46:1433(137)AR - - Treasury, Customs Service and NTEU - - 1993 FLRAdec AR - - v46 p1433
[ v46 p1433 ]
The decision of the Authority follows:
46 FLRA No. 137
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF THE TREASURY
UNITED STATES CUSTOMS SERVICE
NATIONAL TREASURY EMPLOYEES UNION
February 18, 1993
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to a supplemental award of Arbitrator Roger I. Abrams filed by the Agency pursuant to 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.
In his original award, the Arbitrator determined that a grievance alleging that the Agency violated law and regulation by implementing the Coastwise Advanced Preliminary Entry (CAPE) program was not arbitrable. On review of the Union's exceptions to that award, the Authority remanded it to the parties to obtain clarification from the Arbitrator. U.S. Department of the Treasury, Customs Service Southeast Region and National Treasury Employees Union, 43 FLRA 921 (1992) (Customs Service I). Subsequently, the Arbitrator issued a supplemental award in which he determined that the grievance was arbitrable and that the Agency violated law and regulation by its implementation of CAPE. As a remedy, the Arbitrator awarded backpay for overtime lost by unit employees as a result of the Agency's actions.
For the following reasons we conclude that the Agency's exceptions provide no basis for finding the supplemental award deficient. Accordingly, we will deny the exceptions.
II. Background and Arbitrator's Awards
A. Original Award
In 1990 the Agency implemented CAPE, which changed the procedure by which vessels arriving in the United States from foreign ports to deliver cargo to more than one U.S. port are boarded by Customs Officers for certain verifications. Formerly, such vessels were boarded by Customs Officers at each port. Under CAPE, after boarding at the initial port of arrival by Customs Officers, verification functions at subsequent ports are performed by agents of the shipping companies. One effect of CAPE "'was a significant reduction in seaport officer overtime.'" Customs Service I, 43 FLRA at 922 (quoting original award at 11).
The Union filed a grievance claiming that CAPE violated law and regulation.(1) The grievance was submitted to arbitration and, in his original award, the Arbitrator concluded that the grievance was not arbitrable. The Arbitrator held that, although alleged violations of certain laws were arbitrable, "'not all laws'" were arbitrable. Id. (quoting original award at 17). The Arbitrator concluded that, because the provisions of law and regulation relied on by the Union were intended to regulate international commerce and "'were not intended to protect or to regulate . . . the employment interests of Customs Officers[,]'" the provisions "'were not the types of statutes, rules or regulations cognizable" in arbitration. Id. at 923 (quoting original award at 20).
On review of the Union's exceptions to the original award, we were unable to determine whether the award was based on the Arbitrator's interpretation of Article 31, Section 3 of the parties' agreement, or on his interpretation of section 7103(a)(9) of the Statute.(2) We noted that the statutory definition of "grievance" encompasses violations of any law affecting conditions of employment and that such laws are not limited to "'statutes that prescribe employee rights and benefits." Customs Service I, 43 FLRA at 924 (citing National Treasury Employees Union and U.S. Department of the Treasury, Bureau of Public Debt, 42 FLRA 1333, 1338 (1991) (Public Debt), petition for review filed sub nom. U.S. Department of the Treasury, Bureau of Public Debt v. FLRA, No. 91-1633 (D.C. Cir. Dec. 20, 1991)). We also noted that where, as here, the exercise of a management right under section 7106 of the Statute is challenged,(3) "the 'law' referenced in section 7103(a)(9) includes the 'applicable laws' referenced in section 7106(a)(2)." Customs Service I, 43 FLRA at 924 (citing Public Debt, 42 FLRA at 1338).(4) We stated that the term "applicable laws" includes "'provisions of the United States Code or other lawfully enacted statutes.'" Customs Service I, 43 FLRA at 924 (citing National Treasury Employees Union and U.S. Department of the Treasury, Internal Revenue Service, 42 FLRA 377, 389 (1991) (Treasury), petition for review filed sub nom. Department of the Treasury, Internal Revenue Service v. FLRA, No. 91-1573 (D.C. Cir. Nov. 25, 1991)).
Citing Public Debt and Treasury, we concluded that insofar as the Arbitrator's original award was "based on an interpretation of the scope of a grievance procedure permitted under the Statute, the award [was] deficient as inconsistent with the Statute[.]" Customs Service I, 43 FLRA at 925. We noted, however, that parties may agree to exclude any matter from the scope of a negotiated grievance procedure. As we were unable to determine whether the Arbitrator's original award was based on his interpretation of the parties' agreement or the Statute, we remanded the award to the parties to obtain clarification from the Arbitrator. We stated that, on remand, any dispute as to whether relevant statutes and regulations were "applicable laws" should be resolved consistent with our decision in Treasury. Id. at 925 n.5.
B. Supplemental Award
Following the remand, the Arbitrator held an additional hearing, over the objection of the Agency, and issued the supplemental award which is the subject of this decision.
With respect to arbitrability, the Arbitrator determined that Article 31, Section 3 of the parties' agreement was taken directly from section 7103(a)(9) of the Statute. The Arbitrator credited testimony from Agency and Union witnesses that the parties intended to enable employees to "grieve under the [c]ontract anything that could be grieved under the [S]tatute." Supplemental Award at 5. The Arbitrator concluded that the parties' agreement was to be "read in the same way [section 7103(a)(9)(C)(ii)] would be read." Id. at 9.
The Arbitrator found that, under Treasury, "lawfully enacted statutes, rules and regulations are 'applicable laws' [and] [a]lleged violations of their provisions are grievable under the statutory grievance procedure if they affect conditions of employment." Id. at 8 (footnote omitted). The Arbitrator concluded that, in accordance with Treasury, 19 U.S.C. § 1448 was an applicable law. The Arbitrator also concluded that, as the Agency's actions reduced overtime earnings for Customs Inspectors, and potentially affected the staffing and grade levels of those positions, the grievance was arbitrable because "[i]t [was] a complaint by the Union about a violation of law, rule or regulation 'affecting conditions of employment.'" Id. at 10.
Next, the Arbitrator referred to and incorporated in his supplemental award a footnote in his original award in which he had stated that, if he reached the merits of the case, he would find that CAPE violated 19 U.S.C. § 1448 because "the law, as written, plainly contemplates either preliminary or formal entry[;] [n]o third option is contemplated." Id. at 11 (quoting original award at 16, n.2). The Arbitrator concluded that, as verification pursuant to either formal or preliminary entry must be made by a Customs Officer and as, under CAPE, verification was made in some circumstances by others, "the Agency did violate applicable law, rules and regulations by the implementation of CAPE." Id. at 12.
Finally, with respect to the remedy for the Agency's violation of law and regulation, the Arbitrator stated the following:
The Agency argues that the decision whether to assign overtime is a matter of management's discretion. That is absolutely true. Here, however, we have evidence that vessels used CAPE to make preliminary entry at times when--if the Agency had followed the law--Customs Inspectors would have been assigned to do the boarding on overtime. Under the Back Pay Act, backpay is warranted in such situations. Here the Inspectors would have earned overtime pay "but for" the Agency's refusal to comply with "applicable laws."
Id. at 12. As his award, the Arbitrator sustained the grievance and directed the Agency to "make the affected employees whole for loss of overtime." Id.
III. Positions of the Parties
The Agency argues that the Arbitrator's award is contrary to law.(5) In this connection, the Agency contends that the grievance is not arbitrable because 19 U.S.C. § 1448 relates only to international commerce and does not concern a condition of employment of unit employees. The Agency claims that, as such, 19 U.S.C. § 1448 does not constitute an applicable law under section 7106 of the Statute. The Agency also claims that the Arbitrator erred in finding that CAPE violated 19 U.S.C. § 1448 because, according to the Agency, that statute addresses only the unlading of merchandise from vessels entering the U.S. directly from a foreign port, and does not address coastwise vessels, which, although originating at a foreign port, previously have made entry at a U.S. port.
The Agency also argues that the Arbitrator's award of backpay is contrary to the Back Pay Act. The Agency contends that, as 19 U.S.C. § 1448 does not relate to personnel issues, a violation of it does not constitute an unjustified or unwarranted personnel action. The Agency also contends that employees may not be paid for overtime unless "it was assigned and performed." Exceptions at 13. In this connection, the Agency asserts that the award of backpay fails to draw its essence from the parties' agreement because, according to the Agency, it has the sole right under Article 22, Section 1 of the parties' agreement to determine the circumstances in which overtime is assigned.(6)
Finally, the Agency contends that the Arbitrator exceeded his authority and that the award conflicts with its right, under the parties' agreement and section 7106 of the Statute, to determine its mission. With respect to the former point, the Agency states that the award was remanded only for the Arbitrator to clarify the basis of his original award and that, by allowing the introduction of new evidence, the Arbitrator improperly reopened and modified the original award. With respect to the latter point, the Agency maintains that CAPE was implemented to improve its overall efficiency.
The Union argues that the Arbitrator's finding that CAPE violates 19 U.S.C. § 1448 is not contrary to law. The Union claims that 19 U.S.C. § 1448 requires Customs employees to board vessels seeking to unlade foreign cargo or passengers, whether or not the vessel is entering directly from a foreign port. According to the Union, this procedure was in effect for over 200 hundred years prior to CAPE. The Union also argues that 19 U.S.C. § 1448 constitutes an applicable law and that the Agency's argument that the statute does not concern conditions of employment constitutes mere disagreement with the Arbitrator's evaluation of the evidence before him and his interpretation of the parties' agreement.
The Union also argues that the award of back pay is not contrary to the Back Pay Act and draws its essence from the parties' agreement. The Union maintains that the Arbitrator properly determined "that inspectors were subjected to unwarranted and unjustified personnel . . . decisions" as a result of CAPE. Opposition at 9.
Finally, the Union argues that the Arbitrator did not exceed his authority. The Union asserts that the Arbitrator did not reopen or modify the original award and that he addressed only the issues he was authorized to address.
IV. Analysis and Conclusions
A. The Award Is Not Contrary to Law
1. 19 U.S.C. § 1448
We reject the Agency's argument that alleged violations of 19 U.S.C. § 1448 are not grievable or arbitrable because that provision does not concern conditions of employment and does not constitute an applicable law under section 7106 of the Statute. As we noted in Customs Service I, and reaffirm here, laws included within the permissible scope of a grievance procedure are not limited to "'statutes that prescribe employee rights and benefits.'" 43 FLRA at 924 (citing Public Debt, 42 FLRA at 1338). In this connection, 19 U.S.C. § 1448 obviously has "the force and effect of law." Treasury, 42 FLRA at 390-91. Moreover, the statute expressly refers and relates to the duties performed by Agency employees and, consistent with the Arbitrator's findings, application of the provision clearly and directly relates to the pay of certain Agency employees and has potential effects on the staffing and grade levels of the positions encumbered by those employees. In these circumstances, we conclude, in agreement with the Arbitrator, that 19 U.S.C. § 1448 constitutes a law "affecting conditions of employment[,]" within the meaning of section 7103(a)(9) of the Statute, and an "applicable law," within the meaning of section 7106(a)(2). As such, alleged violations of that statute are within the permissible scope of a grievance procedure under the Statute and the Arbitrator's award so holding is not contrary to the Statute. Customs Service I, 43 FLRA at 924.
We also reject the Agency's argument that the Arbitrator erred in concluding that the implementation of CAPE violated 19 U.S.C. § 1448. As set forth at note 1, that statute applies, by its terms, to vessels "arriving from a foreign port or place." It is undisputed that the vessels to which CAPE applies originate at foreign ports. Although the Agency asserts, in effect, that 19 U.S.C. § 1448 applies only to vessels arriving directly from a foreign port and does not apply to "coastwise" vessels, nothing in the statute contains this limitation. Moreover, the Agency provides no authority for its interpretation of the provision and our research fails to disclose any.(7) In addition, the Union's assertion that, prior to implementation of CAPE, the Agency consistently interpreted section 1448 as applying to coastwise vessels is undisputed. Put simply, apart from the Agency's mere assertion, we have no basis on which to conclude that 19 U.S.C. § 1448 does not apply to the coastwise vessels who are subject to CAPE.
19 U.S.C. § 1448 expressly conditions the unlading of merchandise, passengers, and cargo from covered vessels on "entry" of the vessels by Customs Officers. The sole exception to such entry expressed in the statute provides for "preliminary entry" of vessels by "the master . . . delivering the manifest to the customs officer who boards" the vessel. The Arbitrator concluded, as relevant here, that "the law, as written, plainly contemplates either preliminary or formal entry. No third option is contemplated." Supplemental Award at 11. Based on the plain wording of the statute, and in the absence of any authority to the contrary, we agree. As both entry and preliminary entry are made by, or to, a customs officer who boards the vessel, we also agree with the Arbitrator that by eliminating such boarding, CAPE is inconsistent with 19 U.S.C. § 1448.(8)
In sum, the Agency has not demonstrated that the Arbitrator's conclusions that 19 U.S.C. § 1448 applies in this case and that the Agency's implementation of CAPE violated that provision are deficient. Accordingly, we will deny its exceptions contending that the award is inconsistent with that statute.
2. The Back Pay Act
The Back Pay Act authorizes arbitrators to make employees whole for pay, allowances, or differentials lost as a result of an unjustified or unwarranted personnel action. For example, National Federation of Federal Employees Local 1263 and U.S. Department of Defense, Defense Language Institute, Monterey, California, 43 FLRA 791, 805 (1991). To award backpay, an arbitrator must find that: (1) the aggrieved employees were affected by an unjustified or unwarranted personnel action; (2) the personnel action directly resulted in the withdrawal or reduction of the employees' pay, allowances or differentials; and (3) but for the personnel action, the employees would not have suffered the withdrawal or reduction. Id. Under the Back Pay Act, an unjustified or unwarranted personnel action includes a violation of applicable law. Id. Further, an arbitrator may properly award backpay to compensate for lost overtime. U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 44 FLRA 773, 798 (1992).
Here, as noted above, the Arbitrator found that the Agency's implementation of CAPE violated 19 U.S.C. § 1448, and that the violation directly resulted in a loss of overtime pay for Customs Inspectors. The Arbitrator found that, "but for" the Agency's failure to comply with 19 U.S.C. § 1488, the Inspectors would have been assigned to do the boarding on overtime and the Arbitrator directed the Agency to make the affected employees whole for lost overtime pay. Supplemental Award at 12. The Agency has not demonstrated, and we find no basis on which to conclude, that these arbitral findings are improper. Consequently, we conclude that the award of backpay is not deficient under the Back Pay Act. See, for example, id. at 798.
B. The Award Draws Its Essence from the Parties' Agreement
To demonstrate that an award fails to draw its essence from the parties' 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. For example, International Federation of Professional and Technical Engineers Local 11 and U.S. Department of the Navy, Naval Electonics Systems Engineering Center, Vallejo, California, 46 FLRA 893, 901 (1992) (IFPTE Local 11).
As discussed previously, the Arbitrator determined that the grievance was arbitrable under the parties' agreement because, as relevant here, the agreement was intended to encompass all matters that properly could be grieved under the Statute. We find nothing in the Arbitrator's interpretation of the agreement that is irrational, unfounded, implausible, or in manifest disregard of the agreement. Accordingly, the Agency has not demonstrated that the award fails to draw its essence from the agreement. We conclude, instead, that the Agency's arguments constitute mere disagreement with the Arbitrator's interpretation and application of the agreement and, as such, provide no basis for finding the award deficient. For example, id.
The Agency also has not demonstrated that the award of backpay fails to draw its essence from the parties' agreement. In this connection, the Agency argues that backpay is not permitted because, under the agreement, management has the sole right to assign overtime and, in this case, "the [A]gency has not assigned overtime . . . and the employees have not performed overtime[.]" Exceptions at 14. The Arbitrator expressly acknowledged the Agency's right to assign overtime in this case. However, the Arbitrator also expressly found that, but for the Agency's implementation of CAPE, which violated 19 U.S.C. § 1448, the Agency would have assigned, and unit employees would have worked, overtime. We find nothing in the Arbitrator's award, or in his interpretation and application of relevant contractual provisions, which is irrational, implausible, or in manifest disregard of the agreement. Accordingly, the Agency has not demonstrated that, in this respect, the award fails to draw its essence from the agreement.
C. The Arbitrator Did Not Exceed His Authority
We reject the Agency's contention that the Arbitrator exceeded his authority by improperly reopening and modifying his original award. An arbitrator exceeds his authority when, among other things, he issues an affirmative order that goes beyond the scope of the matter submitted to arbitration. U.S. Small Business Administration Atlanta, Georgia and American Federation of Government Employees, Local 3906, 37 FLRA 137, 142 (1990).
After we reviewed the exceptions filed by the Union, the Authority remanded the original award to the parties for "further processing consistent with our decision." See Customs Service I, 43 FLRA at 921. As a result of our remand, the Arbitrator was required to clarify the basis for his original award and, as necessary, to determine whether various statutory and regulatory provisions were violated and, if they were, to further determine an appropriate remedy for the violations. We conclude that the Arbitrator properly addressed, and confined his supplemental award to, those issues. Accordingly, the Agency has not demonstrated that the Arbitrator exceeded his authority and we will deny this exception.
D. The Award Does Not Interfere with the Agency's Right to Determine Its Mission
We reject as unsupported the Agency's contention that the award abrogates the Agency's right to determine its mission. The Agency has not demonstrated that the award interferes with its right to determine its mission and no basis on which to find any such interference is apparent to us. We will, therefore, deny this exception.
The Agency's exceptions are denied.
(If blank, the decision does not have footnotes.)
1. Among other things, the grievance alleged that CAPE violated 19 U.S.C. § 1448, which provides, in relevant part:
(a) Except as provided in section 1441 of this title (relating to vessels not required to enter), no merchandise, passengers, or baggage shall be unladen from any vessel or vehicle arriving from a foreign port or place until entry of such vessel or report of the arrival of such vehicle has been made and a permit for the unlading of the same issued by the appropriate customs officer: Provided, That the master may make a preliminary entry of a vessel by making oath or affirmation to the truth of the statements contained in the vessel's manifest and delivering the manifest to the customs officer who boards such vessel . . . .
2. Both Article 31, Section 3 of the parties' agreement and section 7103(a)(9)(C)(ii) of the Statute define "grievance" in pertinent part, as:
any claimed violation, misinterpretation, or misapplication of any law, rule or regulation affecting conditions of employment.
Supplemental Award at 2-3.
3. The parties agree that the grievance challenges the exercise of the Agency's right to assign work. See Customs Service I, 43 FLRA at 924 n.4.
4. Section 7106(a)(2) of the Statute provides, as relevant here, that nothing in the Statute shall affect the authority of an agency official, "in accordance with applicable laws[,]" to exercise certain management rights, including the right to assign work.
5. The Agency also disputes the Arbitrator's conclusion that the implementation of CAPE violated various Agency regulations implementing 19 U.S.C. § 1448. However, as we conclude that the Arbitrator's award that CAPE violated 19 U.S.C. § 1448 is not deficient, we find it unnecessary to address whether CAPE also violated Agency regulations.
6. Article 22, Section 1B of the parties'