46:1638(150)AR - - VA Medical Center, Jackson, MS and NFFE Local 589 - - 1993 FLRAdec AR - - v46 p1638

[ v46 p1638 ]
46:1638(150)AR
The decision of the Authority follows:


46 FLRA No. 150

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

U.S. DEPARTMENT OF VETERANS AFFAIRS

MEDICAL CENTER

JACKSON, MISSISSIPPI

(Agency)

and

NATIONAL FEDERATION OF FEDERAL EMPLOYEES

LOCAL 589

(Union)

0-AR-2337

_____

DECISION

February 26, 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 James E. Fulford 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 was asked to resolve grievances over the performance appraisals of staff pharmacists and pharmacy technicians who claimed that they should have been rated "exceptional" rather than "fully satisfactory" on critical elements concerning dispensing drugs and filling prescriptions. The Arbitrator found that the Agency had not developed and applied performance standards describing "exceptional" performance in those critical elements for the staff pharmacists. He also found that the Agency had not applied established standards to the pharmacy technicians. He ordered the Agency to reevaluate the grievants. For the following reasons, we find that the Arbitrator's award with respect to the staff pharmacists is contrary to law and must be set aside. We also find that the Arbitrator's award with respect to the pharmacy technicians is deficient to the extent that the award requires the Agency to train nonsupervisory pharmacists in performance evaluation procedures and the award will be modified by striking that requirement. We will deny the Agency's exceptions to the remaining portions of the award.

II. Background and Arbitrator's Award

The Arbitrator was asked to resolve grievances filed by staff pharmacists and pharmacy technicians concerning their performance appraisals. The grievants claimed that they should have been rated "exceptional" instead of "fully successful" on the critical elements relating to dispensing drugs and filling prescriptions. The Arbitrator stated that the stipulated issues before him were as follows:

Issue A. Has management applied the established critical element "Drug Dispensing" in violation of the law, regulation, or Articles of the National Agreement, in its rating of the staff pharmacists for the period of April 1, 1990 through March 31, 1991? If so, what should be the lawful remedy?

Issue B. Has management applied the established critical element "Preparing/Filling" in violation of law, regulation, or Articles of the National Agreement, in its rating of [a GS-5 pharmacy technician] for the period of April 1, 1990 through March 31, 1991? If so, what should be the lawful remedy?

Issue C. Has management applied the established critical element "Preparing/Filling" in violation of law, regulation, or Articles of the National Agreement, in its rating of [another GS-5 pharmacy technician] for the period of April 1, 1990 through March 31, 1991? If so, what should be the lawful remedy?

Award at 1-2.

With respect to Issue A, the Union contended before the Arbitrator that staff pharmacists who exceeded the "fully successful" performance standard for the "Drug Dispensing" critical element by filling more than 25 prescriptions in an hour with less than one critical error in 8000 outpatient prescriptions filled and less than two critical errors in filling inpatient prescriptions per rating period should be rated "exceptional" instead of "fully satisfactory." The Agency argued that staff pharmacists who met the "Drug Dispensing" critical element should be rated "fully satisfactory" unless management determined that a pharmacist's performance significantly exceeded the critical element. The Agency disputed the Union's claim that any pharmacist who exceeded the "Drug Dispensing" critical element requirements should be rated "exceptional." The Agency maintained that "management had determined that the exceptional level was slightly above the average fill rate for all pharmacists and that the grievants did not significantly surpass the standard for 'fully successful' or far exceed normal supervisory expectations so as to warrant a rating above 'fully successful.'" Id. at 5.

The Arbitrator held that "if management is able to say that a rating of 25 prescriptions per hour gets a 'fully successful' rating, then it can and should say that some number of prescriptions filled per hour warrant[s] a rating of 'exceptional' if all other requirements are in order." Id. at 5. The Arbitrator noted a statement in chapter 430 of the Federal Personnel Manual (FPM) that "it may be helpful to ask" whether critical elements are "all inclusive and understandable." Id. at 6, citing FPM chapter 430, subchapter 2-1.c.1. He added that "[f]rom the testimony given at the hearing I did not hear anyone state that he/she understood that a person would have to do substantially better than filling 25 prescriptions per hour to qualify for an 'exceptional' rating." Id. The Arbitrator made the following award concerning Issue A:

The [A]gency will discard the evaluations of the grievants involved in the pharmacists['] case and will reevaluate each of them based only on the information given to them at the beginning of the evaluation period.

The Arbitrator would also recommend that the [A]gency notify the pharmacists how many prescriptions they would need to average per hour to be considered for an "exceptional" rating in this critical element.

Id.

The Arbitrator held that the evaluation of the pharmacy technician in Issue B was improper because the evaluation was performed by pharmacists who were members of the same bargaining unit as the grievant and who were untrained in evaluation procedures. The Arbitrator also stated that "the rater failed to follow the established standards and determined off the top of his head what was needed to warrant 'exceptional.'" Id. at 7. The Arbitrator made the following award concerning Issue B:

The rating given to [the grievant] regarding "Preparing/Filling" will be discarded and an evaluation will be made according to the standards.

If the opinions of the [p]harmacists are to be used, the pharmacists will undergo training in the proper procedures used to evaluate.

The [A]rbitrator would recommend that questions be prepared to be answered by the pharmacists and others involved in the evaluation.

Id. at 8.

The Arbitrator made essentially the same findings and award with respect to the grievant in Issue C. He also stated in that award that "some definition of what 'whose performance far exceeds normal expectations and results in major contributions to the organization' actually means [is needed]." Id. at 8-9.

III. Positions of the Parties

A. The Agency

The Agency notes that the staff pharmacists involved in Issue A are members of the bargaining unit of professional employees represented by the Union and that the pharmacy technicians involved in Issues B and C are members of the bargaining unit of nonprofessional employees represented by the Union. The Agency contends that the Arbitrator erred in concluding that the pharmacy technicians were rated by pharmacists who are members of the same bargaining unit and denies that staff pharmacists evaluated the pharmacy technicians. The Agency asserts that the supervisors who rated the grievants had been properly trained in accordance with Agency regulations and that there is no requirement that pharmacists be trained before they can provide input to managers on the performance of pharmacy technicians.

The Agency contends that the award concerning Issue A fails to draw its essence from the parties' collective bargaining agreement because the agreement provision relied on by the Arbitrator was taken from an agreement that was not in effect at the time of the grievances in this case. The Agency states that the agreement relied on by the Arbitrator in his discussion of Issue A did not go into effect until October 1991 and asserts that the Arbitrator erred by ignoring the provisions of the agreement that had been in effect from 1983 through the rating period at issue in this grievance. The Agency states that the Arbitrator failed to cite any provision of the parties' collective bargaining agreement in his discussion of Issues B and C and that the award as to those issues cannot be said to draw its essence from the collective bargaining agreement.

The Agency also contends that the award with respect to Issue A is contrary to law, rule, and regulation because the award "imposes requirements on the Agency beyond those mandated by applicable law and regulation by 'recommending that the Agency notify the pharmacists how many prescriptions they would need to average to be considered for an "exceptional" rating in this critical element.'" Exceptions at 5. The Agency asserts that the relevant Office of Personnel Management regulation, 5 C.F.R. § 430.204(e), contains no requirement for a written performance standard for ratings above "fully successful."(1) The Agency maintains that the Arbitrator's award requires the establishment of a new "exceptional" performance standard for the critical element "Drug Dispensing" to be applied to pharmacists. The Agency contends that there is no legal or regulatory requirement for establishing a specific standard describing "exceptional" performance and maintains that all pharmacists were aware of the manner in which the Agency determined how much an employee's performance should exceed "fully satisfactory" in order to receive a rating of "exceptional."

Finally, the Agency asserts that the award is deficient with respect to all three issues because the Arbitrator did not make the required findings for setting aside the grievants' performance evaluations in all three cases before him. The Agency cites the test applied by the Authority in resolving performance appraisal cases as described in U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1122, 34 FLRA 323, 328 (1990) (SSA), and contends that the Arbitrator did not make the required finding that the Agency had failed to apply established standards or that the Agency had applied established standards in violation of law, regulations or provisions of the parties' collective bargaining agreement. The Agency notes, with respect to Issue B, that the Arbitrator did state that the "'rater failed to follow the established standards.'" Id. at 9. However, the Agency asserts that the Arbitrator failed with respect to either Issue B or Issue C to make the findings necessary to discard the grievants' ratings and to require the Agency to reappraise them.

B. The Union

The Union contends that the Authority should not recognize as a basis for finding an arbitration award deficient the argument that an award fails to draw its essence from the parties' collective bargaining agreement. The Union maintains that grievances often concern matters that do not arise under the terms of a collective bargaining agreement but, rather, concern alleged legal or regulatory violations by an agency. The Union contends that the grievances in this case do not concern the parties' agreement and, therefore, the Agency's exception that the award fails to draw its essence from the agreement is inapplicable and should be denied.

Additionally, the Union asserts that the Arbitrator's award is not contrary to law or regulation. The Union contends that the Arbitrator properly found that the grievants were not evaluated based on the performance standards that were communicated to them at the beginning of the rating period and that the Arbitrator properly ordered the Agency to reevaluate the grievants. The Union disputes the Agency's claim that the Arbitrator's award improperly requires the establishment of performance standards for determining "exceptional" performance.

IV. Analysis and Conclusions

In SSA, the Authority discussed the two-prong test governing the remedial authority of arbitrators in performance appraisal matters. We explained the test as follows:

First, an arbitrator must find that management has not applied the established standards or has applied them in violation of law, regulation, or a provision of the parties' collective bargaining agreement. If that finding is made, an arbitrator may cancel the grievant's performance appraisal or rating. Second, if the arbitrator is able to determine based on the record what the performance appraisal or rating would have been had management applied the correct standard or if the violation had not occurred, the arbitrator may order management to grant that appraisal or rating. If the arbitrator is unable to determine what the grievant's rating would have been, he must remand the case to management for reevaluation.

SSA, 34 FLRA at 328. We will apply the test set forth in SSA to the three issues in the Arbitrator's award.

A. Issue A

We conclude that the Arbitrator's award with respect to Issue A is deficient because the first prong of the test described in SSA has not been met. The Arbitrator did not find that the Agency had violated law, regulation, or a provision of the parties' collective bargaining agreement in appraising the grievants in Issue A. The Arbitrator did not find that the Agency had failed to apply either the established performance standard describing "fully successful" performance or an established standard describing "exceptional" performance for the pharmacists. Rather, the Arbitrator held that the Agency should have been able to inform the pharmacists what level of performance was required for a rating of "exceptional" in the critical element, "Drug Dispensing," when the "fully successful" performance standards in those critical elements are exceeded.

As we construe the award with respect to Issue A, the Arbitrator in essence required the Agency to establish a specific performance standard for "exceptional" in the "Drug Dispensing" critical element, although the Agency's performance plan described in its regulation established a standard only for the "fully successful" level of performance.(2) With regard to the staff pharmacists, the Arbitrator stated that the Agency should inform the pharmacists "that some number of prescriptions filled per hour warrant[s] a rating of 'exceptional' if all other requirements are in order." Award at 5. However, there is nothing in the Arbitrator's award showing that he found that the Agency rated the staff pharmacists in a manner that is contrary to law, rule or regulation or that the Agency failed to apply established performance standards in rating the staff pharmacists. We conclude that the first prong of the test in SSA has not been met and the Arbitrator had no basis on which to set aside the pharmacists' evaluations and to require that they be reappraised.

We find no basis for finding the award deficient based on the Agency's allegation that the award improperly requires the establishment of performance standards for "exceptional" ratings. The Arbitrator merely recommended that the Agency inform employees what number of prescriptions filled and what minimum number of errors constituted the requirement for a rating of "exceptional." The Arbitrator did not require the Agency to establish a performance standard for "exceptional."

Because the Arbitrator did not find either that the Agency failed to apply the established performance standards or that it violated law, regulation, or the parties' agreement when it evaluated the pharmacists, the Arbitrator had no basis on which to require that the pharmacists be reevaluated. See U.S. Department of Veterans Affairs, Olin E. Teague Medical Center, Temple, Texas and American Federation of Government Employees, Local 2109, 41 FLRA 649, 652-53 (1991). Accordingly, we will set aside the Arbitrator's award with respect to Issue A as contrary to law. In view of this decision, we do not address the other arguments made by the parties as to Issue A.

B. Issues B and C

We find that the Arbitrator's award concerning the grievances of the pharmacy technicians in Issues B and C satisfies the requirements of the first prong of the test set forth in SSA. With respect to the grievance of the pharmacy technician in Issue B, the Arbitrator stated that "the rater failed to follow the established standards and determined off the top of his head what was needed to warrant 'exceptional." Id. at 7. The Arbitrator resolved the grievance in Issue C in essentially the same manner. The language of the award with respect to those issues demonstrates that the Arbitrator found that the Agency failed to apply established performance standards in rating the pharmacy technicians and, consequently, supports a finding that the first prong of the test in SSA was met. Consequently, the Arbitrator had a legal basis on which to order the Agency to rerate the pharmacy technicians and the Agency's exception that the award as to Issues B and C is deficient on that basis must be denied.

We find no merit in the Agency's exception that the award concerning Issues B and C is deficient on the basis that it fails to draw its essence from the parties' collective bargaining agreement.(3) In order to demonstrate that an award fails to draw its essence from the agreement, the Union 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 U.S. Department of Defense, Defense Mapping Agency, Hydrographic/Topographic Center and American Federation of Government Employees, Local 3407, 44 FLRA 103, 105 (1992).

The Agency asserts that the award is deficient on this basis because the Arbitrator did not cite any portion of the collective bargaining agreement in his discussion of Issues B and C. However, the Agency has not shown that the Arbitrator's failu