45:1411(137)AR - - U.S. DEPARTMENT OF DEFENSE OFFICE OF DEPENDENTS SCHOOLS and OVERSEAS EDUCATION ASSOCIATION - - 1992 FLRAdec AR - - v45 p1411



[ v45 p1411 ]
45:1411(137)AR
The decision of the Authority follows:


45 FLRA NO. 137

U.S. DEPARTMENT OF DEFENSE
OFFICE OF DEPENDENTS SCHOOLS
(Agency)

and

OVERSEAS EDUCATION ASSOCIATION
(Union)

0-AR-2257

                                DECISION

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 H. Morton Rosen 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 determined that the Agency had violated
Department of Defense (DoD) Directive 1400.13 by failing to
convert a group of teachers in temporary positions to permanent
positions. We conclude that the Agency fails to establish that
the award is deficient. Accordingly, we will deny the
exceptions.

II. Background and Arbitrator's Award

The Union filed a grievance alleging that the Agency had
violated DoD Directive 1400.13, as it pertains to conversions of
Agency teachers with temporary appointments to permanent
appointments. The Union claimed that a group of teachers in
temporary positions was entitled to have been converted to
permanent positions because each teacher had met the
conditions of the directive for conversion as of the beginning of
the 1990-91 school year. The Union argued that under the
directive, conversion was mandatory and that the Agency had
violated the directive by failing to convert the teachers. The
Agency denied the grievance on the basis that the grievance was
not grievable and arbitrable. The Agency claimed that the
grievance concerned conversion from temporary to permanent
appointments and that, therefore, the grievance was precluded
because it concerned appointments. The Agency also denied the
grievance on the basis that under the circumstances, the
grievants were not entitled to have been converted. The grievance
was not resolved and was submitted to arbitration on the issues
of whether the grievance was grievable and arbitrable and whether
the Agency had violated the directive.

The Arbitrator determined that the grievance was grievable
and arbitrable. The Arbitrator agreed with the Union that the
grievance concerned conversion and not appointment.

On the merits, the Arbitrator noted that the applicable
provisions of DoD Directive 1400.13, section IV.D.1 provide as
follows:

    b. ...Upon satisfactory completion of a cumulative period of
    8 calendar months during one or more school years in a part or
    full-time position with the DoD Overseas Dependents' Schools
    System, the educator may be selected for conversion to an
    Excepted Appointment - Conditional at the end of the current
    school year.

    c. A fully qualified educator appointed in the United States
    or who has previously served at least 8 calendar months in a part
    or full-time position with the DoD Overseas Dependents' Schools
    System will, upon appointment to a continuing part or full-time
    position, be given an Excepted Appointment - Conditional, unless
    eligible for an Excepted Appointment without condition.

    f. Whenever reasonable doubt exists that an educator's
    services will be needed or available for a full school year an
    educator appointed to a part or full-time position may 
    be given a temporary limited appointment for the period of actual
    need.

Award at 8 (quoting the directive).

The Arbitrator determined that when a teacher meets the
conditions of subsection c, the Agency must convert the teacher.
The Arbitrator noted that the Agency conceded that the grievants
met the conditions of having served at least 8 months in a
part-time or full-time position with the Agency. The Agency's
argument was that the grievants were not entitled to have been
converted because they had not been appointed to continuing
part-time or full-time positions.

The Arbitrator rejected the Agency's argument. The
Arbitrator found that the objective evidence demonstrated that
the grievants were appointed to continuing positions. In the
Arbitrator's view, the most important evidence was the Agency's
use of the standard form (SF) 50 in appointing the grievants for
the 1990-91 school year. The Arbitrator found that the use of the
end of the school year as the not to exceed (NTE) date of the
grievants' appointments indicated that the position appointments
were to last the entire school year. The Arbitrator also noted
that the fact that the positions did last the entire school year
supported the Union's claim that the positions were needed for
the entire year.

The Arbitrator was not persuaded otherwise by the testimony
of the Agency's personnel director that "the placing of the NTE
date at the end of the school year, instead of at a mid-point of
the school year, was done because of laziness and was not
intended to convey a notion that the job was meant to be
permanent" and that "this lazy use of the SF 50 form was not done
at his direction." Id. at 9. The Arbitrator also rejected the
Agency's reliance on subsection f of the directive. He found that
in order for subsection f to be consistent with subsection c,
subsection f applies only when the teacher has not already been
appointed to a continuing part-time or full-time position. In
addition, the Arbitrator was not persuaded by the Agency's
contention that it had a reasonable doubt as to whether the
grievants' services would be needed for the full school year. The
Arbitrator found that despite the expressed concerns of the
Agency, staffing problems did not occur in school year 1990-91.
Because of this and situations in school years 1988-89 and
1989-90, in which the Agency failed to convert eligible teachers
until grievances were filed, the Arbitrator concluded that "the
Agency is over-sensitive in its demand for staffing
flexibility." Id. at 10.

Accordingly, the Arbitrator sustained the grievance and
directed that all the grievants be converted effective the first
day of the school year 1990-91 and otherwise be made whole. With
respect to grievants who were terminated on the expiration of
temporary appointments that should have been converted, the
Arbitrator ordered them reinstated retroactively with backpay and
benefits pursuant to the Back Pay Act.

III. Preliminary Matter

In its opposition, the Union contends that the Agency's
exceptions should be dismissed for lack of jurisdiction insofar
as the award relates to the grievants who were terminated at the
expiration of their temporary appointments. The Union argues that
those employees were removed, and that under section 7122(a), the
Authority does not have jurisdiction over awards that relate to
removals.

Under section 7122(a) of the Statute, exceptions may not be
filed with the Authority to an arbitration award relating to a
matter described in section 7121(f) of the Statute. The matters
described in section 7121(f) include adverse actions under 5
U.S.C. 7512, such as removals, that have been taken against
employees, as defined in 5 U.S.C. 7511. For example, U.S.
Department of the Army, Army Reserve Personnel Center and
American Federation of Government Employees, Local 900, 34 FLRA 
319, 321 (1990) (Army Reserve Personnel Center). The matters
described in section 7121(f) also include matters similar to
those covered under section 7512 that arise in another personnel
system, such as the system established by the Defense Department
Overseas Teachers Pay and Personnel Practices Act, 20 U.S.C.
901-907 for Agency teachers. For example, U.S. Department of
Defense Dependents Schools, Germany Region and Overseas Education
Association, 38 FLRA 1432, 1435 (1991).

In Army Reserve Personnel Center, we found that the grievant
was not an employee within the meaning of section 7511 because
she was a temporary employee whose appointment was limited to 1
year or less. We concluded that because the grievant was not an
employee under section 7511, her termination was not an adverse
action covered by section 7512. 34 FLRA at 321 (citing Horner v.
Lucas, 832 F.2d 596, 597 (Fed. Cir. 1987); Compton v. Department
of the Navy, 31 MSPR 402 (1986)). Accordingly, we asserted
jurisdiction because the award did not relate to a
matter covered by section 7121(f) of the Statute.

In this case, because the grievants who were terminated were
temporary employees, we similarly find that their terminations
were not matters similar to those covered under section 7512.
Accordingly, we conclude that the portion of the award pertaining
to these grievants does not relate to a matter described in
section 7121(f) and that the Agency's exceptions to the award are
properly before us under section 7122(a) of the Statute.

IV. First Exception

A. Positions of the Parties

1. The Agency

The Agency contends that the award is deficient because it
is contrary to section 7121(c)(4) of the Statute and Federal
Personnel Manual (FPM) Supplement 296-33, subchapter S11-2. The
Agency argues that section 7121(c)(4) precludes grievances
concerning appointments and notes that the section does not limit
the preclusion to only initial appointments. The Agency further
argues that the award conflicts with the FPM definition of
conversion, which defines a conversion as a change "from one
appointment to another appointment...." FPM Supplement 293-33,
subchapter S11-2(b). The Agency maintains that because a
conversion, in fact, concerns an appointment, a grievance
concerning conversion is not grievable or arbitrable under
section 7121(c)(4). The Agency also maintains that, like the
award in Internal Revenue Service, Indianapolis District and
National Treasury Employees Union, Chapter 49, 29 FLRA 232
(1987) (IRS, Indianapolis), the award in this case impermissibly
orders the grievants converted to permanent appointments and is
contrary to law.

2. The Union

The Union contends that the grievance is not precluded by
section 7121(c)(4). The Union argues that the grievance concerned
whether the Agency violated DoD Directive 1400.13 when it refused
to convert the grievants and did not concern a matter of
appointment. The Union claims that all the grievants have already
been appointed and the grievance did not concern the requirements
of those appointments.

The Union also contends that the Agency's reliance on FPM
Supplement 296-33 is misplaced. The Union argues that 
the FPM definition is not a mandatory regulation that provides a
basis on which the award can be found deficient. The Union also
argues that grievances concerning appointments precluded by
section 7121(c)(4) do not encompass grievances concerning
conversions, notwithstanding the FPM definition defining
conversion as a change from one appointment to another. The Union
asserts that the Authority has not found that grievances
concerning appointments after a grievants initial appointment are
precluded by section 7121(c)(4). Finally, the Union argues that
IRS, Indianapolis does not support the Agency's contention that
grievances over conversions are precluded by law.

B. Analysis and Conclusions

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

In National Council of Field Labor Locals of the American
Federation of Government Employees, AFL - CIO and United States
Department of Labor, 4 FLRA 376 (1980) (DOL), the Authority
specifically addressed the meaning of the term "appointment" as
used in section 7121(c)(4) of the Statute. The Authority examined
the legislative history of the Statute and relevant laws and
regulations. On the basis of its examination, the Authority
determined that "general usage of the term 'appointment' refers
to the action which takes place at the time an individual is
initially hired into the Federal service." 4 FLRA at 381. In
DOL, the Authority applied the term "appointment" in section
7121(c)(4) consistent with this common usage in finding that a
grievance over the separation of a probationer was not precluded
by the Statute. The Authority adhered to this application of
section 7121(c)(4) in United States Information Agency and
American Federation of Government Employees, Local 1812, 32 FLRA 
739, 748 (1988), in concluding that a grievance concerning the
temporary assignment of an employee was not precluded by the
Statute. We will continue to adhere to this usage of the term
"appointment" in applying section 7121(c)(4) of the Statute.
Accordingly, because the grievance in this case did not concern
the initial appointments of the grievants, we conclude that no 
basis is provided for finding that the grievance in this case is
precluded by section 7121(c)(4) of the Statute.

Because this exception concerns the Arbitrator's
determination that the grievance was not precluded by section
7121(c)(4) of the Statute, we agree with the Union that
the Agency's reliance on the FPM definition of conversion in FPM
Supplement 296-33 is misplaced. FPM Supplement 296-33 in no 
manner specifies that grievances over conversions from temporary
appointments to permanent appointments concern appointments
within the meaning of section 7121(c)(4) of the Statute. In our
view, the Agency is merely disagreeing with the Arbitrator's
reasoning and conclusions in determining that the grievance in
this case was not precluded by the Statute. Such disagreement
provides no basis for finding the award deficient. See, for
example, U.S. Department of the Interior, Bureau of Reclamation,
Grand Coulee Project Office and Columbia Basin Trades Council, 42
FLRA 166, 170 (1991).

We also agree with the Union that the Agency's reliance on
IRS, Indianapolis is misplaced. The Authority in IRS,
Indianapolis did not find that the award was precluded by section
7121(c)(4) of the Statute. Instead, the Authority found that the
award was deficient because the award precluded the agency's
authorized employment of a seasonal employee. 29 FLRA at 234. In
this case, the Agency makes no such argument in its exception,
and, consequently, we conclude that IRS, Indianapolis provides no
basis for finding the award deficient.

Accordingly, we will deny the Agency's exception.

V. Second Exception

A. Positions of the Parties

1. The Agency

The Agency contends that the award is contrary to section
7106(b)(1) of the Statute. The Agency maintains that the
conversion of teachers from temporary to permanent appointments
pertains to the numbers and types of positions within the Agency
and that it has not elected to bargain over the matter. The
Agency argues that by ordering the retroactive conversion of
approximately 200 teachers from temporary appointments to
permanent appointments, the award interferes with its retained
right under section 7106(b)(1) to determine the number and types
of positions within the Agency and that, consequently, the award
is deficient.

2. The Union

The Union contends that the Agency is confusing arbitration
with negotiability principles. The Union states that it did not
submit bargaining proposals concerning the conversion of
teachers from temporary to permanent positions and that it did
not bargain with management over conversions. The Union notes
that the obligation to convert employees was directly prescribed
by the Agency's own regulation. Thus, the Union asserts that the
Agency's argument that its right to determine numbers and types
of employees or positions is somehow interfered with by
enforcement of its own regulation is without merit.

Alternatively, the Union contends that the conversion
ordered by the Arbitrator does not interfere with management's
right to determine the numbers and types of employees. In
particular, the Union disputes that the award would require the
Agency to increase by approximately 200 its number of permanent
positions. The Union argues that for school year 1990-91, the
Agency had over 600 permanent positions that were filled by new
teachers. Thus, the Union claims that the award does not
interfere with management's right because a sufficient number of
permanent positions were available for conversion of the
grievants.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the
award is deficient on the ground that it is contrary to the
Statute.

This case involves a grievance over the claimed violation of
provisions of DoD Directive 1400.13, pertaining to the conversion
of temporary teachers. The Arbitrator found a violation of the
directive and enforced the terms of the directive in ordering the
grievants to be converted retroactively. The Agency contends that
the provisions pertaining to conversion concern matters covered
by section 7106(b)(1) of the Statute. We agree.

In Overseas Education Association and U.S. Department of
Defense, Office of Dependents Schools, 45 FLRA No. 118 (1992)
(Proposals 6 and 7), we held that determinations as to whether an
employee holding a temporary appointment should be converted to a
permanent appointment are matters directly related to the numbers
and types of employees or positions under section 7106(b)(1) of
the Statute. However, because this is not a negotiability case,
but an arbitration case in which the Arbitrator has enforced the
terms of an agency regulation affecting conditions of employment,
we also agree with the Union that negotiability cases involving
the right to elect not to bargain are not dispositive of the
outcome of this case. 

The U.S. Supreme Court has made clear that some external
limitations on management rights under section 7106 are
enforceable in arbitration. In IRS v. FLRA, 494 U.S. 922, 924
(1990) (IRS), the Court recognized that, unlike the framework for
grievances and arbitration in the private sector, in the Federal
sector a collective bargaining agreement must provide for
procedures for the settlement of grievances, which are defined to
include any complaint concerning any claimed violation,
misinterpretation, or misapplication of any law, rule, or
regulation affecting conditions of employment. In IRS, the Court
examined this scheme and concluded that with respect to
management rights under section 7106(a)(2) of the Statute, the
negotiated grievance procedure is available to unions and
employees to enforce certain external limitations contained in
"applicable laws." 494 U.S. at 931 (quoting section
7106(a)(2)).

The prefatory language to section 7106(b)(1) is different
from the prefatory language to section 7106(a)(2). Where the
prefatory language to section 7106(a)(2) states that, subject to
subsection (b) of that section, nothing in the Statute shall
affect the authority of management, in accordance with applicable
laws, to exercise the enumerated rights, the prefatory language
to section 7106(b)(1) merely states that nothing in section 7106
shall preclude the agency and the union, at the election of the
agency, from negotiating over the enumerated matters. In U.S.
Department of Justice, Immigration and Naturalization Service,
United States Border Patrol, San Diego Sector, San Diego,
California, 38 FLRA 701 (1990) enforcement denied as to other
matters, Case No. 91-70162 (9th Cir. June 22, 1992), we
recognized that the prefatory language to section 7106(a)(2) on
which the Court focused in IRS does not, by its own terms, apply
to section 7106(b)(1). Accordingly, we held that the Court's
analysis, which was based on the language of section 7106(a)(2),
was not applicable to matters involving section 7106(b)(1).

Because section 7106(b)(1) does not have the constraining
prefatory language of section 7106(a)(2), we find that the
external limitations on management's rights under section
7106(b)(1) that are enforceable in arbitration are more extensive
than those relating to management's rights under section
7106(a)(2). In particular, in view of the status of agency
regulations in arbitration, we conclude that an agency regulation
pertaining to a matter enumerated in section 7106(b)(1) may
constitute an external limitation on management's rights that is
enforceable in arbitration. 

In U.S. Department of the Army, Fort Campbell District,
Third Region, Fort Campbell, Kentucky and American Federation of
Government Employees, Local 2022, 37 FLRA 186 (1990) (Ft.
Campbell), we discussed in detail the status of agency
regulations in the context of arbitration. We recognized that
each Federal agency prescribes rules, regulations, and official
declarations of policy to govern and control the resolution of
matters to which they apply within the agency. We noted the
decision in Local 2855, AFGE v. U.S., 602 F.2d 574, 581 (3d Cir.
1979), in which the court recognized that, under 5 U.S.C. 301,
Congress has invested the heads of every executive and military
department with general authority to prescribe regulations for
the governing of their departments and the conduct of their
employees, and that, under 5 U.S.C. 302, the heads of departments
are permitted to delegate to subordinate officials the authority
to take final action on matters pertaining to the employment,
direction, and general administration of personnel of their
agencies. 37 FLRA at 194. We also noted that the dominance of
agency rules and regulations was acknowledged by the U.S. Supreme
Court in Fort Stewart Schools v. FLRA, 495 U.S. 641 (1990), when
the Court stated that "(i)t is a familiar rule of administrative
law that an agency must abide by its own regulations." 495 U.S.
at 654 (citing Vitarelli v. Seaton, 359 U.S. 535 (1959)
(Vitarelli) and Service v. Dulles, 354 U.S. 363 (1957)).
Consequently, we concluded in Ft. Campbell that an applicable
agency regulation governs the disposition of the matter resolved
by an arbitration award when there is no applicable collective
bargaining provision.

Applying the analysis of Ft. Campbell to the issue in this
case, we hold that when an agency regulation pertaining to a
matter covered by section7106(b)(1) of the Statute governs the
disposition of a grievance, it is consistent with management's
rights under section 7106(b)(1) to enforce that regulation in
arbitration. In holding that such a regulation is enforceable as
an external limitation on management's rights, we emphasize that
the focus of section 7106(b)(1) is to permit bargaining while, at
the same time, preserving management's right to elect not to
bargain over the enumerated matters. In enforcing agencies' own
regulations, arbitrators will not be forcing agencies to assume
contractual obligations in the face of an election not to
bargain, and agencies will not be committed to the regulatory
provision for the term of a collective bargaining agreement.
Instead, arbitrators will be enforcing only existing obligations
as currently set forth in the agencies' own regulations. Because
these obligations will remain regulatory and not contractual, the
agencies retain the right to revise or rescind the
regulatory obligation at any time. Compare National Treasury
Employees Union Chapter 213 and 228 and United States Department
of Energy, Washington, D.C., 32 FLRA 578, 586-87 (1988) (the
Authority rejected the union's claim that a proposal was
negotiable because it was consistent with the provision of an
agency regulation; the Authority noted that the regulation
conflicted with management's rights and that incorporation of
those restrictions into the collective bargaining agreement would
require management to comply with them for the term of the
agreement regardless of whether the agency revised or rescinded
the regulation).

In our view, this approach harmonizes IRS, Ft. Campbell, and
the Statute. A grievance over the claimed violation,
misinterpretation, or misapplication of an agency regulation
affecting conditions of employment may be submitted for
resolution by an arbitrator, as contemplated by Congress in
defining "grievance" in section 7103(a)(9) and in providing for
binding arbitration in section 7121, while an agency's right
under section 7106(b)(1) to elect not to bargain over the matters
enumerated in that section is preserved and remains unaffected.
Because these provisions are unique to the Federal sector, such
an issue would never arise in the private sector.

Applying this approach in this case, we conclude that no 
basis is provided for finding the award contrary to section
7106(b)(1) of the Statute. We find that DoD Directive 1400.13
governs the conversion of teachers from temporary appointments to
permanent appointments and that, consequently, the regulation was
enforceable by the Arbitrator consistent with section 7106(b)(1)
of the Statute. As we advised in U.S. Department of Defense, Army
and Air Force Exchange Service and American Federation of
Government Employees, 45 FLRA 674 (1992), an agency "must be
rigorously held to the standards by which it professes its
actions to be judged." 45 FLRA at 690 (quoting Vitarelli, 359
U.S. at 546 (Frankfurter, J., concurring in part and dissenting
in part)). Accordingly, we will deny the Agency's exception.

VI. Third Exception

A. Positions of the Parties

1. The Agency

The Agency contends that the award is based on a nonfact.
The Agency notes that the Arbitrator's conclusion that
the grievants were appointed to continuing positions was based on
his determination that there was a need for the grievants'
services for the full school year, as evidenced by the Agency's
use of the end of the school year as the NTE date on the SF 50.
The Agency asserts that such a finding is inconsistent with the
clear meaning of the term "not to exceed." The Agency claims that
the Arbitrator's determination that the term "not to exceed" is
synonymous with "must last until" is clearly erroneous. The
Agency maintains that because the award is based on this
erroneous conclusion, the award is deficient.

2. The Union

The Union contends that the Agency's exception constitutes
nothing more than disagreement with the Arbitrator's factual
findings and his reasoning and conclusions and that,
consequently, the exception provides no basis for finding the
award deficient. The Union asserts that the award is supported by
the facts presented to the Arbitrator and that the basis for the
Arbitrator's determination was more extensive than simply the NTE
date on the SF 50.

B. Analysis and Conclusions

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

We will find an arbitration award deficient because it is
based on a nonfact when the central fact underlying the award is
clearly erroneous, but for which a different result would have
been reached by the arbitrator. For example, U.S. Department of
the Air Force, San Antonio Air Logistics C