in nonwork status. He noted that instead of releasing the trainees to nonwork status when they had completed classroom training, the Agency had the alternative of retaining the trainees and recalling the higher ranked seasonal employees. The Arbitrator recognized the Agency's goal of improving its efficiency by assigning live work to trainees as a part of their on-the-job training. However, the Arbitrator concluded that the Agency could not "ignore its obligations to the experienced seasonal employees under the release/recall provisions of the [a]greement." Id. at 23.

The Arbitrator found evidence of harm to individual experienced seasonal employees and, in his award, ordered the Agency to cease and desist from training newly-hired seasonal employees on live work while more experienced seasonal employees are involuntarily released to nonwork/nonpay status and to construct a release/recall list for the 1990 training period in accordance with the procedures in Article 14 of the collective bargaining agreement. The Arbitrator further ordered the Agency to grant reimbursements for lost wages and benefits, including interest and leave, to all seasonal employees who were improperly released or not recalled as a result of the violation. Finally, the Arbitrator ordered the parties to determine, through mutual consultation, the nature and extent of the harm to individual seasonal employees as a result of the Agency's violation of the agreement. The Arbitrator stated that he would be available to conduct a hearing and perform that task for them if their efforts do not succeed.

III. First Exception

A. Positions of the Parties

1. The Agency

The Agency contends that the Arbitrator's award is deficient because it is contrary to law. The Agency claims that in accordance with section 7106 of the Statute, it has the rights "to assign work, to layoff and retain employees, to determine the personnel by which operations shall be conducted, and to determine the numbers, types and grades of employees assigned to any work project." Exceptions at 8. The Agency further claims that those rights include the right to assign work to new employees and the rights to decide when to lay off and recall employees and that nothing in the parties' agreement indicates that the Agency bargained away these rights. The Agency asserts that there is no contractual language that qualifies these rights in any way, and that, therefore, it is the duty of the Arbitrator to protect these management rights. By failing to uphold management's rights, the Agency claims that the award is contrary to law.

The Agency maintains that the test, established in Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA 309 (1990) (Customs Service), for determining whether a contractual provision, as enforced by an arbitrator, abrogates the exercise of a management right does not apply to this case. The Agency claims that provision of the agreement that the Arbitrator "purport[ed] to interpret" does not constitute an arrangement for employees adversely affected by the exercise of a management right because the Agency "did not agree to a course of action about when employees would be released or recalled . . . ." Exceptions at 12-13.

According to the Agency, Article 14 merely requires the Agency to place new employees on the bottom of the release/recall list at some point. Although the Agency notes its disagreement with the Arbitrator's determination of when it must place new employees on the list, it excepts only to the Arbitrator's finding that Article 14 requires the recall of certain employees before training new employees. The Agency asserts that Article 14 is silent on this subject and, therefore, the language "when it becomes necessary" that is contained in section 2A of that provision can only mean "when management decides it is necessary to release employees." Id. at 14 (emphasis omitted). The Agency acknowledges that the provision is an arrangement or a procedure with regard to its rights to lay off and retain employees set forth in section 7106(a)(2)(A) of the Statute, but argues that the agreement contains no arrangements with regard to other management rights. Specifically, the Agency contends that because there is no evidence of any mutual intent to qualify management's right to determine when to recall employees, the provision is not an arrangement for employees adversely affected by the exercise of management's right to assign work set forth in section 7106(a)(2)(B).

If the Authority determines that Customs Service applies to this case, the Agency claims that the Arbitrator's award abrogates management's rights. The Agency contends that under the award, it cannot assign live work to trainees while other seasonal employees are in nonwork status under any circumstances and that this abrogates its right to assign work. The Agency maintains that the right to assign work includes the right to determine which employees to assign particular work. It also maintains that the release/recall provisions merely specify which individual employees will be released or recalled and does not limit its right to decide which employees will be assigned particular work. The Agency asserts that it has determined that specific work should be assigned to new employees for training purposes and that this decision is precisely the kind of decision protected by the Statute and abrogated by the Arbitrator. Therefore, the Agency argues that the award is contrary to law.

2. The Union

The Union contends that the Arbitrator's award is not contrary to section 7106 of the Statute. Initially, the Union claims that the contractual language enforced by the Arbitrator is plain and unambiguous. According to the Union, Article 14 requires the Agency to release employees who rank lowest on the release/recall list first and those who rank highest last. Therefore, the Union contends that the agreement required the Agency to place new hires at the bottom of the list, releasing them before experienced seasonal employees. The Union asserts that the dispute between the parties centered on when the trainees must be placed on the release/recall list. According to the Union, Article 14 procedures are used whenever there is a lack of work for any seasonal employee at the Agency. The Union also claims that the Arbitrator did not decide that experienced seasonal employees must always be recalled before new employees are trained. Rather, the Union maintains that the award applies only if trainees are performing live work and other qualified employees ranked higher on the release/recall list are in a nonwork status.

The Union further contends that Article 14 is an arrangement for employees adversely affected by the Agency's rights to layoff and recall employees and, as enforced by the Arbitrator, does not abrogate management's rights. The Union argues that the Agency is able to release the necessary number of employees in the appropriate classification and grade while retaining the most productive and qualified employees. In this regard, the Union claims that the Agency may assign skills and retain the best performers during layoff, assign available work to qualified employees during layoff, and train new employees or assign them live work. However, the Union asserts that the Arbitrator determined that Article 14 procedures apply when employees are in nonwork status and that the Agency may not retain employees at the bottom of the release/recall list while employees who rank higher on the list are in a nonwork status. In addition, the Union argues that the Agency may assign live work to trainees, even if there is a work shortage, as long as higher ranked employees on the release/recall list are in pay status. The Union claims that the Agency's exception is "an attempt to relieve one party from the unwelcome result of the purposeful choice it made in negotiations." Opposition at 20.

B. Analysis and Conclusions

1. Management's Rights Under Section 7106(a)

For the following reasons, we find that the Agency has not established that the award is contrary to law because it abrogates management's rights under section 7106(a)(2)(A) or (B) of the Statute.

In Customs Service, we reexamined our approach to cases in which an agency contends that an arbitrator's award, enforcing a provision of the parties' collective bargaining agreement, is contrary to management's rights under section 7106(a). We held that when an agency makes such a contention we will examine, as appropriate, the provision enforced by the arbitrator to determine: (1) if it constitutes an arrangement for employees adversely affected by the exercise of a management right; and (2) if, as interpreted by the arbitrator, it abrogates the exercise of a management right. We explained that if it is evident that the provision constitutes an arrangement and, as interpreted by the arbitrator does not abrogate management's rights, the provision is within the range of matters that can be bargained under the Statute. Accordingly, we held that we will not find that such an award is contrary to law and we will deny the exception. We also held that if the arbitrator's interpretation does result in an abrogation of management's rights under section 7106(a), the award will be found deficient as contrary to law, but the contractual provision, susceptible to a different and sustainable interpretation by a different arbitrator, will not be affected.

We also noted in Customs Service that an arbitrator's award is deficient if it fails to draw its essence from the parties' agreement. We encouraged the parties to set forth plainly and precisely the arrangements to which they have agreed for employees adversely affected by the exercise of management's rights. We held that when a party establishes that the arbitrator's enforcement of the agreement does not represent a plausible interpretation of the agreement, or evidences a manifest disregard of the agreement, we will find the award deficient. In such a circumstance, however, the award will be found deficient because it fails to draw its essence from the agreement, not because it conflicts with management's rights.

Applying that approach in this case, we find that the Agency fails to establish that the award abrogates its management rights to lay off and retain employees, to assign work and to determine the personnel by which agency operations shall be conducted under sections 7106(a)(2)(A) and (B) of the Statute. Instead, the Arbitrator has enforced a provision of the parties' collective bargaining agreement which constitutes an arrangement for employees adversely affected by the exercise of management's rights to lay off and retain employees, to assign work and to determine personnel.

As conceded by the Agency, Exceptions at 13-14, Article 14 of the parties' agreement addresses the concerns of employees adversely affected by management's exercise of its rights to lay off and retain employees. The Arbitrator stated that Article 14 was "designed to give senior seasonal employees . . . a work preference over less senior employees[.]" Award at 21. The Union argued that the procedures set forth in Article 14 apply when there is a lack of work for any seasonal employees in a branch of the Agency. The Arbitrator agreed and found that the Agency violated the agreement when it assigned live work to trainees while experienced seasonal employees remained in nonwork status. In our view, the Arbitrator merely enforced a provision of the parties' agreement that constitutes an arrangement for employees adversely affected by the Agency's rights to lay off and retain employees in response to seasonal changes in its workload. We find that the Arbitrator enforced an arrangement that assures employees that they will be laid off on a fair and objective basis.

Further, we find that Article 14, as interpreted and applied by the Arbitrator, does not abrogate the Agency's rights to lay off and retain employees. In Customs Service, the Authority held that an award "abrogates" a management right when the award "precludes an agency from exercising[]" that right. Customs Service, 37 FLRA at 314. The Arbitrator's award does not preclude the Agency from exercising its rights to lay off and retain employees. Rather, the award only requires the Agency to comply with the terms of Article 14, which provide procedures for releasing and recalling seasonal employees. The Agency remains free to determine when there is a shortage of work that necessitates the execution of the release/recall procedures of Article 14. The Agency may also decide how many employees to release in the appropriate classification and grade while retaining the most productive and qualified employees. In addition, the Agency need only return released employees to work status as the demand for them increases.

We further find that the award does not preclude the Agency from exercising its right to assign work or from exercising its right to determine the personnel by which agency operations shall be conducted. Under the award, the Agency may continue to assign live work to new employees as part of their training program as long as it does not ignore its obligations to the experienced seasonal employees by failing to follow the release/recall procedures contained in Article 14. As interpreted by the Arbitrator, Article 14 permits the Agency to rank employees based on their skills and to retain only the most qualified employees during work shortages. Thus, it is the Agency that determines those qualifications and assigns available work to qualified employees during layoffs.

The Agency is correct in asserting that management rights under section 7106(a) of the Statute cannot be waived or relinquished through collective bargaining. See Southwestern Power Administration and International Brotherhood of Electrical Workers, Local 1002, 22 FLRA 475, 476 (1986). However, where an arrangement for employees adversely affected by the exercise of a management right has been negotiated by the parties and, as interpreted and applied by an arbitrator, the provision does not abrogate management's rights, that provision and its enforcement do not constitute a waiver of management's rights. See Customs Service, 37 FLRA at 316. Based on the above, we find no merit in the Agency's contention that the award is deficient because it abrogates management's rights under 7106(a) of the Statute.

2. Management's Right Under Section 7106(b)(1)

The Agency contends that the award is contrary to management's right to determine the numbers, types, and grades of employees assigned to any work project under section 7106(b)(1) of the Statute. For the reasons that follow, we conclude that the Agency has failed to establish that the award is deficient in this respect.

In U.S. Department of Health and Human Services, Social Security Administration, Kansas City, Missouri and American Federation of Government Employees, Local 1336, 37 FLRA 816, 824-27 (1990), we reexamined our approach to cases in which an agency contends that an arbitrator's award is contrary to management's rights under section 7106(b)(1). We stated that we will not apply the approach set forth in Customs Service because section 7106(b)(1) concerns matters over which an agency may elect to bargain and the abrogation standard of Customs Service is not applicable to such matters. Id. at 824. Accordingly, we held that when an agency claims that an award is contrary to section 7106(b)(1), we will examine the award and the record to determine whether the award has merely enforced a provision of the parties' collective bargaining agreement which, as interpreted by the arbitrator, constitutes the parties' agreement on the section 7106(b)(1) matter in dispute. Id. at 824-25. We stated that if the award merely enforces the parties' agreement, we will deny the exception. Id. at 825. We also stated that we will find the award deficient when the award interferes with the exercise of a management right under section 7106(b)(1) and does not constitute the enforcement of the parties' agreement on the section 7106(b)(1) matter in dispute. Id.

Applying the foregoing to the instant case, we find that the award ordering the Agency to refrain from assigning live work to trainees while experienced seasonal employees are in a nonwork status does not interfere with management's right to determine the numbers, types or grades of employees assigned to a work project. Article 14, section 2 provides that when it becomes necessary to place any or all of the seasonal employees in a branch in a nonwork status, the Agency will use the procedures contained in that provision. In our view, Article 14, section 2 represents the Agency's election to bargain over the type of employees that are in positions covered by the release/recall provisions of Article 14.

The Arbitrator found that under the provisions of Article 14, trainees must be ranked below experienced seasonal employees on the release/recall list. Consequently, the Arbitrator determined that when there is a shortage of work, the parties' agreement does not permit the Agency to assign the available work to trainees while higher ranked seasonal employees are in a nonwork status. Insofar as the Agency is arguing that the award interferes with its right under section 7106(b)(1) to determine the numbers, types, and grades of employees in those positions, the Arbitrator was merely enforcing the release/recall provisions of the agreement, and the Agency is disagreeing with his interpretation of those provisions. Thus, we conclude that the award enforced a provision of the parties' agreement on the section 7106(b)(1) matter in dispute and that the Agency has provided no basis for finding the award deficient.

IV. Second Exception

A. Positions of the Parties

1. The Agency

The Agency contends that the Arbitrator's award is deficient because it is based on a nonfact. The Agency claims that the Arbitrator's conclusion that the Agency must recall all seasonal employees in nonwork status before it may assign live work to any trainee is an erroneous interpretation of the release/recall provision of the agreement. According to the Agency, there is nothing in the language of the provision nor any evidence of bargaining history from which the Arbitrator could have drawn such a conclusion.

The Agency asserts that there is nothing in the contractual language that addresses when it will recall employees. Rather, the Agency claims that the provision specifies only the order in which the Agency will recall employees. In addition, the Agency claims that the Arbitrator mischaracterized the release/recall list as a "'species of seniority protection.'" Exceptions at 18, quoting Award at 21. The Agency asserts that the release/recall list is established according to employees' performance ratings and says nothing regarding their length of service. Therefore, the Agency argues that the Arbitrator misunderstood the purpose of the release/recall provision and based his finding on an erroneous central fact, but for which a different result would have been reached.

The Agency further contends that the award does not draw its essence from the parties' agreement because the Arbitrator's interpretation of the agreement is unreasonable. The Agency states that the Arbitrator agreed with its argument that it would be unreasonable to require the Agency to release trainees when they finish classroom training and are ready to perform live work during on-the-job training. However, the Agency asserts that the solutions to the Agency's dilemma proffered by the Arbitrator are unreasonable and unworkable. The Agency claims that it could not recall all the employees on the release list and assign them other work in the branch or detail them to other branches because there is no other work. The Agency argues that it would have already recalled the employees on the list if there were other work at the Agency or its branches. In addition, the Agency argues that it could not justify placing the employees on the release/recall list on administrative leave "[i]n this era of concern about waste and abuse[.]" Exceptions at 20.

2. The Union

The Union contends that the Agency's assertion that the release/recall provisions of Article 14 do not apply to training is without merit. The Union explains that Article 14, section 2(B)(2)(c) "specifically refers to 'newly-hired seasonal employees who do not have performance appraisals'" and states that the Agency is to place those employees on the bottom of the release/recall list until they are evaluated for the next list. Opposition at 20. The Union asserts that Article 14, section 2(B)(2)(d) requires the Agency to rank new employees who do not have training test scores according to their OPM certificate scores and that those employees must be placed below new hires with training test scores. The Union argues that the ranking of trainees by their training test scores or OPM certificate scores demonstrates that Article 14 applies to trainees and requires that the Agency place those employees on the current release/recall list before the next list is created.

The Union also contends that the Agency has failed to prove that the award does not draw its essence from the parties' agreement. The Union claims that the Arbitrator did not require the Agency to detail experienced seasonal employees to other branches, find other work for them at the Agency or place them on administrative leave when employees perform live work during slow periods. Instead, the Union argues that the Arbitrator stated that these options were merely alternatives available for the Agency in order to continue its preferred method of training new employees without violating Article 14 of the agreement. The Union claims that the Arbitrator interpreted the agreement to mean only that the Agency must place new employees at the bottom of the release/recall list before the the new employees perform live work. Therefore, the Union argues that the Agency's arguments constitute mere disagreement with the Arbitrator's reasoning and conclusions and provide no basis to set aside the award.

B. Analysis and Conclusions

We construe both of the Agency's contentions that the Arbitrator erroneously interpreted Article 14 of the parties' agreement as contentions that the award fails to draw its essence from the agreement. To demonstrate that an award is deficient because it fails to draw its essence from a collective bargaining agreement, a party must show that the award: (1) cannot in any rational way be derived from the agreement; (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; (3) evidences a manifest disregard for the agreement; or (4) does not represent a plausible interpretation of the agreement. See, for example, U.S. Department of the Navy, Naval Aviation Depot, Norfolk, Virginia and International Association of Machinists and Aerospace Workers, Local 39, 42 FLRA 322, 326 (1991).

We find that the Agency has not established that the award fails to draw its essence from the parties' agreement. Rather, the Arbitrator's conclusion that Article 14 required the Agency to rank trainees for release and recall before they do live work while other seasonal employees are in nonwork status has a reasonable basis in the parties' agreement. In fact, Article 14, section 2(B)(2)(c) specifically provides for the placement of newly hired seasonal employees on the release/recall list.

Further, contrary to the Agency's contention, the Arbitrator did not require the Agency to recall all seasonal employees in nonwork status before it may fully train newly hired employees. Rather, the Arbitrator concluded that the Agency may continue to assign live work to trainees as part of their on-the-job training but, at the same time, may not disregard its obligations to its experienced seasonal employees under the release/recall provisions of Article 14. The award did not require the Agency to detail experienced seasonal employees, place them on administrative leave, or assign them to other work in the branch. Rather, the Arbitrator merely suggested that the Agency's use of any of these alternatives would not violate the release/recall provisions of Article 14. In our view, the Arbitrator's award was not irrational, unreasonable or implausible. Accordingly, we conclude that the Agency's exception constitutes mere disagreement with the Arbitrator's interpretation and application of the parties' agreement and provides no basis for finding the award deficient.

V. Decision

The Agency's exceptions are denied.

APPENDIX

The relevant provisions of the collective bargaining agreement are as follows:

Article 14

Release/Recall of Seasonal and Career/Career Conditional Intermittent Employees

. . . .

Section 2 Seasonal Release/Recall Procedures

A. Release of Seasonal Employees

When it becomes necessary to place any or all of the seasonal employees in a branch . . . in a nonwork status, the Employer will use the following procedures.

1. Canvass employees, in the skills area affected in the branch to determine if a sufficient number of employees wishes to accept a voluntary release.

2. The Employer has determined that if, as a result of the canvass, more employees wish to be released than is necessary, the employees with the earliest service computation dates will be released. If the canvass does not result in a sufficient number of voluntary applications for release, subsequent placement of employees in nonwork status will be based on a ranking of employees who possess the skills required to perform the remaining work, as set forth in B below.

3. This ranking will be reflected on a list to be known as the release/recall list (seasonals).

4. The Employer has determined that those who rank the lowest on the release/recall list will be placed in a nonwork status first and those ranking highest, last.

B. Ranking Seasonal Employees for Release

1. Employees performance appraisals based on the critical elements and performance standards of their positions will be used to rank employees as follows:

(a) add the numerical ratings for each critical element;

(b) divide the total in (a) above by the number of critical elements;

(c) the result in (b) above is the number of points that are assigned the performance evaluation for ranking purposes.

2. The release/recall list will be constructed as follows:

(a) list all seasonal employees in the appropriate organizational area on a release/recall list according to the score obtained in 1 above;

(b) those seasonal employees with the highest score will be at the top of the list, those with the lowest at the bottom, and employees will be informed of their position on the list;

(c) newly-hired seasonal employees who do not have performance appraisals consistent with the provisions of subsection 4B1 of this article will be placed on the bottom of the release/recall list by their training test scores until such time as they are evaluated for the next list;

(d) for those seasonal employees who do not have performance appraisals or training test scores, ranking will be accomplished by placing them on the list below those employees with training test scores by their score on the OPM certificate.

3. The Employer has determined that ties in ranking will be broken as follows:

(a) first by quantity effectiveness;

(b) then by overall quality effectiveness;

C. Recall of Seasonal Employees

1. The order of recall will be based on the release/recall list.

2. The Employer has determined that those highest on the list who possess the specific skills needed will be recalled first, those lowest on the list, last.




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

1/ The text of relevant sections of Article 14 is found in the Appendix to this decision.

2/ Section 17 of the Total Evaluation Performance System (TEPS) requires in relevant part that "employees will be ranked for r