46:0298(27)AR - - DOD, Defense Mapping Agency Aerospace Center, St. Louis, MO and NFFE, Local 1827 - - 1992 FLRAdec AR - - v46 p298



[ v46 p298 ]
46:0298(27)AR
The decision of the Authority follows:


46 FLRA NO. 27

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF DEFENSE

DEFENSE MAPPING AGENCY

AEROSPACE CENTER

ST.LOUIS, MISSOURI

(Agency)

and

NATIONAL FEDERATION OF FEDERAL EMPLOYEES

LOCAL 1827

(Union)

0-AR-2193

DECISION

October 26, 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 James P. O'Grady filed by the Union 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 Agency filed an opposition to the Union's exceptions.

The grievance in this matter concerned the Agency's rescission of a negotiated placement program for employees who lose or are denied their security clearances. The Arbitrator denied the grievance, finding that the placement program abrogated management's rights and, consequently, that it did not constitute an enforceable arrangement under section 7106(b)(3) of the Statute. Therefore, the Arbitrator concluded that the Agency did not violate the parties' collective bargaining agreement by rescinding the placement program.

For the following reasons, we conclude that the award is deficient because it is contrary to law. In addition, the award fails to draw its essence from the parties' collective bargaining agreement in certain respects. Accordingly, we will set aside the award. We will also order the Agency to comply with the placement program.

II. Background

The issue as to whether the Agency had improperly rescinded the placement program was previously before the Authority in U.S. Department of Defense, Defense Mapping Agency Aerospace Center, St. Louis, Missouri and National Federation of Federal Employees, Local 1827, 39 FLRA 286 (1991) (Defense Mapping Agency). In our decision, we vacated the award of an arbitrator who found that the placement program excessively interfered with the exercise of various, though unspecified, management rights under section 7106(a) of the Statute and was an unenforceable agreement. We concluded that the award was deficient because the arbitrator did not address the Authority's decision in Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA 309 (1990) (Customs Service), which was issued subsequent to the arbitrator's award but while the case was pending before the Authority.

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 of the Statute. 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 management's rights; 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 an exception that contests the award as being inconsistent with management's rights. 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.

Applying Customs Service in Defense Mapping Agency, we found that the placement program constituted an arrangement for employees adversely affected by the exercise of management's rights. However, we also stated that because the arbitrator did not determine how the parties intended the placement program to be applied when an employee's security clearance is revoked, we were unable to determine whether the placement program abrogated the exercise of a management right. Therefore, we remanded the case to the parties for further processing in order to ascertain whether the arrangement abrogated the exercise of a management right or was an enforceable arrangement. Pursuant to the remand, the parties resubmitted the issue concerning the enforceability of the placement program to the Arbitrator in this case.

III. Arbitrator's Award

The Arbitrator initially examined the background of the dispute and the parties' positions regarding the placement program. The Arbitrator noted that the parties had negotiated the provision in April 1987, and that the placement program "attempts to place employees who either failed to obtain or who lost the security clearance required for the position into which they were hired." Award at 3.

As set forth in the Arbitrator's award, the placement program provides as follows:

POLICY WHEN SECURITY CLEARANCE/ACCESS IS REVOKED

1. The procedure set forth in DoD Regulation 5200.2-R, Personnel Security Program, for revocation of security clearance/access will be completed prior to taking adverse action against an employee on the basis of revocation of security clearance/access.

2. Prior to initiating action to terminate employment, the employee will be considered for reassignment to another position. Reassignment will be effected provided all of the following criteria are met.

a. A vacant position is available commensurate with the employee's personal qualifications and reduced security clearance.

b. No formal disciplinary actions were taken against the employee during the reckoning period.

c. The employee's performance rating at the time of suspension of clearance/access is Fully Successful or better.

d. Where more than one similarly situated employee qualify [sic] for the vacant position, the employee with the earliest service computation date shall be placed.

3. If reassignment cannot be effected, the employee may request voluntary change to lower grade to another position. The employee's request will be honored provided all four of the above criteria are met.

4. Individuals whose employment is terminated because of revocation of security clearance/access are not prohibited from seeking reemployment commensurate with personal qualifications and security clearance/access required.

Award at 3.

The Arbitrator noted that in October 1989, the Agency informed the Union that it would no longer abide by this agreement because it interfered with management's rights under section 7106(a) of the Statute. The Union thereupon filed a grievance. The grievance proceeded to arbitration and, as stated above, the arbitrator in the initial proceeding concluded that the placement program was an unenforceable arrangement because it excessively interfered with various unspecified management rights.

In resolving the issue on remand, the Arbitrator quoted the pertinent language of the parties' collective bargaining agreement and the management's rights provision contained in section 7106 of the Statute. The Arbitrator then examined the parties' positions. The Arbitrator summarized the Agency's arguments as contending that the placement program abrogates management's rights to fill positions and remove employees under section 7106(a)(2)(A) of the Statute and, further, that the rescission of the placement program did not violate the parties' agreement. The Arbitrator summarized the Union's position as consisting of three contentions: (1) the placement program does not abrogate management's rights; (2) the Agency has "abandoned the negotiated placement program;" and (3) the parties' agreement and the Statute have been violated. Award at 9. The Arbitrator also noted the Union's testimony that most bargaining unit positions require a security clearance as a condition of employment and that employees who lose their security clearance "can be and are fired for cause." Id. at 11. Additionally, the Arbitrator noted the Union's further contention that there are periodic assessments of employees' continued suitability for maintaining a security clearance and that employees can lose their clearances for reasons that are "flatly incorrect." Id. at 12.

After examining the record, the Arbitrator concluded that the placement program abrogates several management rights. Specifically, the Arbitrator found that the placement program abrogates the Agency's rights to: (1) assign employees; (2) determine its internal security practices; (3) determine the number of employees necessary to carry out the Agency's mission; (4) fill positions; and (5) remove employees.

With respect to the right to assign employees, the Arbitrator found that the Union did not directly respond to the Agency's claim that the placement program prevents it from exercising its right to fill vacancies with employees it chooses. Quoting the language of the placement program, the Arbitrator found that, once the criteria contained in the arrangement are met, "'[r]eassignment will be effected . . . .'" Id. at 13. On this basis, the Arbitrator concluded that the arrangement abrogates management's right to assign employees.

The Arbitrator also concluded that the Agency's right to determine its internal security practices is abrogated by the requirement that it place an employee. The Arbitrator rejected the Union's assertion that the Agency's internal security would be maintained because a reassigned employee would not be placed in a position that requires a security clearance. Instead, the Arbitrator found that the Agency's right to determine its internal security practices includes the placement of an employee and, because the placement program requires that a vacant position be filled if an employee meets the criteria set forth in the program, the program necessarily abrogates management's right.

The Arbitrator further found that the placement program abrogates the Agency's right to determine "the numbers of persons necessary to carry out its mission." Id. at 13-14. In this connection, the Arbitrator noted that positions may be vacant for budgetary reasons and that requiring the Agency to reassign an employee to a vacant position would result in the Agency being required "to carry an additional employee, preventing it from determining the number necessary to carry out its mission." Id. at 14.

The Arbitrator also found that the placement program abrogates management's right to fill positions. In this regard, the Arbitrator noted that the Agency had argued that the placement program's express wording "mandates the placement of a particular individual into a vacant position." Id. at 17. Based on this argument, the Arbitrator found that the program is "an absolute" that obligates the Agency to reassign an employee who minimally qualifies for a vacant position "regardless of the [Agency's] intentions regarding the position." Id. The Arbitrator also noted that the Agency occasionally "stockpile[s]" vacant positions in anticipation of a reduction-in-force (RIF) and that, according to the Agency, the placement program "would preclude it from temporarily holding the position vacant." Id. at 13, 17. Based again on the Agency's argument, the Arbitrator found that the arrangement abrogates management's right to fill positions under section 7106(a)(2)(C) of the Statute, which gives to management the right to make actual selections and to fill positions from properly ranked and certified candidates or through any other appropriate source.

Finally, the Arbitrator found that the placement program abrogates the Agency's right to remove employees under section 7106(a)(2)(A) of the Statute. The Arbitrator found that the placement program would require the Agency, in some cases, to retain an employee whom the Agency head had decided to remove for national security reasons under either 5 U.S.C. § 7532 or 5 U.S.C. §§ 7511-13. The Arbitrator concluded, therefore, that the placement program would preclude the removal of employees whom the Agency has discretion to remove and, consequently, that the program abrogates management's right to remove those employees.

In sum, the Arbitrator found that the Agency was precluded from exercising various management rights. The Arbitrator further found that the Agency "had no basis in law for either negotiating on this issue or including it as a part of the Agreement." Id. at 15. The Arbitrator reasoned that because the placement program abrogated management's rights, the Agency could cease to comply with it based on the position that "the placement procedure is non-negotiable." Id. at 16. Consequently, the Arbitrator concluded that the Agency "did not violate the [collective bargaining] Agreement by its rescission of the placement policy." Id. at 21.

IV. Union's Exceptions

The Union argues that the Arbitrator erred in finding that the negotiated placement program abrogates management's rights. The Union also contends that the award is deficient because it fails to draw its essence from the parties' negotiated agreement.

With regard to the first exception, the Union claims that the Arbitrator was obligated to determine how the placement program was intended to operate and that in doing so it was appropriate for the Arbitrator to consider the parties' intent in formulating the arrangement and the manner in which the arrangement works. The Union states that the parties' intent was "to lessen - when possible - the adverse effect of [the Agency's] decision exercising a management right." Exceptions at 4. The Union also explains that the placement program does not prevent the Agency from reassigning employees from sensitive positions. The Union adds that the Agency is not required to reassign unqualified or unacceptable employees; train employees; or establish positions into which employees can be reassigned. The Union further states that the placement program "served its intended purpose for approximately 18 months before being repudiated by the employer[,]" and that there was no showing that there were problems with the program during the period in which it was in effect. Id. at 6. Instead, the Union argues that the Agency set forth "speculative arguments" that are more "appropriate before the [Authority] and in a negotiability dispute prior to a negotiation but irrelevant after the consumation [sic] of an agreement." Id. at 6, 7.

The Union also refutes the Agency's arguments that the placement program abrogates management's right to fill positions or to remove employees. The Union argues, in this regard, that Federal Personnel Manual (FPM), chapter 335, subchapter 5 and regulations implementing 5 U.S.C. § 7532 provide the Agency with discretion to negotiate exceptions to its promotion plan and to negotiate an arrangement for those employees who lose or are denied a security clearance.

The Union also argues that the award is deficient because it fails to draw its essence from the parties' collective bargaining agreement. More specifically, the Union argues that the Arbitrator "ascribed an implausible interpretation to (the arrangement portion) of the Agreement." Id. at 9. The Union states that, in finding that the arrangement abrogates management's rights, the Arbitrator disregarded Article 2 of the parties' collective bargaining agreement. Among other things, Article 2 provides that Government-wide rules and regulations that were in effect prior to the effective date of the parties' agreement and that are in conflict with provisions of the agreement, take precedence over the agreement. Noting the Agency's argument that the arrangement could prevent it from stockpiling vacant positions in anticipation of a RIF, the Union contends that such a result would occur only if the arrangement took precedence over a Government-wide regulation. According to the Union, it is implausible that the parties would negotiate an arrangement that would operate in a manner contrary to the parties' collective bargaining agreement.

V. Agency's Opposition

The Agency argues that the Union has failed to establish that the award is deficient on any of the grounds set forth under section 7122(a) of the Statute. The Agency contends that the Union's exceptions constitute mere disagreement with the Arbitrator's findings concerning the application of the placement program.

First, the Agency argues that the Arbitrator correctly found that the arrangement abrogates its right to fill positions. The Agency argues that the right to select under section 7106(a)(2)(C) of the Statute includes the right to make the actual selection or appointment. The Agency argues that the plain wording of the placement program "mandates the placement of a particular individual into a vacant position." Opposition at 9. It further asserts that this placement requirement "is absolute." Id. The Agency maintains that it is obligated to reassign an employee who minimally qualifies for a vacant position in every instance. Thus, the Agency argues that the arrangement leaves it with no discretion to decide which source it will use to fill the vacancy or to choose the employee with whom it will fill the vacant position. For this reason, the Agency further argues that the placement program is contrary to FPM chapter 335, subchapter 1-4, Requirement 4, which the

Agency claims is a Government-wide regulation.(1) The Agency distinguishes this case from 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 (1990) (Social Security Administration), motion for reconsideration denied, 38 FLRA 1480 (1991), in which the Authority upheld an arbitrator's award finding that a negotiated agreement authorizing priority consideration for employees did not abrogate management's right to select under section 7106(a)(2)(C). The Agency claims that FPM chapter 335, subchapter 1-5(c), which formed the basis of the Authority's holding, permits the use of priority consideration under certain circumstances. The Agency argues, however, that that chapter should not be construed to allow agencies "to negotiate . . . placement rights to employees it has determined to remove." Opposition at 13. Moreover, the Agency argues that, because the placement policy in this case completely removes its discretion to make selections from properly ranked and certified candidates or from any other appropriate source, it is prohibited from negotiating such a policy under section 7106(a)(2)(C) of the Statute.

The Agency further states that the right to make selections under section 7106(a)(2)(C) of the Statute also entails "the right to make the actual selection or appointment for the position." Id. In support of this proposition, it cites U.S. Department of the Treasury, Internal Revenue Service, Louisville District and National Treasury Employees Union, 36 FLRA 375, 385 (1990) (Internal Revenue Service) and American Federation of Government Employees, AFL-CIO, Local 2317 and U.S. Marine Corps, Marine Corps Logistics Base, Nonappropriated Fund Instrumentality, Albany, Georgia, 29 FLRA 1587 (1987) (Marine Corps Logistics Base). The Agency argues that even though the placement program allows the Agency to determine minimum qualifications for positions and "contains safeguards to ensure an employee who is not at least minimally qualified will not be placed into the vacancy[,]" the program nonetheless "totally precludes the Agency from making selections from a certificate of eligibles or from any source other than the affected employee." Opposition at 13-14.

Second, the Agency argues that the Arbitrator correctly found that the placement program abrogated management's right to remove employees because the placement program "revers[es] the decision to remove in cases where the employee is minimally qualified for an alternative position." Id. at 14.

The Agency explains that it can remove an employee by "two alternative routes" namely, under the procedures set out in 5 U.S.C. § 7532 and those established in 5 U.S.C. §§ 7511-13. Id. With respect to the former, the Agency states that the Agency head can suspend an employee in the interest of national security and can remove the suspended employee after certain procedures are followed. With respect to the procedures under 5 U.S.C. §§ 7511-13, the Agency states that an employee can be removed "for 'cause,' i.e., for failure to meet the condition of his employment that he maintain a security clearance." Id. at 15. The Agency contests the Union's assertion that the Agency head only has discretion to remove an employee from a sensitive position and not from the Federal service. The Agency states that because it has been granted the statutory authority to remove an employee for national security reasons when necessary, "placement into a nonsensitive position must remain a discretionary decision on the part of the Agency head under 5 U.S.C. § 7532, Executive Order No. 10450, and FPM [c]hapter 732[.]" Id. at 17. More particularly as to FPM chapter 732, which the Agency claims is a Government-wide regulation, the Agency argues that the placement program also contravenes subchapter 5-3 "because that regulation, under 5 U.S.C. § 7532 and Executive Order 10450, grants the Agency head absolute discretion to remove individuals for the stated reasons." Id. at 20. The Agency states that the Agency head's decision to remove an employee "is final and absolute, and not subject to collective bargaining." Id. at 17 (footnote omitted).

The Agency contrasts the situation in this case with that found in American Federation of Government Employees, Local 1923 and U.S. Department of Health and Human Services, Health Care Financing Administration, Baltimore, Maryland, 39 FLRA 1197 (1991) (Proposal 2) (Health Care Financing Administration). The Agency argues that in that case, the Authority found negotiable a proposal that retained management's discretion to reassign an employee out of a sensitive position, assign the employee to a sensitive or nonsensitive position, or take "other [appropriate] personnel action." Opposition at 19, quoting 39 FLRA at 1204 (emphasis added by Agency). In contrast, the Agency argues that the placement program "mandate[s] retention of the individual." Id. (footnote omitted). In addition, the Agency claims that the placement program requires the Agency to determine if alternative positions are available in the Agency. If positions are available, the Agency adds that the placement program "requires in all instances, regardless of the Agency's needs or the individual's circumstances, that the Agency refrain from removing the employee unless there are no vacant positions in the Agency for which the employee qualifies." Id. at 21.

Next, the Agency argues that the Arbitrator correctly found that the placement program abrogates management's right to assign employees. In particular, the Agency cites the Arbitrator's finding that the placement program would require the Agency to place employees into positions the Agency might hold vacant in order to accommodate employees affected by a possible reduction-in-force. The Agency also states that the placement program would "displace the merit promotion process" by requiring the Agency to place an employee even if a competitive promotion process had already commenced. Id. The Agency argues that the right to assign employees includes not only the right to make initial assignments but also the right to reassign employees and the right to determine the particular qualifications and skills needed to perform the work of various positions. In this case, the Agency argues that the requirement to place a specific employee into a particular vacant position abrogates its "rights to determine both individual characteristics required for the position and whether the employee meets those qualifications." Id. at 22.

Finally, the Agency asserts that the Arbitrator correctly found that the placement program abrogates management's right to determine the number of its employees and to fill vacant positions. In particular, the Agency claims that the Arbitrator correctly found that the Agency would be required "'to carry an additional employee, preventing it from determining the number necessary to carry out its mission.'" Id. at 23, quoting Award at 14. The Agency states that the placement program would require it to fill a vacant position and that "[t]here is no language in the policy from which it could even be implied that it applies only once management has decided to fill a vacant position." Id.

In conclusion, the Agency contends that the placement program is "void and unenforceable." Id. at 24. The Agency maintains that its "unilateral rescision [sic] of the policy in October 1989[]" did not violate the parties' agreement. Id.

VI. Analysis and Conclusions

Under Customs Service, in determining whether a negotiated provision abrogates the exercise of a management right, we do not apply the test established in National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24 (1986), "to determine whether the provision excessively interferes with the exercise of a management right." Customs Service, 37 FLRA at 314. See also U.S. Department of the Air Force, MacDill Air Force Base, Florida and National Federation of Federal Employees, Local 153, 38 FLRA 74, 78 (1990). Instead, the test is whether the award "precludes an agency from exercising" management's rights. Customs Service, 37 FLRA at 314.

In addition, in reviewing exceptions to an award that applies the analysis in Customs Service, we will adopt the arbitrator's interpretation of the manner in which the negotiated provision is intended to operate unless that interpretation fails to draw its essence from the agreement. See Customs Service, 37 FLRA at 317. Where we accept the arbitrator's interpretation of a negotiated provision, we may nonetheless find the award contrary to the Statute under either of the following circumstances: 1) where the arbitrator has erroneously concluded, as a matter of law, that the negotiated provision abrogates the exercise of a management right; or 2) where the arbitrator has erroneously concluded, as a matter of law, that the negotiated provision does not abrogate the exercise of a management right. Thus, we will find an award deficient as contrary to law, despite our acceptance of the arbitrator's interpretation of the negotiated provision, if the award fails to enforce a provision that does not abrogate the exercise of a management right or if it enforces a provision that does abrogate a management right.

Applying the foregoing to this case, we find that the arbitrator incorrectly concluded, as a matter of law, that the placement program abrogated the exercise of management's rights to assign employees, fill positions, and determine the Agency's internal security practices. Thus, even accepting the Arbitrator's interpretation as to the manner in which the placement program was intended to operate, we disagree with his conclusion that the placement program abrogated the exercise of those rights. Therefore, we find that the Arbitrator's award refusing to enforce the arrangement is deficient on the basis that it is contrary to the Statute.(2) In addition, we find that the portion of the award addressing management's right to remove employees fails to draw its essence from the parties' collective bargaining agreement insofar as certain arbitral findings do not represent a plausible interpretation of the agreement. However, to the extent that we adopt other arbitral findings with respect to the exercise of the right to remove employees, we reject the Arbitrator's conclusion that the placement program abrogates the exercise of that right. Finally, we find that the Arbitrator incorrectly applied a Customs Service analysis when addressing the Agency's right to determine the number of employees.

A. The Arrangement Does Not Abrogate the Right to Assign Employees

The Arbitrator concluded that the placement program abrogates management's right to assign employees by requiring the Agency to effect reassignments once the criteria set forth in the program have been satisfied. Accepting the Arbitrator's interpretation of the placement program, we conclude that it does not abrogate the exercise of the right to assign employees.

The Authority previously has held that the right to assign employees under section 7106(a)(2)(A) includes the discretion to determine which employees will be assigned to a particular position. See, for example, American Federation of Government Employees, Local 1923 and U.S. Department of Health and Human Services, Health Care Financing Administration, Baltimore, Maryland, 44 FLRA 1405, 1490 (1992). In addition, agencies retain the right under that section to determine the qualifications and skills needed to perform the work of a position. See, for example, Federal Employees Metal Trades Council of Charleston and U.S. Department of the Navy, Charleston Naval Shipyard, Charleston, South Carolina, 44 FLRA 683, 687 (1992) (Charleston Naval Shipyard).

The placement program preserves much of management's right to determine which employees to assign to positions as well as the qualifications of those employees. As the Arbitrator found, there are certain criteria that must be satisfied before reassignments can be effected. In particular, we note that a vacant position into which an employee would be reassigned must, under the language of the provision itself, be "commensurate with the employee's personal qualifications . . . ." It is undisputed that the Agency retains the right to determine whether the employee is qualified to perform the work of the vacant position and the requirements of the position itself. Indeed, in its brief to the Arbitrator, the Union stated that management would determine "what qualifications were needed for assignment . . . ." Union's Post Hearing Brief to Arbitrator at 18.

We find unpersuasive the Agency's contention that, because the program could displace a merit promotion action that is in process, the program abrogates the right to assign employees. As we will explain more fully in connection with the right to fill positions, a limitation on management's ability to place a particular employee into a vacant position does not abrogate management's right to assign employees if it preserves management's right to determine various aspects of the employee's qualifications for the position as well as the requirements for the position itself. See generally Social Security Administration, 37 FLRA at 822. See also, U.S. Department of the Treasury, U.S. Customs Service, New York, New York and National Treasury Employees Union, 39 FLRA 278, 283-84 (1991) (arbitrator's enforcement of provision regarding reassignment of employees held not to abrogate right to assign employees); U.S. Department of Veterans Affairs Medical Center, Marion, Illinois and American Federation of Government Employees, Local 2483, 38 FLRA 270, 273 (1990) (arbitrator's enforcement of provision concerning assignment of employees to details did not abrogate the right to assign employees).

B. The Arrangement Does Not Abrogate the Right to Fill Positions and Is Not Inconsistent with FPM Requirements

The Arbitrator concluded that the placement program abrogates management's right to fill positions under section 7106(a)(2)(C) of the Statute. Specifically, the Arbitrator found that the program mandates the placement of an employee without regard to whether the Agency intends to fill a position or "stockpile[]" a position. Award at 13, 17.

We find that the Arbitrator incorrectly concluded that the placement program abrogates the Agency's right to fill positions. In reaching his result, the Arbitrator focused on the Agency's presumed inability to preserve positions that would remain unfilled, that is, to stockpile positions, if it were required to fill positions under the placement program. In determining whether management's right to fill positions was abrogated, we believe that it is essential to examine the exercise of that right in its fullest sense. In other words, it is necessary to examine how the operation of the placement program affects the Agency's ability, in general, to fill positions, and as is relevant here, its ability to preserve unfilled positions. If, instead, we were to examine whether such an arrangement permits management to retain the right to fill positions in each and every instance, an arbitrator could never issue an award ordering an agency to fill any position. The Authority has never interpreted the Statute in this manner. See, for example, Social Security Administration, 37 FLRA 816 at 821-23 (arbitrator's award enforcing contractual provision governing priority consideration and ordering that grievant be promoted held not to interfere with management's right to select under section 7106(a)(2)(C)). See generally, Michigan Air National Guard, Adjutant General of Michigan, Department of Military Affairs and Michigan State Council of Civilian Technicians, 30 FLRA 165 (1987) (arbitrator's award ordering that grievant be assigned to particular function on specified tour of duty constituted an enforcement of a negotiable procedure concerning the assignment of employees to that tour of duty). Indeed, such a result would seriously impair the ability of the parties here, and parties generally, to comply with a negotiated arrangement and would undermine an arbitrator's role in resolving disputes over the interpretation and application of such arrangements.

Examining the effect of the placement program on the exercise of management's right to fill positions in the manner described above, we conclude that the program does not abrogate management's right. Assuming, as the Arbitrator found, that the Agency is required to place employees in positions that it wishes to stockpile, the placement program operates in a narrow setting. It operates only when an employee has lost or been denied a security clearance and only when the Agency has determined that that employee is qualified to fill a position. While we recognize that the Agency would be required to place a qualified employee, such a requirement does not abrogate management's right, generally, to fill positions. Thus, the Agency retains the right to keep unfilled those positions for which there are no qualified employees under the placement program. Additionally, the Agency retains the right to stockpile other positions that require the holding of a security clearance. Given the Agency's ability to stockpile positions under these circumstances, we find that the limited occasions on which the Agency would be required to place an employee does not warrant a finding that the placement program abrogates the Agency's right to fill positions.

We find unpersuasive the Agency's argument that the placement program abrogates management's right to select because it is left with no discretion to decide which source it will use to fill a vacant position or the employee with whom the vacant position will be filled. Although section 7106(a)(2)(C) of the Statute authorizes agencies to fill positions from among properly ranked and certified candidates or from any other appropriate source, the parties here negotiated an arrangement that would apply in the limited circumstances described above when an employee's security clearance is denied or revoked. The arrangement does not limit management's ability to consider employees from various sources. The arrangement simply provides that if an employee meets the enumerated criteria, that employee will be reassigned to the position in question. As we stated above, the Agency retains the right to determine the requirements of positions and to decide whether employees possess the necessary qualifications for available positions. If an employee does not possess the necessary qualifications, there is no requirement to select that employee and management is free to make a selection from among properly ranked and certified candidates or from any other appropriate source. See U.S. Department of Defense, Delaware National Guard, Wilmington, Delaware and Association of Civilian Technicians, 39 FLRA 1225, 1233-35 (1991) (award enforcing arrangement regarding solicitation and consideration of bargaining unit employees before nonbargaining unit employees held not to abrogate right to select).

To the extent that the Agency might be required to reassign an employee who satisfied the requirements set forth in the placement program, we recognize that management's right to select in that instance would be affected. Nonetheless, we find that such a limitation does not amount to an abrogation of management's right to select. While the Agency claims that this case is distinguishable from our decision in Social Security Administration, we find that the cases are comparable. In Social Security Administration, we upheld the portion of the arbitrator's award enforcing a provision of a collective bargaining agreement authorizing priority consideration. The arbitrator found that a grievant, who was entitled to priority consideration and who was qualified for a promotion, had not been selected because of comparisons with other potential applicants who were better qualified. The arbitrator concluded that the grievant had been denied bona fide consideration for noncompetitive selection and would have been selected but for management's failure to give him such consideration. In finding that the arbitrator's interpretation and enforcement of the agreement did not abrogate management's right to select, we made the following observation, quoting the arbitrator's award:

Although this interpretation limits management from selecting from any appropriate source in those instances where a qualified employee exercises priority consideration, this interpretation preserves management's right to determine the "minimum standard . . . for adequate performance of the job" and provides "no requirement than [sic] an unqualified employee be promoted under a priority consideration."

37 FLRA at 822. We found, under the circumstances, that the arbitrator had properly enforced the parties' agreement and, further, that there was no basis on which to conclude that the award was contrary to management's right to select under the Statute or with the requirements set forth in FPM chapter 335, subchapter 1-4, Requirement 4. We reach the same result here because the placement program preserves management's right to determine whether employees possess the qualifications of a position and because the program does not require that an unqualified employee be selected.

Finally, we find that the Agency's reliance on Internal Revenue Service and Marine Corps Logistics Base are misplaced. With regard to Marine Corps Logistics Base, it is apparent that the Agency was referring to the Authority's finding that Provision 6, relating to the filling of vacancies from a certificate of highly qualified candidates, did not constitute a negotiable appropriate arrangement. The Agency's reliance on that case is inapposite. As we stated previously in this decision, the test employed for determining whether matters proposed to be bargained under section 7117 of the Statute is different from that used in determining whether the enforcement of a negotiated agreement abrogates the exercise of a management right. The analysis that was used by the Authority in Marine Corps Logistics Base, therefore, does not support the Agency's contention here.(3)

The Agency's reliance on Internal Revenue Service, which, like Marine Corps Logistics Base, predates our decision in Customs Service, is also misplaced. In Internal Revenue Service, the Authority denied an agency's exceptions to an award that obligated the agency's selecting official to consider simultaneously bargaining unit employees and individuals outside the bargaining unit to determine their relative qualifications for vacant positions. We found that the award did not directly interfere with the agency's right to select because the award did not prevent the agency from soliciting or considering applicants from outside the agency. We further found that management retained the discretion to determine the qualifications for a position and to decide which candidate was best qualified. In reaching that result, we cited prior Authority decisions that addressed the negotiability of comparable proposals. As we stated above, the application of principles that are suited to resolving negotiability disputes do not have the same applicability to resolving exceptions to awards that enforce negotiated provisions.

C. The Arrangement Does Not Abrogate the Right to Determine the Number of Employees

The Arbitrator found that the arrangement abrogated management's right to determine the number of its employees under section 7106(a)(1) of the Statute. In reaching this result, the Arbitrator noted that positions may be kept vacant for budgetary reasons and that as a result of the arrangement the Agency "would be required to carry an additional employee, preventing it from determining the number [of employees] necessary to carry out its mission." Award at 14. The Agency states that the Arbitrator correctly found that the arrangement's effect would be to require it to carry an additional employee and to fill a vacant position that it may want to leave vacant for budgetary reasons.

We conclude that the placement program does not implicate the right to determine the number of employees under section 7106(a)(1) of the Statute. That management right relates to the number of employees actually employed by an agency. The placement program, in contrast, operates within the total employee complement that has been established by the Agency. Thus, an employee who possesses a security clearance is counted among the employee complement in the same manner as an employee who loses or is denied a security clearance and is then reassigned by virtue of the placement program's operation. There is no effect on the actual number of employees. For this reason, the placement program is not determinative of, and does not implicate, the number of employees employed by the Agency.

Rather, to the extent the program affects the number of employees who are assigned to various components within the Agency, by requiring the placement of employees who have lost or been denied their security clearances, the management right that is implicated is that set forth in section 7106(b)(1) of the Statute, relating to "the numbers . . . of employees . . . assigned to any organizational subdivision[.]" Having reached this conclusion, we find that it is not appropriate to apply the test set forth in Customs Service.

In Social Security Administration, 37 FLRA at 824-25, we stated that we would not apply Customs Service to claims that an arbitrator's award improperly interferes with management's right to determine the numbers of employees or positions assigned to an organizational subdivision under section 7106(b)(1). We reached that result because that section of the Statute concerns matters over which an agency may elect to bargain and agree to as part of its collective bargaining agreement. Consequently, we stated that where an award is claimed to be contrary to section 7106(b)(1), we will examine, as we had prior to Customs Service, whether the award enforces a provision of the parties' collective bargaining agreement which constitutes the parties' agreement on the section 7106(b)(1) matter.

As we stated above, insofar as the placement program requires that the Agency place an employee rather than leave a position vacant, the program affects the numbers of employees assigned to an organizational subdivision within the meaning of section 7106(b)(1) of the Statute. Enforcement of the program merely reflects the parties' negotiation over the matter and its incorporation into the parties' collective bargaining agreement. As such, we conclude that enforcement of the placement program is not inconsistent with section 7106(b)(1) of the Statute.

D. The Arrangement Does Not Abrogate the Right to Remove Employees and is Not Inconsistent with Law and Regulation; the Award Fails to Draw its Essence from the Parties' Agreement

The Arbitrator concluded that the placement program abrogates management's right to remove employees under section 7106(a)(2)(A) of the Statute by requiring the Agency to retain employees it has decided to remove for national security reasons. In urging adoption of the Arbitrator's conclusion, the Agency explains that it has sole authority, under law and regulation, to remove employees who have lost their security clearances. The Agency argues that it can remove employees for national security reasons and for failing to meet a condition of their employment, namely, the maintenance of a security clearance. In support, the Agency cites 5 U.S.C. § 7532, 5 U.S.C. §§ 7511-13, Executive Order 10450, and FPM chapter 732, subchapter 5-3. The Agency also contests the Union's assertion that the Agency's discretion is limited to removing employees from sensitive positions but not from Federal employment. The Agency adds that its decision to remove employees is final and is not subject to collective bargaining.

We conclude that, in certain respects, the award fails to draw its essence from the parties' collective bargaining agreement. We also conclude, contrary to the Arbitrator's determination, that the negotiated arrangement does not abrogate the Agency's right to remove employees under section 7106(a)(2)(A) of the Statute. Finally, we conclude that the arrangement is not inconsistent with the cited laws and regulation.

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). For the reasons explained below, we find that the award does not represent a plausible interpretation of the agreement and that it evidences a disregard for the agreement.

Contrary to the Arbitrator's finding, we conclude that the Agency would not be precluded from removing employees for national security reasons. A determination that an employee poses a threat to national security is, in our view, distinct from a determination that an employee is not suitable to hold a position for which a security clearance is required. Clearly, under 5 U.S.C. § 7532, the Agency has the right to remove an employee when the Agency considers that removal "is necessary or advisable in the interests of national security." 5 U.S.C. § 7532(b). There is no indication that the placement program was intended to operate in a manner that would prevent the Agency from taking an action pursuant to that authority. Similarly, with respect to the provisions contained in 5 U.S.C. §§ 7511-13, if the Agency chooses to remove an employee "for such cause as will promote the efficiency of the service[,]" and the basis for the removal is a threat to national security, the placement program could not prevent the Agency from taking the removal action. 5 U.S.C. § 7513(a). Thus, the terms of the placement program do not expressly require its application when a removal decision has been made based on national security considerations, the law would not permit such an interpretation, and there is no basis for adopting the Arbitrator's finding to the contrary. Consequently, we conclude that the award fails to draw its essence from the parties' collective bargaining agreement.

See also, U.S. Department of Justice, Immigration and Naturalization Service, Del Rio Border Patrol Sector, Texas and American Federation of Government Employees, National Border Patrol Council, Local 2366, 45 FLRA 926 (1992) (Authority found award deficient as failing to draw its essence from parties' agreement because award set aside disciplinary action in the face of a finding of just cause for the imposition of the discipline).

However, this does not end our inquiry. As noted above, the Agency retains the right to determine that an employee is not suitable to hold a position for which a security clearance is required. To the extent that the placement program would operate when the Agency wishes to remove an employee for failing to meet a condition of employment, i.e., possession of a security clearance, we must assess whether the program abrogates management's right to remove employees. For the following reasons, we conclude, contrary to the Arbitrator, that the placement program would not abrogate the Agency's right to remove under section 7106(a)(2)(A) of the Statute. First, we note that it is undisputed that the Agency retains the sole discretion to remove employees from positions that require the holding of a security clearance. The Agency's right to remove employees from such positions is unimpaired and the placement program does not abrogate the Agency's right to remove in this regard.

Moreover, for the same reasons that the placement program does not abrogate management's rights to assign employees and to fill positions, the program does not abrogate management's right to remove employees for failing to maintain a condition of their employment. The program would simply require the Agency to place an employee whose security clearance has been denied or revoked into a position for which the Agency has deemed the employee qualified and for which the employee otherwise meets the requirements of the program. With respect to all other employees, the Agency's right to remove them for failing to maintain a condition of their employment is unimpaired.

Finally, we find that the Agency's reference to the Authority's decision in Health Care Financing Administration, is inapposite. As the Agency notes, that case addressed the negotiability of a proposal that required the agency to make efforts to continue to employ employees who had returned to duty following successful completion of a rehabilitation program in positions that, according to the agency's determination, were consistent with the public health, safety, and national security. In finding the proposal negotiable, we cited the union's explanation that the proposal preserved the agency's ability to take other actions, in addition to reassigning an employee occupying a sensitive position to another sensitive position or to a nonsensitive position. As is by now evident, the principles applicable to negotiability determinations are different from those that are applied in the context before us. Therefore, the fact that a proposal was deemed negotiable because it permitted an agency to take a range of actions does not establish that the placement program abrogates management's right to remove employees because it is limited to reassigning employees.

E. The Arrangement Does Not Abrogate the Right to Determine the Agency's Internal Security Practices

The Arbitrator concluded that the placement program abrogates the Agency's right to determine its internal security practices by requiring the Agency to retain an employee who has lost a security clearance. We conclude, for the reasons discussed below, that the placement program, as interpreted by the Arbitrator, does not abrogate management's right to determine its internal security practices under section 7106(a)(1) of the Statute.

An agency's right to determine its internal security practices under section 7106(a)(1) includes the right to determine policies that are part of a plan to secure or safeguard personnel and physical property. See, for example, Department of the Navy, Navy Ships Parts Control Center, Mechanicsburg, Pennsylvania and American Federation of Government Employees, Local 1156, 44 FLRA 728, 730 (1992). As interpreted by the Arbitrator, the placement program would require the Agency to retain employees under certain circumstances. However, nothing contained in the Arbitrator's interpretation of the program suggests that the Agency would be required to place an employee in a position requiring a security clearance. Further, except for the portion of the award that we have found deficient, nothing in the Arbitrator's interpretation of the program would require the Agency to retain an employee who is subject to formal discipline. Moreover, as we previously stated in connection with the right to assign employees, reassignment is commensurate with the employee's qualifications; those qualifications would include the extent of an employee's security clearance. Accordingly, we find that the program, as interpreted by the Arbitrator, does not abrogate management's right to determine its internal security practices.

Finally, we note the Agency's statement that "[t]he security clearance is the mechanism by which the Agency controls access to information." Opposition at 16. In our view, an arrangement that operates to place an employee who has lost a security clearance in a different position where he or she does not have access to sensitive information does not preclude but, rather, furthers the Agency's internal security goal of "control[ing] access to information." See, also, U.S. Department of the Army, Blue Grass Army Depot, Lexington, Kentucky and International Association of Machinists and Aerospace Workers, Local Lodge 859, 38 FLRA 1232, 1237 (1990) (arrangement that left undisturbed management's right to impose damages for willful, disobedient or certain negligent conduct did not abrogate the agency's right to determine its internal security practices).

F. The Agency's Rescission of the Placement Program Violated the Parties' Agreement

The Arbitrator concluded that, inasmuch as the placement program abrogated the exercise of management's rights, the Agency's conduct in rescinding the negotiated provision did not violate the parties' collective bargaining agreement. We disagree.

As the Arbitrator noted, and as the Agency concedes in its opposition, the Agency advised the Union in October 1989, that it would no longer be bound by the negotiated placement program on the basis that it was inconsistent with section 7106(a) of the Statute. Having found that the placement program did not abrogate the exercise of management's rights, and that the program constitutes the parties' agreement on a matter encompassed within section 7106(b)(1) of the Statute, we conclude that the Agency's rescission of the arrangement constitutes a violation of the parties' collective bargaining agreement. Accordingly, we will order the Agency to comply with the negotiated placement program. Such an order will fully remedy the contract violation, noting the absence of any evidence that employees were removed as a result of the failure to utilize the provisions of the placement program.

VII. Decision

The Arbitrator's award is set aside. The Agency is directed to comply with the negotiated placement program.




FOOTNOTES:
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1. FPM chapter 335, subchapter 1-4, Requirement 4 provides:

Selection procedures will provide for management's right to select or not select from among a group of best qualified candidates. They will also provide for management's right to select from other appropriate sources, such as reemployment priority lists, reinstatement, transfer, handicapped, or Veterans Readjustment eligibles or those within reach on an appropriate OPM certificate. In deciding which source or sources to use, agencies have an obligation to determine which is most likely to best meet the agency mission objectives, contribute fresh ideas and new viewpoints, and meet the agency's affirmative action goals.

2. As we stated in Defense Mapping Agency, and as we reaffirm here, the placement program constitutes an arrangement for employees adversely affected by the exercise of management's rights. Although not specifically identified in Defense Mapping Agency, the placement program, at the very least, is an arrangement for employees adversely affected by both the Agency's right to remove employees from positions requiring a security clearance and its right to determine its internal security practices.

3. The Authority's finding in Marine Corps Logistics Base that the proposal "totally abrogate[d]" management's right to select does not compel a finding here that the negotiated placement program abrogates that management right. 29 FLRA at 1602. In its decision, which was issued prior to Customs Service, the Authority examined whether a provision excessively interfered with management's right to select. The Authority was not presented with the issue of whether a negotiated arrangement abrogated the exercise of a management right. The fact that a particular term was used by the Authority to support a finding of excessive interference does not mandate our result with regard to the operation of the placement program. As we stated above, the test for assessing whether a provision that has been negotiated by the parties abrogates the exercise of a management right is whether the provision precludes the exercise of that right. For the reasons expressed in our decision, we conclude tha