[ v48 p6 ]
48:0006(2)CA
The decision of the Authority follows:


48 FLRA No. 2

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

DEPARTMENT OF THE ARMY, U.S. ARMY

SOLDIER SUPPORT CENTER, FORT

BENJAMIN HARRISON, OFFICE OF THE

DIRECTOR OF FINANCE AND ACCOUNTING

INDIANAPOLIS, INDIANA

(Respondent)

and

AMERICAN FEDERATION OF GOVERNMENT

EMPLOYEES, LOCAL 1411, AFL-CIO

(Charging Party/Union)

5-CA-80084

DEPARTMENT OF THE ARMY, DIRECTOR OF

FINANCE AND ACCOUNTING, ASSISTANT

SECRETARY OF THE ARMY (FINANCIAL

MANAGEMENT), INDIANAPOLIS, INDIANA

AND U.S. ARMY SOLDIER SUPPORT CENTER

FORT BENJAMIN HARRISON, INDIANA AND

U.S. ARMY FINANCE AND ACCOUNTING

CENTER, INDIANAPOLIS, INDIANA

(Respondent)

and

AMERICAN FEDERATION OF GOVERNMENT

EMPLOYEES, LOCAL 1411, AFL-CIO

(Charging Party/Union)

5-CA-80148

DEPARTMENT OF THE ARMY, DIRECTOR OF

FINANCE AND ACCOUNTING, ASSISTANT

SECRETARY OF THE ARMY (FINANCIAL

MANAGEMENT), INDIANAPOLIS, INDIANA AND

U.S. ARMY FINANCE AND ACCOUNTING

OFFICE, FORT SAM HOUSTON, TEXAS

AND U.S. ARMY COMMISSARY, FORT BENJAMIN

HARRISON, INDIANA

(Respondent)

and

AMERICAN FEDERATION OF GOVERNMENT

EMPLOYEES, LOCAL 1411, AFL-CIO

(Charging Party/Union)

5-CA-80149

DEPARTMENT OF THE ARMY, DIRECTOR OF

FINANCE AND ACCOUNTING, ASSISTANT

SECRETARY OF THE ARMY (FINANCIAL

MANAGEMENT), INDIANAPOLIS, INDIANA AND

U.S. ARMY SOLDIER SUPPORT CENTER

FORT BENJAMIN HARRISON, INDIANA AND

HAWLEY U.S. ARMY COMMUNITY HOSPITAL

FORT BENJAMIN HARRISON, INDIANA

(Respondent)

and

AMERICAN FEDERATION OF GOVERNMENT

EMPLOYEES, LOCAL 1411, AFL-CIO

(Charging Party/Union)

5-CA-80150

DEPARTMENT OF THE ARMY, DIRECTOR OF

FINANCE AND ACCOUNTING, ASSISTANT

SECRETARY OF THE ARMY (FINANCIAL

MANAGEMENT), INDIANAPOLIS, INDIANA AND

U.S. ARMY SOLDIER SUPPORT CENTER

FORT BENJAMIN HARRISON, INDIANA AND

U.S. ARMY INFORMATION SYSTEMS COMMAND-FSH

FORT BENJAMIN HARRISON, INDIANA

(Respondent)

and

AMERICAN FEDERATION OF GOVERNMENT

EMPLOYEES, LOCAL 1411, AFL-CIO

(Charging Party/Union)

5-CA-80152

(41 FLRA 926 (1991))

_____

DECISION AND ORDER ON REMAND

August 3, 1993

_____

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority pursuant to a remand from the United States Court of Appeals for the District of Columbia Circuit in United States Department of the Army, U.S. Army Soldier Support Center, Fort Benjamin Harrison, Office of the Director of Finance and Accounting, Indianapolis, Indiana v. FLRA, No. 91-1471 (D.C. Cir. Dec. 4, 1992) (Department of the Army v. FLRA). The consolidated complaints allege that Respondents U.S. Army Soldier Support Center (SSC), U.S. Army Finance and Accounting Center (USAFAC), Hawley U.S. Army Community Hospital (AH), U.S. Army Information Systems Command (ISC), and U.S. Army Commissary, Fort Benjamin Harrison, Indiana (the Commissary) violated section 7116(a)(1) and (5) of the Federal Service Labor-Management Relations Statute (the Statute) by refusing to bargain over the substance and/or the impact and implementation of the change in the scheduled pay day and in the time between the end of a pay period and the day on which employees receive their paychecks ("pay lag"). The complaint in Case No. 5-CA-80149 also alleges that Respondent Commissary failed to provide the Union with notice and an opportunity to bargain over the changes.

The complaints further allege that Respondents Finance and Accounting Offices (FAOs) of the SSC and of Fort Sam Houston, Texas violated section 7116(a)(1) of the Statute by interfering with the bargaining relationship between the other Respondents and the Union when they implemented the changes prior to the completion of the bargaining obligations between the other Respondents and the Union.

For the following reasons, we find that Respondents SSC, USAFAC, AH, ISC, and FAO, SSC did not violate the Statute as alleged in the complaints. We further find that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute by failing to provide the Union with notice and an opportunity to bargain over the change in the pay lag and that Respondent FAO, Fort Sam Houston violated section 7116(a)(1) of the Statute by implementing the change before Respondent Commissary fulfilled its bargaining obligation.

II. History of the Case

A. Facts

This case concerns changes in pay procedures effected throughout the Department of the Army. Respondents SSC, USAFAC, AH, ISC, and Commissary are activities at Fort Benjamin Harrison, Indiana. The Union is the exclusive representative of units of civilian employees in each of these activities. The Union and the Respondents are parties to a single collective bargaining agreement covering all of these units.

By memorandum dated June 3, 1987, the Army announced to its activities that it was modifying Army Regulation 37-105, Chapter 2-2, Finance and Accounting for Installations, Civilian Pay Procedures. The modification required all Army installations to adopt a 12-day pay lag for their civilian employees. Prior to this time, the length of the pay lag varied from installation to installation. The pay lag for employees at SSC, USAFAC, AH, and ISC was 6 days, whereas the pay lag for employees of the Commissary was 10 days. The modification also required that all installations be on the same 2-week pay-period schedule, thus creating a uniform pay day throughout the Army. This "particular aspect of the change affected none of the [a]ctivities here as all were on the standard calendar." General Counsel's Post-Hearing Brief at 4 n.3 (citations to transcript omitted). According to the Army's memorandum, the pay lag modification was to be implemented by January 2, 1988.

All of the activities in this case, except Respondent Commissary, receive their payroll services from Respondent FAO, SSC. Payroll for Respondent Commissary is handled by Respondent FAO, Fort Sam Houston.

In a memorandum dated July 8, 1987, the Labor Relations Officer at Fort Benjamin Harrison informed the Union that the Army regulations had been modified to require all civilian employees to be paid on the same pay day, with a 12-day pay lag. The memorandum also stated that the memorandum constituted "'notification of local implementation affecting employees paid by [Respondent FAO, SSC].'" Judge's Decision at 7. By its terms, the memorandum encompassed "all Respondent Activities except the Commissary[,] which was paid by the [FAO] at Fort Sam Houston." Id.

On July 24, 1987, the Union requested to bargain over the substance and/or the impact and implementation of the change in the pay lag. On July 31, 1987, the Union submitted the following proposals:

Union Proposal No. 1

The Employers agree that they will mail/deliver employees['] paychecks no later than 4 workdays after the end of a particular pay period. Pay periods are to mean the current 26 pay periods per year.

Union Proposal No. 2

Section 1: Employees will not have to accept direct deposit of their pay as a condition of employment but will have one of the following options.

[a.] Employees will have their paychecks hand delivered in the same manner as they currently receive Leave and Earnings statement, etc., if they desire.

[b.] Employees may designate any address for the mail distribution of their paychecks, leave and earnings statement, etc.

[c.] Employees may have their paychecks deposited and credited to their personal account in any financial institution.

Union Proposal No. 3

If the Agency alleges non-negotiability of any of the Union's proposal[s] on the basis of "Agency rules or regulations" pursuant to 5 USC, Section 7117(a)(2), no implementation of any part of the Agency proposals will take place until a negotiability determination has been made by the FLRA. The Union will move promptly to request such a determination.

Id. at 7.

The parties met on August 10, 1987, in their only bargaining session on the changes. According to "the credited testimony of [the Union's representative], during the August 10, 1987 meeting the parties were only concerned with . . . [Respondents] SSC, USAFAC, AH and ISC, which were paid by the SSC [FAO] located at Fort Benjamin Harrison" and "[n]o mention whatsoever was made of the Commissary employees . . . ." Id. at 8.

The Respondents declared that the first proposal was nonnegotiable because it "went to the substance of the [pay lag] change." Id. (1) The Respondents refused to bargain on the third proposal because "it was a 'ground rule' and therefore already covered in the existing collective bargaining agreement." Id. With respect to the second proposal, the Respondents were "willing to bargain" if the Union would "drop that part of the proposal which made hand delivery of paychecks available to the employees." Id. The Respondents contended that that portion of Proposal 2 was contrary to a 1982 supplemental agreement between the parties.(2) The Union refused to withdraw that part of the proposal and the parties agreed that they were at impasse.

On August 13, 1987, the Respondents' representative informed the Union that Respondent FAO, SSC would implement the change beginning on September 18, 1987. The Union immediately filed a request for assistance with the Federal Service Impasses Panel (Panel). On October 26, 1987, the Respondents' representative "informed the Union that [the] Respondents would begin implementing [the change] on November 13th with completion to be phased in by February 11, 1988." Id. at 6. The pay lag change was implemented by Respondent FAO, SSC at Respondents SSC, USAFAC, AH, and ISC in accordance with this schedule.

On November 16, 1987, the Panel declined to assert jurisdiction over the matter.

Commissary employees were not affected by the above-noted change because they are paid by Respondent FAO, Fort Sam Houston rather than Respondent FAO, SSC. The change in the pay lag from 10 days to 12 days was implemented at the Commissary in November and December of 1987.

The "first time the Union became aware of the change at the Commissary was when two stewards informed the Union about it." Id. at 9. On December 21, 1987, the Union's representative requested, in part, information on "the date that notice of the change [to be implemented at the Commissary] had been forwarded to the Union . . . ." Id. In response, the Respondents' representative acknowledged that Respondent Commissary had informed the Union of the change on January 11, 1988, which was after the change had been implemented.

Respondent Commissary "had no authority" to tell FAO, Fort Sam Houston "not to comply with the Army regulation regarding the new pay lag." Id. Similarly, Respondents SSC, USAFAC, AH, and ISC "had no authority" to instruct FAO, SSC "not to comply with the Army regulation . . . ." Id. at 10.

If Respondent FAO, Fort Sam Houston were required to return to the former pay lag at the Commissary, it "would be forced to hire a number of additional employees and work many overtime hours." Id. at 9. Since the implementation of the changes, Respondent FAO, SSC has had "a significant cut in the amount of computer time allotted to [that] office[,] which would prevent it from processing the employees['] checks with a pay lag time of less than 12 days." Id. at 9-10.

The parties stipulated that the pay lag change had more than a de minimis impact on unit employees. In this regard, employees testified that "the change in pay days . . . resulted in their checking accounts having insufficient funds to cover a number of outstanding checks." Id. at 10. Employees were thereby forced "to use the automatic loan service attached to their checking accounts" and to incur "unplanned interest payments for such loans." Id.

B. Administrative Law Judge's Decision

1. Respondent Commissary

The Judge found that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute by failing to provide the Union with prior notice and the opportunity to bargain over the change in the pay lag. The Judge noted that the first time that the Union's representative "heard of the change in pay-lag at the Commissary was when he was informed by the [U]nion stewards at the Commissary that the change in pay-lag had been implemented." Judge's Decision at 11. The Judge noted the Respondent's argument before him that the July 8, 1987, memorandum provided the Union with notice of the change to be implemented at the Commissary. However, the Judge rejected that argument because the "memorandum specifically stated that it was notice of 'local implementation affecting employees paid by the SSC F&AO.'" Id. at 11-12. "[A]s SSC F&AO did not pay the Commissary employees[,]" the Judge concluded that "the memorandum did not constitute notice to the Union that there was an impending change in the pay-lag at the Commissary." Id. at 12.

2. Respondent FAO, Fort Sam Houston

The Judge found that Respondent FAO, Fort Sam Houston violated section 7116(a)(1) of the Statute by "interfer[ing] with the bargaining relationship existing between the Union and the U.S. Army Commissary [when it] effect[ed] the change in pay-lag at a time when the Union had not been given notice of the impending change and the opportunity to bargain on the impact and manner of implementation of the change." Id.

3. Respondents SSC, USAFAC, AH, and ISC

The Judge noted that the General Counsel withdrew its allegation that the Respondents violated the Statute by refusing to bargain over Proposal 1. Accordingly, the Judge dismissed the complaint with respect to Proposal 1.

As to Proposal 2, the Judge found that Respondents SSC, USAFAC, AH, and ISC violated section 7116(a)(1) and (5) of the Statute "when they refused to bargain on the Union's proposal [Proposal 2] to have the pay checks hand[-]delivered." Id. at 14. The Judge rejected the Respondents' argument that the 1982 supplemental agreement barred negotiations on Proposal 2. In this regard, the Judge noted that "[a]t the time the supplemental agreement was negotiated there was a specific time-lag" and it "was on the basis of that time-lag which had checks being available on a day certain that the Union agreed to have the pay checks delivered in a certain manner . . . ." Id. at 13. The Judge found that had the Union "been aware that there was a possibility that there would be a six day delay on the receipt of their pay checks, it might well have proposed and/or signed a different agreement concerning the delivery of pay checks." Id. at n.3.

Because the Respondents "unilaterally decided to change the day upon which checks would be available to the detriment of the unit employees," the Judge concluded that the Respondents were "estopped from relying on the terms of the supplemental agreement as a defense." Id. at 13. The Judge found that to allow the Respondents "to effect changes in conditions of employment and thereafter refuse to entertain legitimate Union proposals thereon upon the basis of a prior contractual commitment which was executed at a time when the changes were not contemplated" would "destroy the equality of the bargaining relationship between the Union and the Respondent[s] envisioned by the Statute." Id. at 14.

Accordingly, the Judge found that when an agency exercises its rights under the Statute to change conditions of employment, it is obligated to "bargain on any and all legitimate union proposals which bear a substantial relationship to the change irrespective of any prior existing contractual provisions and/or agreements involving similar subject matter." Id. As Proposal 2 was otherwise negotiable, the Judge concluded that Respondents SSC, USAFAC, AH, and ISC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over the proposal.

Further, the Judge concluded that Respondents SSC, USAFAC, AH, and ISC violated section 7116(a)(1) and (5) of the Statute when they refused to bargain over Proposal 3. In reaching this conclusion, the Judge did not specifically address the Respondents' argument, made at the hearing and in the Respondents' post-hearing brief, that Proposal 3 conflicts with an Agency regulation for which there is a compelling need.

4. Respondent FAO, SSC

The Judge found that Respondent FAO, SSC violated section 7116(a)(1) of the Statute by interfering with the bargaining relationship between the Union and Respondents SSC, USAFAC, AH, and ISC when it implemented the pay lag change at Respondents SSC, USAFAC, AH, and ISC prior to the completion of bargaining on the impact and implementation of the change.

5. Remedy

With respect to the remedy, the Judge found that a status quo ante remedy was not warranted. In this regard, the Judge noted that "reinstatement of the old pay day would seriously disrupt the Respondent[s'] operations and provide no benefit to the unit employees." Id. at 15. Accordingly, the Judge recommended that Respondents SSC, USAFAC, AH, ISC, and Commissary bargain over the impact and implementation of any changes in pay procedures. Further, because "a number of employees suffered financial hardships because of the Respondent[s'] action in changing the pay lag," the Judge recommended that those employees be made whole for any monies lost due to the change in the pay lag. Id. Consequently, the Judge ordered Respondents FAO, SSC and FAO, Fort Sam Houston to make "employees whole for any monies lost due to the change in pay lag." Id.

C. Authority's Decision in 41 FLRA 926

1. Respondent Commissary

In 41 FLRA 926, the Authority agreed with the Judge that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute by failing to provide the Union with adequate notice and an opportunity to bargain over the pay lag change.

The Authority noted that the Union did not discover that the pay lag change had been implemented at the Commissary until after implementation in December, 1987. The Authority further noted that in response to an inquiry by the Union, Respondent Commissary indicated on January 11, 1988, that the date on which Respondent Commissary notified the Union of the change was January 11, 1988, which was after the change had been implemented. The Authority found that, in effect, Respondent Commissary admitted in its response to the Union that it had not given prior notice of the pay lag change to the Union.

The Authority rejected the Respondents' argument that the July 8, 1987, memorandum provided adequate notice to the Union because the Authority found that, by its terms, the memorandum did not apply to the Commissary. The Authority further rejected the Respondents' argument that presentation of the June 3, 1987, memorandum to the Union at the bargaining session on August 10, 1987, constituted adequate notice because Commissary employees were not mentioned at the bargaining session and the letter made no reference to the December 1987 implementation date at the Commissary.

Having found that Respondent Commissary failed to provide the Union with adequate notice and an opportunity to bargain over the pay lag change at the Commissary, the Authority concluded that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute.

2. Respondent FAO, Fort Sam Houston

The Authority found that because Respondent FAO, Fort Sam Houston implemented the pay lag change before Respondent Commissary fulfilled its bargaining obligation, Respondent FAO, Fort Sam Houston interfered with the bargaining relationship between the Union and Respondent Commissary in violation of section 7116(a)(1) of the Statute.

3. Respondents SSC, USAFAC, AH, ISC

For the reasons set forth in Department of the Army, U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana and Finance and Accounting Office for the Secretary of the Army, St. Louis, Missouri, 41 FLRA 885, 896 (1991), remanded, No. 91-1473 (D.C. Cir. Dec. 4, 1992), the Authority found, contrary to the Judge, that Proposal 3 was not properly before the Authority in an unfair labor practice proceeding. Accordingly, the Authority found that Respondents SSC, USAFAC, AH, and ISC did not violate section 7116(a)(1) and (5) of the Statute by refusing to bargain over Proposal 3.

With respect to Proposal 2, the Authority adopted the Judge's finding that Proposal 2 "sufficiently relates to the impact and implementation of the change in the pay lag." 41 FLRA at 942. The Authority further found that the Union did not waive its statutory right to bargain over Proposal 2 when it agreed to the provisions of the 1982 supplemental agreement. In this regard, the Authority examined the wording of the relevant provisions of the agreement and found that because the agreement "did not eliminate worksite pay delivery[,]" the Union "did not clearly and unmistakably waive its right to bargain about worksite pay delivery." Id. at 943 (citing Internal Revenue Service, Washington, D.C., 39 FLRA 1568 (1991), vacated and remanded, 963 F.2d 429 (D.C. Cir. 1992) (IRS v. FLRA); and U.S. Department of the Treasury, Customs Service, Washington, D.C. and Customs Service, Northeast Region, Boston, Massachusetts, 38 FLRA 770 (1990)). Accordingly, the Authority concluded that the parties' 1982 supplemental agreement did not prevent bargaining over Proposal 2 and that Respondents SSC, USAFAC, AH, and ISC violated section 7116(a)(1) and (5) of the Statute by refusing to bargain over Proposal 2.

4. Respondent FAO, SSC

The Authority found that because Respondent FAO, SSC implemented the pay lag change before Respondents SSC, USAFAC, AH, and ISC fulfilled their bargaining obligation, Respondent FAO, SSC interfered with the bargaining relationship between the Union and those Respondents in violation of section 7116(a)(1) of the Statute.

5. Remedy

To remedy the unfair labor practices, the Authority adopted the Judge's recommended Order requiring Respondent Commissary to notify the Union and, on request, bargain with the Union, to the extent consistent with law and regulations, on any decision to change pay procedures. Further, the Authority required Respondents SSC, USAFAC, AH, and ISC, on request, to bargain with the Union over the impact and implementation of the pay lag change. Finally, the Authority ordered Respondents FAO, Fort Sam Houston and FAO, SSC to reimburse unit employees for all monies lost or interest charged as a result of the change in the pay lag at a time when negotiations on the change had not been completed.

D. Court's Order in Department of the Army v. FLRA

By Order dated December 4, 1992, the United States Court of Appeals for the District of Columbia Circuit remanded the Authority's decision in the instant case for reconsideration in light of the court's decisions in Department of the Navy, Marine Corps Logistics Base, Albany, Georgia v. FLRA, 962 F.2d 48 (D.C. Cir. 1992) (Marine Corps v. FLRA) and IRS v. FLRA.

III. Analysis and Conclusions

A. Respondent Commissary

We agree with the Judge that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute by failing to provide the Union with prior notice and an opportunity to bargain over the pay lag change.

Section 7116(a)(5) of the Statute makes it an unfair labor practice for an agency to fail or refuse to bargain in good faith with an exclusive representative of its employees. As a result, an agency must provide the exclusive representative with notice of proposed changes in conditions of employment affecting unit employees and an opportunity to bargain over those aspects of the changes that are negotiable. U.S. Department of Veterans Affairs, Veterans Administration Medical Center, Memphis, Tennessee, 42 FLRA 712, 713 (1991) (VAMC). Even if the subject matter of the change is outside the duty to bargain, an agency must bargain about the impact and implementation of a change in conditions of employment that has more than a de minimis impact on unit employees. U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and Social Security Administration, Hartford District Office, Hartford, Connecticut, 41 FLRA 1309, 1317 (1991).

The decision to change the pay lag in this case concerns negotiable conditions of employment. See National Federation of Federal Employees and Naval Air Systems Command, Naval Plant Representative Office, St. Louis, Missouri, 38 FLRA 1191 (1990); American Federation of Government Employees, Local 1698 and U.S. Department of the Navy, Naval Aviation Supply Office, Philadelphia, Pennsylvania, 38 FLRA 1016 (1990). Therefore, under section 7116(a)(5) of the Statute, Respondent Commissary was required to provide the Union with prior notice and an opportunity to bargain over the decision to change the pay lag. See VAMC.

As found by the Judge, the first time that the Union's representative discovered that the pay lag change had been implemented at the Commissary was after implementation in December 1987. On December 21, 1987, the Union's representative submitted a request for information to Respondent Commissary. As part of the request, the Union asked when Respondent Commissary provided the Union with notice of the pay lag change. On January 11, 1988, Respondent Commissary's representative "replied that the date of the notice was January 11, 1988." Judge's Decision at 9. In effect, Respondent Commissary's representative admitted in the reply that prior notice of the change at the Commissary was not provided to the Union.

Consistent with our findings in 41 FLRA 926, we conclude that the July 8, 1987, memorandum did not provide adequate notice to the Union of the pay lag change at the Commissary. Although the first sentence of the memorandum states that the pay lag change was to apply to all Army civilian employees, the second sentence specifically states that the memorandum "was 'notification of local implementation affecting employees paid by [Respondent FAO, SSC].'" Id. at 7. As noted previously, Commissary employees are paid by FAO, Fort Sam Houston, not by FAO, SSC. Therefore, by its terms, the memorandum did not apply to the Commissary.

We also conclude that the June 3, 1987, memorandum, presented to the Union at the August 10, 1987, bargaining session, did not constitute adequate notice. The Judge found that "[n]o mention whatsoever was made of the Commissary employees" at that bargaining session. Id. Moreover, the pay lag change was implemented at the Commissary in November and December of 1987, but nothing in the June 3, 1987, memorandum indicated that the change was to be implemented at the Commissary at that time.

Accordingly, as Respondent Commissary failed to provide the Union with prior notice and an opportunity to bargain over the pay lag change at the Commissary, we find that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute.

B. Respondent FAO, Fort Sam Houston

Respondent FAO, Fort Sam Houston implemented the pay lag change before Respondent Commissary fulfilled its bargaining obligation. Accordingly, we find that Respondent FAO, Fort Sam Houston interfered with the bargaining relationship between the Union and Respondent Commissary in violation of the Statute. See Headquarters, Defense Logistics Agency, Washington, D.C., 22 FLRA 875 (1986) (entities of the same agency, but not in the same chain of command as the activity with exclusive recognition, violate section 7116(a)(1) of the Statute by taking action which conflicts with the bargaining relationship between the parties at the level of exclusive recognition). By interfering with the bargaining relationship between the Union and Respondent Commissary, Respondent FAO, Fort Sam Houston violated section 7116(a)(1) of the Statute.

C. Respondents SSC, USAFAC, AH, and ISC

1. Proposal 3

For the reasons stated in 41 FLRA 926, we find, contrary to the Judge, that Proposal 3 is not properly before the Authority in this unfair labor practice case.

2. Proposal 2

For the following reasons, we find that Respondents SSC, USAFAC, AH, and ISC did not have a duty to bargain over Proposal 2 and, therefore, did not violate section 7116(a)(1) and (5) of the Statute by refusing to bargain over that proposal.

Consistent with the court's decision in Marine Corps v. FLRA, the Authority in U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland, 47 FLRA No. 96 (1993) (Social Security Administration), established a test for determining when a matter is contained in or covered by a collective bargaining agreement so as to relieve an agency of the obligation to bargain over the matter. Specifically, the Authority stated that where an agency asserts "that it has no obligation to bargain based on the terms of a negotiated agreement[,]" the Authority will examine whether the matters over which the union seeks to bargain are contained in or covered by provisions of a negotiated agreement so as to preclude further bargaining on those matters during the term of that agreement. Social Security Administration, slip op. at 13 n.7. We find that the approach announced in Social Security Administration applies here.

In Social Security Administration, we held that to determine whether an agreement provision covers a matter in dispute, we will initially examine whether the matter is expressly contained in the agreement. We noted that we will not require an exact congruence of language, but will find the requisite similarity if a reasonable reader would conclude that the provision settles the matter in dispute. If the matter in dispute is not expressly contained in the collective bargaining agreement, we will determine whether the subject matter is inseparably bound up with or so commonly considered to be an aspect of the matter set forth in the provision such that the negotiations will be presumed to have foreclosed further bargaining over the matter, regardless of whether it is expressly articulated in the provision. If so, we will conclude that the subject matter is covered by the agreement provision.

For the reasons stated above with respect to Respondent Commissary, Respondents SSC, USAFAC, AH, and ISC had a duty to bargain over the decision to change the pay lag. Respondents SSC, USAFAC, AH, and ISC provided notice of their intent to change conditions of employment by changing the pay lag and held one bargaining session at which the Union presented Proposal 2, which concerned the impact and implementation of the change. Although the Respondents do not dispute that they were obligated to bargain over the impact and implementation of the change, they assert that they were not obligated to bargain over Proposal 2 because Proposal 2 concerns a matter that is covered by the parties' 1982 supplemental agreement. We agree. Under the approach set forth in Social Security Administration, we find that the subject matter of Proposal 2, the option of receiving paychecks by mail, direct deposit, or hand delivery, is contained in the 1982 supplemental agreement.(3) The 1982 supplemental agreement provides in relevant part that employees will receive their paychecks either by mail or through credit to an account with a financial institution. The 1982 supplemental agreement further provides that employees experiencing genuine hardship by those choices may request an exemption through the appropriate Finance and Accounting Office. Because the 1982 supplemental agreement specifically addresses delivery of paychecks through direct deposit or by mail and also includes a mechanism for exceptions to those methods of paycheck delivery in specific circumstances, we find that it is reasonable to conclude that the agreement settled the matter of the methods of paycheck delivery, including whether employees could have their paychecks hand-delivered.

We reject the Judge's finding that by unilaterally changing the pay lag, the Respondents were estopped from relying on the terms of the 1982 supplemental agreement as a defense for refusing to bargain over Proposal 2 because to find otherwise would "destroy the equality of the bargaining relationship between the Union and the Respondent[s] envisioned by the Statute." 41 FLRA at 971. We have already found that Respondents SSC, USAFAC, AH, and ISC had a duty to bargain over the change in the pay lag. This duty to bargain encompassed matters relating to the change that are not covered by or contained in an agreement between the parties. Our decision in this case finds only that Respondents SSC, USAFAC, AH, and ISC did not have a duty to bargain over a specific proposal that is covered by the parties' supplemental agreement.

Accordingly, consistent with our decision in Social Security Administration, we conclude that Respondents SSC, USAFAC, AH, and ISC had no duty to bargain with the Union over Proposal 2 and did not violate section 7116(a)(1) and (5) of the Statute by refusing to do so.

D. Respondent FAO, SSC

As Respondents SSC, USAFAC, AH, and ISC did not have a duty to bargain over Proposal 2 in this case and as Proposal 3 is not properly before us, we conclude that Respondent FAO, SSC did not interfere with the bargaining relationship between the Union and those Respondents in violation of section 7116(a)(1) of the Statute when it implemented the pay lag change at Respondents SSC, USAFAC, AH, and ISC.

E. Remedy

Having found that Respondent Commissary violated section 7116(a)(1) and (5) of the Statute by failing to provide the Union with notice and an opportunity to bargain over the pay lag change and that Respondent FAO, Fort Sam Houston violated section 7116(a)(1) by implementing the pay lag change before Respondent Commissary fulfilled its bargaining obligation, we must consider the exceptions raised by the Respondent concerning the appropriate remedy.

The Respondents argue that the Judge's recommended make-whole remedy is contrary to 5 U.S.C. § 5596 (the Back Pay Act) or is otherwise inconsistent with law. Specifically, the Respondents argue that under the Back Pay Act, employees who have established that they were affected by an agency unfair labor practice are entitled only to payment concerning "a withdrawal or reduction in the pay, allowances, or differentials of employees" and not "interest charged the employee[s] by a financial institution." Exceptions at 18. As the Judge's recommended Order required Respondents FAO, SSC and FAO, Fort Sam Houston to pay interest rather than "legitimate employee benefits in the nature of employment compensation or emoluments[,]" the Respondents argue that the remedy is contrary to the Back Pay Act. Id. at 19 (citing U.S. Customs Service, Chicago-O'Hare and National Treasury Employees Union, Chapter 172, 23 FLRA 366 (1986) (Customs Service) and Community Services Administration and National Council of CSA Locals, AFGE, AFL-CIO, 7 FLRA 206 (1981)).

Additionally, the Respondents contend that decisions of the Comptroller General prevent them from making payment pursuant to the Judge's recommended Order. The Respondents note that the Comptroller General found that agencies were without authority to pay employees amounts for earnings lost from their Thrift Savings Accounts due to administrative error (68 Comp. Gen. 220 (1989)) and reimbursement of check overdraft charges due to the agency's inadvertent failure to deposit the employee's paycheck (60 Comp. Gen. 450 (1981) and Comp. Gen. No. B-228632 (March 10, 1988) (unpublished)), because such payments were not authorized by statute or regulation. As there is "no other statutory authority" that would allow the make-whole remedy in this case, the Respondents maintain that the Judge's recommended Order is contrary to law. Exceptions at 20.

Sections 7105(g) and 7118 of the Statute vest the Authority with broad powers to remedy violations of the Statute. See generally National Treasury Employees Union v. FLRA, 910 F.2d 964 (D.C. Cir. 1990) (en banc). Specifically, section 7105(g)(3) provides that in carrying out its functions under the Statute, the Authority may "require an agency . . . to take any remedial action it considers appropriate to carry out the policies of this chapter." Further, section 7118(a)(7) specifies the remedies available in unfair labor practice cases and includes "such other action as will carry out the purposes of this chapter."

Pursuant to these provisions of the Statute, the Authority has previously ordered monetary reimbursement for losses that are not covered by the Back Pay Act when the losses resulted from the agency's unlawful action and when such reimbursement was not shown to be inconsistent with another law. See, for example, U.S. Department of Labor, Washington, D.C. and U.S. Department of Labor, Employment Standards Administration, Boston, Massachusetts, 37 FLRA 25, 41 (1990) (reimbursement was ordered for monies spent to pay for water coolers when the agency ceased providing water coolers without providing the union with notice and an opportunity to bargain about the change); Department of the Army, Dugway Proving Ground, Dugway, Utah, 23 FLRA 578 (1986) (reimbursement was ordered for increased expenses caused when employees at a remote station were illegally evicted from government housing).

In addition, the U.S. Court of Appeals for the District of Columbia Circuit has held that the Authority may grant make-whole relief to employees adversely affected by an agency's failure to bargain over the impact and implementation of a change in conditions of employment. Noting that the Authority's role in adjudicating unfair labor practice cases in the Federal sector is similar to the National Labor Relations Board's role in the private sector, the court stated that there is "a weighty preference in favor of a direct grant of individualized 'make whole' relief--especially in the form of a monetary award--for losses actually suffered by employees." American Federation of Government Employees, SSA Council 220 v. FLRA, 840 F.2d 925, 930 (D.C. Cir. 1988).

The Judge found that a status quo ante remedy was not warranted in this case because "the employees are currently receiving their [] pay checks on a day certain every week and that reinstatement of the old pay day would seriously disrupt the Respondent[s'] operations and provide no benefit to the unit employees." Judge's Decision at 15. However, because "a number of employees suffered financial hardships because of the Respondent[s'] action in changing the pay lag," the Judge recommended that those employees be made whole for any monies lost due to the change in the pay lag. Id.

As the Statute authorizes the Authority to exercise broad powers to remedy unfair labor practices and as the Respondents have cited no law precluding the Authority from granting the Judge's remedy in the circumstances of this case, we adopt the Judge's recommended remedy with respect to the actions we have found to constitute unfair labor practices.(4) We note that a direct causal connection has been established between the Respondents' unlawful action and the losses to employees. In this regard, the parties stipulated that the change in the pay lag forced employees "to use the automatic loan service attached to their checking accounts" and to incur "unplanned interest payments for such loans." Id. at 10. Therefore, in addition to providing for a cease and desist order, we will require Respondent FAO, Fort Sam Houston to reimburse employees for the increased costs that they incurred when Respondent FAO, Fort Sam Houston implemented the change in the pay lag before Respondent Commissary had fulfilled its bargaining obligation.

We reject the Respondents' argument that the remedy is contrary to the Back Pay Act or is otherwise inconsistent with law. As we noted above, the Authority has ordered monetary reimbursement for losses that are not covered by the Back Pay Act in situations where there was no showing that such reimbursement was inconsistent with another law. We also reject the Respondents' reliance on Comptroller General decisions stating that the United States Government may not reimburse employees for monetary losses when such payments were not authorized by statute or regulation. The Comptroller General decisions relied on by the Respondents do not apply to this case because, as we stated previously, reimbursing employees for their monetary losses in this case is consistent with the broad remedial powers authorized by the Statute.

Moreover, we note that 68 Comp. Gen. 220 (1989), cited by the Respondents, has been effectively overruled by the Thrift Savings Plan Technical Amendments Act of 1990, 5 U.S.C. § 8432a (Supp. III 1991). In 68 Comp. Gen. 220, the Comptroller General found that agencies were without authority to pay employees amounts for earnings lost from their Thrift Savings Accounts due to administrative error. However, the Thrift Savings Plan Technical Amendments Act of 1990 provides the statutory authority for payments by agencies of lost earnings from Thrift Savings Accounts due to agency error.

Accordingly, we adopt the Judge's recommended remedy with respect to Respondents Commissary and FAO, Fort Sam Houston, except as modified below.(5)

V. Order

A. Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Federal Service Labor-Management Relations Statute (the Statute), the U.S. Army Commissary, Fort Benjamin Harrison, Indiana, shall:

1. Cease and desist from:

        (a) Failing and refusing to provide the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of its employees, the opportunity to bargain, to the extent consistent with law and regulations, on the pay lag change.

        (b) Failing to provide timely notice to the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of its employees, of its intent to change the pay lag.

        (c) In any like or related manner, interfering with, restraining, or coercing its employees in the exercise of their rights assured by the Statute.

2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute:

        (a) Upon request, bargain with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of its employees, to the extent consistent with law and regulations, on the pay lag change.

        (b) Notify the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of its employees, of any intention to change the pay lag and, on request, bargain with the American Federation of Government Employees, Local 1411, AFL-CIO, to the extent consistent with law and regulations, on any decision to change the pay lag.

        (c) Post at its facilities at Fort Benjamin Harrison, Indiana, copies of the attached Notice marked Appendix A on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Commanding Officer and shall be posted in conspicuous places, including all bulletin boards and other places where notices to employees are customarily posted and shall be maintained for 60 consecutive days thereafter. Reasonable steps shall be taken to ensure that such notices are not altered, defaced, or covered by any other material.

        (d) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Chicago Region, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order as to what steps have been taken to comply.

B. Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Statute, the Finance and Accounting Office, Fort Sam Houston, Texas, shall:

1. Cease and desist from:

        (a) Interfering with the bargaining relationship between the American Federation of Government Employees, Local 1411, AFL-CIO, and the U.S. Army Commissary, Fort Benjamin Harrison, Indiana, by changing the pay lag at a time when the Activity and the Union had not completed bargaining on the pending change in the pay lag.

        (b) In any like or related manner, interfering with, restraining, or coercing employees of the U.S. Army Commissary, Fort Benjamin Harrison, Indiana, in the exercise of their rights assured by the Statute.

2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute:

    (a) Reimburse unit employees for all monies lost or interest charged as a result of the change in the pay lag at a time when negotiations on the change had not been completed.

        (b) Post at the facilities of the U.S. Army Commissary, Fort Benjamin Harrison, Indiana, where bargaining unit employees represented by the American Federation of Government Employees, Local 1411, AFL-CIO, are located, copies of the attached Notice marked Appendix B on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Director of the Finance and Accounting Office, Fort Sam Houston, Texas, and shall be posted in conspicuous places, including all bulletin boards and other places where notices to employees are customarily posted and shall be maintained for 60 consecutive days thereafter. Reasonable steps shall be taken to ensure that such notices are not altered, defaced, or covered by any other material.

        (c) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Chicago Region, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order as to what steps have been taken to comply.

C. The portions of the consolidated complaints alleging that the U.S. Army Soldier Support Center, the U.S. Army Finance and Accounting Center, Hawley U.S. Army Community Hospital, the U.S. Army Information Systems Command, and the Finance and Accounting Office, U.S. Army Soldier Support Center, Fort Benjamin Harrison, Indiana violated the Statute are dismissed.

Appendix A

NOTICE TO ALL EMPLOYEES

AS ORDERED BY THE FEDERAL LABOR RELATIONS AUTHORITY

AND TO EFFECTUATE THE POLICIES OF THE

FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE

WE NOTIFY OUR EMPLOYEES THAT:

WE WILL NOT fail and refuse to provide the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of our employees, the opportunity to bargain, to the extent consistent with law and regulations, on the pay lag change.

WE WILL NOT fail to provide timely notice to the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of our employees, of our intent to change the pay lag.

WE WILL NOT, in any like or related manner, interfere with, restrain, or coerce our employees in the exercise of their rights assured by the Statute.

WE WILL, upon request, bargain with the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of our employees, to the extent consistent with law and regulations, on the pay lag change.

WE WILL notify the American Federation of Government Employees, Local 1411, AFL-CIO, the exclusive representative of a unit of our employees, of any intention to change the pay lag and, on request, bargain with the American Federation of Government Employees, Local 1411, AFL-CIO, to the extent consistent with law and regulations, on any decision to change the pay lag.

U.S. Army Commissary, Fort
Benjamin Harrison, Indiana
(Activity)

Dated:_______________ By:___________________________

(Signature) (Title)

This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material.

If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Chicago Region, Federal Labor Relatio