46:1134(103)AR - - HHS, SSA, San Juan, PR and AFGE Local 226 - - 1993 FLRAdec AR - - v46 p1134
[ v46 p1134 ]
The decision of the Authority follows:
46 FLRA No. 103
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
SAN JUAN, PUERTO RICO
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
January 8, 1993
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 Joseph M. Pastore, Jr., 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 sustained a grievance over the Agency's failure to promote the grievant to a Claims Representative position after the grievant had been denied priority consideration. The Arbitrator directed the Agency to promote the grievant and to provide him with retroactive compensation unless the Agency could demonstrate, within 20 days of the Arbitrator's award, that there were legal or regulatory impediments to the award of backpay.
For the following reasons, we conclude that the award is deficient because it contravenes the Agency's right to select under section 7106(a)(2)(C) of the Statute. Accordingly, we will set aside the award.
II. Preliminary Matter
Following the filing of the Agency's exceptions, the Arbitrator submitted a document to the Authority containing a response to arguments made by the Agency regarding the Back Pay Act, 5 U.S.C. § 5596. By letter dated May 13, 1992, the Director of the Authority's Case Control Office responded to the Arbitrator, indicating that no further action would be taken on his submission. The Director stated that the Arbitrator lacked standing to file such a submission and that under 5 C.F.R. § 2421.11(a)(4)(ii), 5 U.S.C. § 7103(a)(1), and 5 C.F.R. § 2425.1(a), the Authority could not consider any letter or other submission from the Arbitrator regarding the merits of his award.
At the same time the Director responded to the Arbitrator's submission, the Agency filed a Motion to Disregard and Strike from the Record the Arbitrator's response to the exceptions. The Union subsequently filed a response to the Agency's motion in which it requested, among other things, that the Authority disregard certain arguments made in the motion and attachments thereto.
In light of the Director's action denying consideration of the Arbitrator's submission, there is no basis on which to grant the Agency's motion and we need not consider the Union's response thereto.
III. Background and Arbitrator's Award
A grievance was filed alleging that the Agency failed to provide the grievant with priority consideration, as required under the parties' collective bargaining agreement, for selection to a Claims Representative position. Priority consideration had been granted the grievant because, on two previous occasions, the grievant's name had erroneously been excluded from the Best Qualified List (BQL) for vacant positions. When the grievance could not be resolved, it was submitted to arbitration.
The parties agreed on the following issue for arbitration:
Did the Agency violate the National Agreement between SSA [Social Security Administration] and the [Union] when it failed to select the grievant for the position of Claims Representative under vacancy announcement ROII-330-88J and, if so, what shall the remedy be?
Award at 2.
The Arbitrator examined the relevant provisions of the parties' collective bargaining agreement and found that Article 26, Section 8 provides for priority consideration for selection to vacancies.(1) The Arbitrator then examined the positions of the parties.
The Union argued before the Arbitrator that the Agency failed to provide the grievant with "bona fide consideration." Id. at 5. To support its position that such consideration was not accorded the grievant, the Union noted that the Agency's selecting officials were informed of the grievant's entitlement to priority consideration on the same day that they denied his promotion to the Claims Representative position. The Union also asserted that guidance as to what constitutes bona fide consideration was provided by an arbitrator in a prior arbitration award. Under the terms of the prior award, the Union claimed that the Agency should have given the grievant a written explanation describing why he had not been selected for the position.
The Agency argued before the Arbitrator that the selection of a bargaining unit employee for promotion is purely a management right and that a candidate who receives priority consideration is not entitled to an automatic promotion. The Agency also contended that the arbitral award cited by the Union has no precedential value and is not binding in this case. Finally, the Agency argued that it followed the parties' agreement in providing the requisite notice concerning the grievant's nonselection.
In resolving the issues presented, the Arbitrator stated that the focus of his examination as to whether the Agency had provided the grievant with bona fide consideration was the process by which the Agency considered the grievant's application for promotion, rather than the "substance or merits of the consideration." Id. at 7 (emphasis omitted). The Arbitrator found that good faith on the part of the parties required more than "pro forma consideration." Id. He noted that good faith "requires a measurable response to an apparent injustice," which, in this case, was the failure to include the grievant on a promotion list. Id. The Arbitrator found that while the Agency was not required to promote an employee with priority consideration automatically, the Agency was required "to exercise such consideration in a time, place, and manner which demonstrates that the process is predicated on good faith--bona fide." Id. at 8 (emphasis omitted). The Arbitrator concluded that the Agency failed to meet its burden in this regard.
In reaching his conclusion, the Arbitrator noted that, although not binding, the prior arbitral award discussed by the parties indicated that one way of demonstrating good faith is for the Agency to provide a written explanation regarding the results of a priority reconsideration action. The Arbitrator also noted that an oral or written response or a response reflecting "a studied review of the applicant's file" are other means by which the Agency can demonstrate bona fide consideration. Id. The Arbitrator found that "none of these efforts is evidenced in the instant case." Id. The Arbitrator stated that without some evidence of a good faith effort on the Agency's part to provide the grievant with bona fide consideration, the Agency's promotion system "is unnecessarily called into question and shrouded by doubt and, if not bad faith, little or no faith." Id. In this case, the Arbitrator found that, over a 5-year period, the grievant had been "erroneously left off promotion lists and received inordinately swift, pro forma promotion denials under priority consideration conditions." Id. The Arbitrator also found that the grievant possesses skills that are comparable to the Claims Representative position and that "his current performance was and remains excellent . . . . " Id.
Based on his findings, the Arbitrator concluded that the Agency failed to accord the grievant bona fide consideration as required by Article 26, Section 8 of the parties' agreement. In considering an appropriate remedy, the Arbitrator made the following remarks:
Ordinarily, it should be noted, this Arbitrator would be inclined first to remand the promotion application to the Agency for reconsideration in a manner which clearly demonstrates good faith consideration so as to avoid any substitution of the Arbitrator's judgment, on the merits, for that of Management. Given the clear and full stipulation between the parties as to the grievant's excellent qualifications; given the length of time the grievant has had to endure a process characterized by errors and, on the surface, pro forma consideration when the agreement clearly demands more (bona fide); given the likely confusion that may arise with a reconsideration process three years after the initial consideration; and given the need to restore equity in this particular case, any conclusion short of that which makes the grievant whole would be insufficient.
Id. at 9.
Accordingly, the Arbitrator directed the Agency to promote the grievant to the position of Claims Representative, at the appropriate grade, and to provide him with "the compensation he would have received had he been promoted in February, 1989 in accordance with the provisions of those laws, rules, and regulations which control retroactive compensation awards to Federal employees." Id. Finally, the Arbitrator noted the Agency's contention that the Back Pay Act was not applicable to the grievant's claim. To address this claim, the Arbitrator stated that he would retain the right to review written arguments and evidence to substantiate the Agency's claim of legal and regulatory impediments to an award of backpay. The Arbitrator stated that "[i]f the Agency intends to submit such a claim, it must do so on a fully documented basis within twenty (20) days of the date of this Award." Id. at 10.
IV. Agency's Exceptions
The Agency asserts that the award is deficient because it abrogates management's right to select employees for promotion under section 7106(a)(2)(C) of the Statute by preventing the Agency from considering alternative sources for selection, the factors on which its choice of source will be made, and the source of the employee's qualifications. The Agency argues that in order for an arbitrator to direct an Agency to promote a grievant, the arbitrator must find a direct connection between an improper agency action and the failure of the grievant to be promoted. The Agency maintains that the Arbitrator made no such finding here. The Agency also claims that this case is similar to Office of the Secretary, U.S. Department of Transportation and American Federation of Government Employees, Local 3313, AFL-CIO, 17 FLRA 54 (1985), in which the Authority held that an arbitrator's finding that a grievant was not given priority consideration did not constitute the requisite finding that, but for that unwarranted action, the grievant would have been selected for the position. The Agency argues that the Arbitrator disregarded the need to make the requisite findings by focusing not on the merits of the consideration but, rather, on the process by which the grievant was considered.
The Agency also argues that the award contravenes Federal Personnel Manual chapter 335, subchapter 1-4, Requirement 4 (Requirement 4), for the same reasons it abrogates its right to select.(2) The Agency cites Local R4-97, National Association of Government Employees and Naval Mine Engineering Facility, Yorktown, Virginia, 5 FLRA 452 (1981), for the proposition that an arbitrator must find not only a violation of the parties' collective bargaining agreement or pertinent regulations but he must also determine that, without the occurrence of the violation, management would have selected a particular employee for the position. The Agency argues that the Authority has held that procedural irregularities, such as those that occurred in this case, do not provide a basis for "overrid[ing] management's right to select without the requisite finding[.]" Exceptions at 7. The Agency reiterates its view that the Arbitrator did not make the requisite finding that, but for the unwarranted action, the grievant would have been selected and, consequently, that the award violates the provisions of Requirement 4.
In its third exception, the Agency argues that the award interferes with section 7106(b)(1) of the Statute "which contains the management right to determine staffing patterns and budget." Id. at 9. The Agency explains that although the Arbitrator directed it to promote the grievant retroactively to February 1989, the Arbitrator did not find that the Agency's selection actions were improper and, therefore, "there is no vacancy of record to promote the grievant into[.]" Id. The Agency cites 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) (SSA, Kansas City), for the proposition that an arbitrator's award that improperly interferes with management's right to determine the numbers of employees or positions assigned to an organizational subdivision will be found deficient as contrary to section 7106(b)(1) of the Statute. The Agency argues that, inasmuch as there is no vacant position, the award interferes with its right to determine the numbers of employees or positions assigned to an organizational subdivision under section 7106(b)(1).
Finally, the Agency argues that the award is deficient because it is contrary to the Back Pay Act, 5 U.S.C. § 5596. The Agency asserts that an award of backpay is proper only where an arbitrator finds that an agency action was unjustified or unwarranted, that such action directly resulted in the reduction of an employee's pay or allowances and that, but for such action, the employee would not have suffered the withdrawal or reduction in pay. The Agency argues that the facts here are similar to those in Veterans Administration, Winston-Salem, N.C. and American Federation of Government Employees, Local 2880, 27 FLRA 44 (1987), in which an arbitrator found irregularities in the selection process and promoted the grievant retroactively with backpay but the Authority found the backpay award deficient. The Agency cites other Authority precedent to support its contention that the Arbitrator did not make the necessary "but for" finding in this case.
V. Union's Opposition
The Union asserts that the Arbitrator simply made the grievant whole after the Agency twice harmed him by not affording him priority consideration. The Union agrees with the Agency that management's right to select can be abridged only when an arbitrator finds that there is a direct connection between an improper agency action and a denial of a promotion to an employee. However, the Union asserts that the record before the Arbitrator demonstrated that the Agency's improper acts harmed the grievant and that the Arbitrator saw the need to promote him.
In response to the Agency's second exception, the Union argues that the Agency has misconstrued Requirement 4. The Union asserts that Requirement 4 only requires management to select or not select candidates from a BQL. In contrast, the Union states that this case concerns a grievant who requested consideration under a priority consideration procedure because of the Agency's unwarranted action in excluding the grievant from the BQL on two previous occasions. In response to the Agency's assertion that the Arbitrator failed to find that management would have selected the grievant and to support its view that the grievant would have been selected in any event, the Union points to the fact that the Agency selected the grievant, based on priority consideration, for a claims representative position that became available subsequent to the Agency's unwarranted action. The Union adds that had the Agency not violated the parties' agreement, the grievant would have been selected earlier.
With respect to the Agency's third exception, the Union asserts that arbitrators have inherent authority to fashion appropriate remedies. The Union argues that in cases such as the present one, there is no need to vacate a prior selection action. Instead, according to the Union, Authority precedent requires only that an arbitrator find a direct causal connection between an agency's violation of a collective bargaining agreement and its failure to select a particular employee for promotion. The Union maintains that the Arbitrator found the requisite direct causal connection and, further, that had it not been for the Agency's failure to provide the grievant with priority consideration, he would have been promoted.
Finally the Union argues that the award is not contrary to the Back Pay Act. The Union claims that the Agency's "pro forma" denials of priority consideration to the grievant constituted an unjustified or unwarranted action that affected the grievant's promotional opportunities. Opposition at 6. The Union also asserts that the Arbitrator made the requisite "but for" finding.
VI. Analysis and Conclusions
We conclude that the award is deficient because it is contrary to the Statute. Specifically, we find that the award is contrary to management's right to select under section 7106(a)(2)(C) of the Statute.
The Agency excepts to the award on the basis that it abrogates management's right to select. When an agency excepts to an award on the basis that an arbitrator's enforcement of a contractual provision interferes with the exercise of a management right, we apply the test set forth in Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA 309 (1990) (Customs Service). Under Customs Service, we examine 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. Inherent in a finding that a contractual provision constitutes an arrangement is a presumption that the provision, as a threshold matter, directly interferes with the exercise of a management right. For that reason, we stated in Customs Service that "where an arrangement has been negotiated by the parties and enforced by an arbitrator in a way that does not abrogate management's rights, we will view the arrangement as appropriate for agreement and enforcement consistent with section 7106(b)(3)." 37 FLRA at 315. The applicability of Customs Service in such cases is to determine whether, having negotiated such a provision into an agreement, an arbitrator's enforcement of that provision abrogates the exercise of a management right.
In this case, nothing contained in the award indicates that the Arbitrator viewed Article 26, Section 8 as a placement provision for an employee who had been denied priority consideration. Instead, the Arbitrator viewed the provision at issue as simply a procedure that defined the process by which the Agency would extend priority consideration. Thus, Customs Service does not apply despite the Agency's claim of abrogation, because there is no evidence that the Arbitrator enforced an arrangement. See also SSA, Kansas City (Customs Service is not applicable to contract provisions negotiated under section 7106(b)(1) of the Statute); U.S. Department of the Navy, United States Marine Corps, Headquarters and American Federation of Government Employees, Council 240, 37 FLRA 1304, 1308 (1990) (Customs Service inapplicable where it did not appear that contract provision addressed by arbitrator was intended as an arrangement).
We note that the Arbitrator's view of the contract provision in this case is in marked contrast to another arbitrator's interpretation of the same provision in SSA, Kansas City, 37 FLRA at 817-18. In that case, the arbitrator found that the parties' intent in negotiating Article 26, Section 8 "was that management must select an applicant with priority consideration . . . ." Id. at 818. Neither our d