48:0293(25)AR - - HHS, SSA, San Francisco Region and AFGE, Council 147 - - 1993 FLRAdec AR - - v48 p293



[ v48 p293 ]
48:0293(25)AR
The decision of the Authority follows:


48 FLRA No. 25

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SOCIAL SECURITY ADMINISTRATION

SAN FRANCISCO REGION

(Agency)

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

COUNCIL 147

(Union)

0-AR-2368

_____

DECISION

August 19, 1993

_____

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on exceptions to an award of Arbitrator Sanford Jay Rosen 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 unit employees to the proper grade level in accordance with a memorandum of understanding. The Arbitrator ordered retroactive promotions and backpay. The Arbitrator also ordered the Agency to provide certain information the Union requested concerning career ladder promotions.

For the following reasons, we conclude that the Agency has failed to establish that the award is deficient. Accordingly, we will deny the exceptions.

II. Background and Arbitrator's Award

The parties signed a memorandum of understanding (MOU) on October 8, 1986, concerning revised field office performance plans and career ladder plans. The dispute before the Arbitrator concerned the interpretation and application of section 4.C.2. of the MOU regarding the promotion of employees selected for field office career ladder positions after October 8, 1986. That section states that "[e]mployees selected for career ladder positions will be promoted to the next higher grade level at the beginning of the first pay period after selection, provided the time in grade and any other legal promotion requirements are met." Award at 8. The parties stipulated that the circumstances surrounding the selection of Christine Aguirre for the position of claims representative were illustrative of the dispute between the parties as to the meaning of the MOU.

On October 18, 1988, the Agency issued a vacancy announcement for a claims representative position, GS-105-5/7/9. Christine Aguirre, a GS-7 data review technician, was one of nineteen people who applied for the position. The applications were processed pursuant to a merged best qualified list procedure established by the parties in a separate memorandum of understanding dated September 30, 1986 (September MOU). The candidates were evaluated and ranked for the grade levels for which they were found qualified by applying the factors and weights applicable to each grade level. The top eight scores plus ties, regardless of grade level, were selected to form the merged best qualified list. The Arbitrator stated that Aguirre was evaluated separately under the factors and weights for grades 5, 7, and 9 and was qualified for all three grade levels. Although her scores at the grade 7 and 9 level were too low to make the merged best qualified list, Aguirre's score at the grade 5 level was tied for eighth highest. Consequently, her name was placed on the merged best qualified list that was referred to the Agency's selecting official. On December 7, 1988, Aguirre was selected for the claims representative position at the GS-5 level. On January 1, 1989, Aguirre was promoted to the GS-7 level.

On January 5, 1989, Aguirre filed a grievance claiming that she had not been promoted to the next higher grade as required by the October 8, 1986, MOU. In Aguirre's view, she should have been selected for the claims representative position at the GS-7 level, with subsequent promotion to the GS-9 level. Consequently, she requested a retroactive promotion to GS-9. Thereafter, the Union filed a regional grievance in which it alleged that the Agency failed to properly promote employees pursuant to the MOU. The Union requested that all harmed employees be made whole with full backpay. The grievances were unresolved and were submitted to arbitration. The parties agreed to the following statement of the issue for arbitration:

Has the Agency in the San Francisco region failed to promote unit employees to the proper grade-level in accordance with the October 8, 1986 Memorandum of Understanding?

If so, what shall the remedy be?

Id. at 1.

The Agency argued before the Arbitrator that the MOU gave an employee the right to a guaranteed promotion after selection but did not require that the promotion be made from the employee's prior grade level. The Agency further asserted that certifying candidates for a grade level by comparing the candidates for the position against each other is required as a merit competition principle and is consistent with the Federal Personnel Manual (FPM).

The Union argued before the Arbitrator that the Agency violated the MOU by failing to properly promote candidates selected for career ladder positions. According to the Union, the MOU mandates promotion of an employee to the grade level that is above the grade level held at the time the employee applied for the position, provided the employee is qualified for the higher grade level. The Union also contended that the bargaining history of the MOU supported the Union's interpretation. The Union further argued that the merged best qualified list process should not be used to set a candidate's grade level because its only purpose is to rank qualified candidates. The Union requested that the Arbitrator order the Agency to promote the employees it had failed to promote properly and to award them backpay with interest. Additionally, the Union requested that the Agency provide it with information concerning employees selected for career ladder promotions on or after October 8, 1986.

In resolving the issue presented, the Arbitrator stated that the language of the MOU as to when promotions will be effected was ambiguous. Given the ambiguity, the Arbitrator stated that it was accepted practice to use recognized standards of contract interpretation to determine the intent of the parties, citing in support F. Elkouri and E. Elkouri, How Arbitration Works (4th ed. 1985). In so doing, the Arbitrator reviewed the history of the parties' negotiations over the MOU, as well as a November 7, 1986, memorandum to the Agency's regional commissioners in which the Agency explained the operation of section 4.C.2 of the MOU. In that memorandum, the Agency stated that "[i]n accordance with Section 4.C.2 of the MOU, management should immediately promote any current employee who has already been initially selected for a career ladder position, but not yet promoted (provided, of course, said employee meets all the other legal requirements for promotion)." Award at 13. To illustrate the point, the Agency stated that a GS-7 service representative who was selected to be a claims representative, but who had not yet completed training and was not functioning at the GS-9 level, should be promoted to the GS-9 level when all other requirements for promotion have been met. To the Arbitrator, this example "clearly indicate[d] that the employee's promotion to the next higher grade is measured by reference to the grade level of the employee's prior position . . . ." Id. at 17.

The Arbitrator also found that the Union was attempting through negotiations to obtain a consistent national policy with regard to the initial promotion to career ladder positions. In this regard, the Arbitrator observed that accepting the Agency's interpretation of the MOU would mean that a selected employee's initial promotion would vary from region to region depending on the number of applicants for a position. The Arbitrator further noted that the Agency's construction of the MOU would result in an "anomaly[,]" namely, that "the grade level by which a candidate qualified for a Merged [Best Qualified] List would only be used to set an employee's initial grade level if there were more than eight candidates applying for a position." Id. at 17-18. The Arbitrator did not accept the Agency's interpretation of the MOU because an "ambiguous contract should not be interpreted in a manner that would lead to 'harsh, absurd, or nonsensical results,' when an equally plausible interpretation is available." Id. at 18, quoting How Arbitration Works at 354. In addition, the Arbitrator noted that the Agency had cited no regulation suggesting that the process to determine the best qualified list was intended to be used to set a candidate's grade level.

Based on his findings, the Arbitrator concluded that the Agency's failure to promote employees to the next higher grade level, as required by the MOU, was an unjustified and unwarranted personnel action for which retroactive promotions and the award of backpay was appropriate. Therefore, the Arbitrator ordered the Agency "to identify, promote and make whole with back pay and interest all employees selected for field office career ladder positions after October 8, 1986 in which [the Agency] failed to promote them to the next higher grade level as measured by the grade level of the candidate's prior position[.]" Id. In addition, the Arbitrator ordered the Agency to provide the information requested by the Union.

III. First Exception

A. Positions of the Parties

1. The Agency

The Agency asserts that the award is contrary to FPM chapter 335, subchapter 1-2, and FPM Supplement 335-1, appendix B, section B-4.d., which are both claimed to be Government-wide regulations. According to the Agency, the intent of FPM chapter 335, subchapter 1-2.g., is that best qualified candidates must be measured against other candidates and that they must rank at the top when compared with the other eligible candidates for a position. As a result, the Agency maintains that competition may vary among locations depending upon the number of applicants and that a higher cut-off score is needed to make the best qualified list when there is a large number of applicants. The Agency contends that the Arbitrator failed to understand the application of this provision of the FPM by essentially finding that there should be no variation from region to region depending on the number of applicants.

The Agency also argues that the award is contrary to the principle of merit competition contained in FPM Supplement 335-1, appendix B, section B-4.d., that employees compete at a particular grade level and be ranked at that grade level. The Agency asserts that the award requires that the Agency select employees for a grade level they did not attain on a best qualified list and does not acknowledge that there are different selection factors for each grade level.

2. The Union

The Union argues that the award does not conflict with FPM chapter 335, subchapter 1-2.g., which provides the definition of best qualified candidates. The Union insists that there is no dispute over what constitutes a proper best qualified list. Instead, the Union maintains that the parties agreed to a procedure involving the use of a merged best qualified list and, further, that Aguirre was properly selected from such a list. The Union asserts that the Arbitrator did not change the best qualified list or management's selection from that list. The Union further contends that the Agency's reliance on FPM Supplement 335-1, appendix B, section B-4.d. is misplaced inasmuch as the award did not modify the best qualified list procedure or the factors and weights that were applied to develop the list.

B. Analysis and Conclusions

We reject the Agency's contention that the award is contrary to the cited regulations.

FPM chapter 335, subchapter 1-2.g. states that "[b]est qualified candidates are measured against other candidates. They are qualified candidates who rank at the top when compared with other eligible candidates for a position. A reasonable number of the best qualified candidates are referred for selection." The cited provision does not address the issue in this case as to whether the promotion of a selected candidate from a merged best qualified list should be from the grade level held by the employee prior to that employee's selection or from the employee's ranking score on the merged list. Thus, subchapter 1-2.g. does not address the requirements for promotion to a higher grade or require that a candidate's ranking score on a merged best qualified list be used to determine the selected candidate's grade level. Accordingly, we find that FPM chapter 335, subchapter 1-2.g. does not preclude the Agency from promoting a selected candidate from the grade level previously held by the employee.

Similarly, the award is not inconsistent with FPM Supplement 335-1, appendix B, section B-4.d. That provision states, in pertinent part, that "[t]o the maximum extent possible, the same evaluation methods should be applied to all persons being considered for appointment to higher grade positions." The provision also does not address the issue in this case regarding the appropriate grade level at which a candidate will be selected from a merged best qualified list. Moreover, nothing in the award alters the evaluation methods used to develop merged best qualified lists or modifies the ranking of employees on such lists.

IV. Second and Third Exceptions

A. Positions of the Parties

1. The Agency

The Agency argues that the award abrogates management's rights to assign and select employees under sections 7106(a)(2)(A) and 7106(a)(2)(C) of the Statute.(1) More specifically, the Agency asserts that the award requires management to qualify Aguirre for a higher grade level even though she did not meet the qualifications set by management for that grade level. The Agency contends that by deciding that Aguirre should be placed at the next higher grade, instead of at the grade at which she ranked among the best qualified candidates, the Arbitrator substituted his opinion for that of management in determining the qualifications needed for the higher grade position. The Agency claims that an inherent part of the selection process is management's right to determine the grade level of the best qualified candidates and that the Arbitrator interfered with that management right.

The Agency also contends that the award abrogates management's rights to assign and select employees by "completely precluding the setting of qualifications needed for different levels of performance." Exceptions at 12. The Agency argues that the Arbitrator determined the qualifications required for the GS-7 grade level by placing Aguirre at that level even though management determined that she did not possess the necessary qualifications for that grade level.

Finally, the Agency contends that the Arbitrator did not find the requisite conditions for abridging management's right to select. According to the Agency, the Arbitrator did not find that, but for the Agency's violation of the MOU, Aguirre would have been selected for the position at the GS-7 grade level. In support of its position, the Agency cites American Federation of Government Employees, Local 1923 and U.S. Department of Health and Human Services, Health Care Financing Administration, Baltimore, Maryland, 34 FLRA 301 (1990) (Health Care Financing Administration).

2. The Union

The Union argues that the Agency has confused the ranking procedure used to establish the best qualified list with the legal qualifications that are necessary for a promotion to a higher grade level. The Union further asserts that the Agency is simply disagreeing with various findings made by the Arbitrator.

The Union also disagrees with the Agency's argument that the award abrogates management's right to select and that the Arbitrator did not meet the conditions to abridge that right. First, the Union states that the Agency is disagreeing with the Arbitrator's interpretation of the MOU that the grade level of an employee's prior position, not the grade level at which the employee made the best qualified list, determines the grade level from which an employee should be promoted under the MOU. The Union notes that the documentation in Aguirre's case indicates that she met time-in-grade requirements and the qualifications necessary for promotion to the GS-9 grade level. Next, the Union asserts that the Agency's argument that the award precludes management from setting the qualifications for the different grade levels constitutes disagreement with the Arbitrator's finding that the ranking procedures used to establish best qualified lists are not qualifications that determine the grade for which an employee is eligible.

Finally, the Union argues that in contending that the Arbitrator failed to show that but for the violation of the MOU Aguirre would not have been selected, the Agency is merely disagreeing with the Arbitrator's finding that Aguirre was qualified to be promoted to the GS-9 grade level. The Union notes that Aguirre made the best qualified list, that management selected her, and that the Arbitrator did not disturb either the manner in which the best qualified list was developed or management's selection of Aguirre. The Union also contends that the Agency's reliance on Health Care Financing Administration is misplaced. The Union states that that case involved an employee's nonselection for a position and is distinguishable from the present case, which concerns the grade level to which a properly selected employee should be promoted.

B. Analysis and Conclusions

For the reasons explained below, we find no merit to the Agency's exceptions.

Initially, we note the Agency's contentions that the award abrogates the exercise of various management rights. Ordinarily, when an agency claims that an award abrogates 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 that test, we first determine whether a contractual provision enforced by an arbitrator constitutes an arrangement for employees adversely affected by the exercise of a management right.

In this case, there is no basis on which to find that the Arbitrator was enforcing a negotiated arrangement for employees adversely affected by the exercise of a management right. Thus, the Arbitrator did not consider section 4.C.2. of the MOU to be an arrangement for employees adversely affected by the exercise of the rights to assign and select employees and there is no evidence that the parties intended it to be such. Instead, the Arbitrator found that section 4.C.2. of the MOU essentially provides a process whereby an "employee's promotion to the next higher grade is measured by reference to the grade level of the employee's prior position . . . ." Award at 17. Therefore, we need not apply the test set forth in Customs Service. See also U.S. Department of Defense, National Guard Bureau, Washington Army National Guard, Tacoma, Washington and National Association of Government Employees, Sub-Local R12-122, 45 FLRA 782, 788 (1992); U.S. Department of Veterans Affairs Medical Center, Providence, Rhode Island and Laborers' International Union of North America, Local 1056, 37 FLRA 566, 569 n.* (1990).

Next, we address the Agency's contentions that the award is inconsistent with the rights to assign and select employees because the Arbitrator interfered with management's rights to determine the qualifications of positions and to select a qualified candidate for a position. Under sections 7106(a)(2)(A) and 7106(a)(2)(C) of the Statute, management has the right to determine the qualifications, skills, and abilities needed to perform the work of a position and to determine whether candidates for a position possess such requirements. In addition, under section 7106(a)(2)(C), management has the right to select from a group of properly ranked and certified candidates for promotion. See Federal Employees Metal Trades Council of Charleston and U.S. Department of the Navy, Charleston Naval Shipyard, Charleston, South Carolina, 44 FLRA 683, 687 (1992); U.S. Department of the Navy, Naval Aviation Depot, Marine Corps Air Station, Cherry Point, North Carolina and International Association of Machinists and Aerospace Workers, Local 2297, 36 FLRA 28, 31 (1990).

In our view, the Agency has failed to establish that the award interferes with the Agency's right to determine the qualifications of positions. Contrary to the Agency's assertion, the Arbitrator did not determine the qualifications that Aguirre or any other employee needed in order to perform higher graded work. Indeed, the Arbitrator found that the Agency evaluated Aguirre under the factors and weights for grades 5, 7, and 9 because she was "qualified for all three grade levels . . . ." Award at 2. In addition, the Arbitrator made no findings that would preclude the setting of qualifications at the various grade levels as the Agency claims.

We also find that the award does not interfere with management's right to select employees.(2) In this connection, the Agency argues that the Arbitrator failed to find that but for the Agency's violation of the MOU, Aguirre would have been selected for the claims representative position at the GS-7 level. When an arbitrator is not enforcing an arrangement, such as in this case, management's right to select employees for promotion can be abridged by an award of an arbitrator only when the arbitrator finds a direct connection between improper agency action and the agency's failure to select a specific employee for promotion. See Federal Deposit Insurance Corporation, Chicago Region and National Treasury Employees Union, Chapter 242, 45 FLRA 437, 443 (1992). In addition, we approach awards of promotions by arbitrators in relation to section 7106(a)(2)(C) in the same manner as awards of retroactive promotions with backpay by arbitrators under the Back Pay Act. See id. Thus, we review such awards for evidence of a finding by the arbitrator of a direct connection between an unwarranted personnel action and the agency's failure to promote an employee and not for a specific recitation of certain words and phrases. See, for example, American Federation of Government Employees, Local 31 and U.S. Department of Veterans Affairs Medical Center, Cleveland, Ohio, 41 FLRA 514, 518-19 (1991) (VA Cleveland) (retroactive promotion ordered where arbitrator implicitly found that but for the violation of the agreement the grievant would have been one of the candidates selected).

We find that the Arbitrator made the required finding of a direct connection between the Agency's violation of section 4.C.2. of the MOU and Aguirre's failure to be promoted to the GS-9 grade level. The Arbitrator reviewed the bargaining history of the MOU and found that promotion to the next higher grade level under section 4.C.2. should be determined by reference to the grade level of the employee's prior position. The Arbitrator specifically found that the Agency's "failure to properly promote employees to the next highest grade as required by the 10/8/86 MOU was an unjustified and unwarranted personnel action . . . ." Award at 18. Thus, the Arbitrator made the required finding of a direct connection between the Agency's violation of the MOU and Aguirre's failure to be promoted to the GS-9 grade level and we reject the Agency's argument to the contrary. Finally, we note that our finding here is consistent with Health Care Financing Administration, in which the Authority discussed the basis on which an agency's right to select can be abridged.

V. Fourth Exception

A. Positions of the Parties

1. The Agency

The Agency argues that an award of backpay is not warranted because the Arbitrator did not find that, but for the Agency's violation of the MOU, Aguirre would have been selected at the GS-7 grade level and subsequently promoted to the GS-9 grade level and would not have suffered a loss of pay. The Agency asserts that the award should be prospective only because the Agency acted in accordance with Office of Personnel Management (OPM) regulations and Agency policies.

2. The Union

The Union argues that the award satisfies the requirements of the Back Pay Act, 5 U.S.C. § 5596. Thus, the Union states that the Arbitrator found that employees were affected by an unjustified or unwarranted personnel action when the Agency failed to promote employees to the proper grade as required by the MOU and correctly found that retroactive promotions and backpay were appropriate.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the award is contrary to the Back Pay Act. Under the Back Pay Act, an award of backpay is authorized when a grievant has been affected by an unjustified or unwarranted personnel action that has resulted in the withdrawal or reduction of all or part of the grievant's pay, allowances, or differentials. The Authority has stated that, in order to award backpay, an arbitrator must find that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; (2) the personnel action directly resulted in the withdrawal or reduction of the grievant's pay, allowances, or differentials; and (3) but for such action, the grievant otherwise would not have suffered the withdrawal or reduction. See, for example, VA Cleveland, 41 FLRA at 517. The Arbitrator's award in this case satisfies the requirements of the Back Pay Act.

As noted previously, the Arbitrator specifically found that the Agency's "failure to properly promote employees to the next highest grade as required by the 10/8/86 MOU was an unjustified and unwarranted personnel action . . . ." Award at 18. Thus, the Arbitrator's finding satisfies the first part of the test for determining whether backpay is authorized under the Back Pay Act. As to the second part of the test, it is not disputed that the Agency's failure to promote Aguirre and the other employees encompassed by the grievance in accordance with the MOU resulted in their loss of pay. With regard to the third part of the test, the Arbitrator found that there was a direct connection between the Agency's violation of the MOU and Aguirre's failure to be promoted to the GS-9 grade level. It is evident from this finding as well as the Arbitrator's overall finding that the Agency failed to promote employees under the terms of the MOU that but for the Agency's violation of the MOU, Aguirre and the other employees encompassed by the grievance would not have suffered a loss or reduction in pay.

Finally, in finding that the award of backpay is properly supported, we reject the Agency's contention that any remedy should be prospective because the Agency was acting in accordance with OPM regulations and Agency policies. The Authority has held that where an arbitrator finds that a violation of an agreement has resulted in the denial of an employee's financial entitlement, an award of backpay "is clearly consistent with the employee's statutory entitlement 'to receive for the period for which the [unjustified and unwarranted] personnel action was in effect . . . an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred . . . .'" National Labor Relations Board Union, Local 19 and Office of the General Counsel, National Labor Relations Board, 7 FLRA 21, 26 (1981) (footnote omitted). See also U.S. Department of the Air Force, Tinker Air Force