49:1430(129)AR - - Treasury HQ, IRS, Washington, D.C. and NTEU, Chapter 65 - - 1994 FLRAdec AR - - v49 p1430



[ v49 p1430 ]
49:1430(129)AR
The decision of the Authority follows:


49 FLRA No. 129

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

U.S. DEPARTMENT OF THE TREASURY

HEADQUARTERS, INTERNAL REVENUE SERVICE

WASHINGTON, D.C.

(Agency)

and

NATIONAL TREASURY EMPLOYEES UNION

CHAPTER 65

(Union)

0-AR-2553

_____

DECISION

June 30, 1994

_____

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 M. David Vaughn 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 ruled that the Agency violated the parties' collective bargaining agreement and Agency regulations by not properly giving the grievant priority consideration for a promotion to a vacant GS-14 Tax Law Specialist position. The Arbitrator found that the grievant would have been selected for the position, but for management's failure to give him bona fide priority consideration. As a remedy, the Arbitrator ordered that the grievant be selected for the next appropriate GS-14 Tax Law Specialist vacancy and be given retroactive backpay to the date of the filing of the grievance if, during the period between the filing of the grievance and the date of the award, an appropriate vacant GS-14 Tax Law Specialist position was filled with someone other than the grievant.

The Agency excepts to the Arbitrator's award on the grounds that it fails to draw its essence from the parties' collective bargaining agreement and is contrary to law. For the following reasons, we conclude that the Agency's exceptions fail to establish that the award is deficient. Therefore, we will deny the exceptions.

II. Background and Arbitrator's Award

The grievant is employed as a GS-13 Tax Law Specialist in the Employee Plans, Technical and Actuarial Division of the Agency's Chief Counsel's Office. The grievant's duties in this division include researching and drafting Agency rulings and Private Letter Rulings interpreting and applying the Employee Retirement Income Security Act.

Prior to the filing of the grievance in this case, the grievant grieved his nonselection for either of the two GS-14 Tax Law Specialist positions that he applied for and which were filled by the Agency during 1991. The grievance was resolved by awarding the grievant priority consideration for the next vacant GS-14 Tax Law Specialist position.

The grievant subsequently exercised his right to priority consideration in applying for a vacant GS-14 Tax Law Specialist position. The grievant was rated as "good" by a special panel convened to evaluate the grievant's promotion potential for that position. This rating was lower than two previous ratings of "substantial" or "outstanding" given by rating panels which evaluated the grievant's promotion potential for other vacant GS-14 Tax Law Specialist positions. In support of its rating, the panel indicated that the grievant needed "minimal" additional training and development. Award at 5.

The grievant was not selected for the position. The selecting official informed the grievant that he was not selected because the Agency had a limited number of GS-14 slots and "he was good, but not the best . . . ." Id. at 6. A grievance was filed over Agency's failure to select the grievant. The grievance was not resolved and was submitted to arbitration on the following stipulated issue:

Did the Agency properly accord [the g]rievant priority consideration in accordance with the [a]greement and applicable laws and regulations? If not, what shall be the remedy?

Id. at 1.

Before the Arbitrator, the Union argued that the Agency violated Article 13, Section 10 of the parties' agreement.(1) The Union asserted that the Agency "improperly compared [the g]rievant with other candidates for the position rather than with the standards required for the job, improperly created selection standards above the minimum standards for the position, and failed to afford [the grievant] bona fide consideration [for the position]." Id. at 7. The Union also argued that the grievant's promotion potential rating was lowered from previous panel ratings in retaliation for the grievant's having filed and settled his previous grievance, which resulted in the right to priority consideration that he exercised for the position at issue in this case.

The Agency contended before the Arbitrator that it afforded the grievant appropriate priority consideration for the position at issue. The Agency asserted that there was no evidence to show that the Agency lowered the grievant's promotion potential evaluation or failed to select him for the vacancy in retaliation for his having previously filed a grievance. The Agency also denied comparing the grievant to other applicants when considering his application.

The Arbitrator stated that priority consideration must be construed in accordance with its remedial purpose and not simply as a procedural formality. The Arbitrator also stated that priority consideration "does not require that the employee accorded such [c]onsideration be selected for the position[.]" Id. at 9. The Arbitrator found that Agency regulations required that an employee entitled to priority consideration be given full and fair bona fide consideration for the position and that the employee "be treated as the only candidate on a 'best qualified' list for the position." Id. (citing Internal Revenue Manual (IRM) paragraph 0335.251(9)).

The Arbitrator found that there was no dispute that the position for which the grievant requested and was granted priority consideration was an appropriate vacancy. The Arbitrator also found that the grievant's performance appraisal for the period just prior to the events at issue in this case and his appraisal for the period including the nonselection action at issue in this case rated his performance as "outstanding" in one critical element and "exceeds fully successful" in the four other critical elements and that the five elements were identical to the critical elements of the vacant GS-14 position.

The Arbitrator noted that the selecting official conceded that the grievant was qualified for the vacancy and exceeded the minimum requirements of the position. The Arbitrator ruled that the grievant was not selected for the position because the selecting official was looking for "excellent or outstanding candidates" for the position. Id. According to the Arbitrator, the selecting official established selection criteria for competing applicants above the minimum qualifications set forth in the vacancy announcement.

The Arbitrator found that, under the provisions of the parties' agreement and the IRM, the grievant, while exercising his right to priority consideration, was not to be treated in the same manner as other applicants. Rather, the Arbitrator found that the Agency was required to compare the grievant against the requirements of the vacant position as if he were the only candidate on the best-qualified list and to determine if he could perform the duties of the position adequately. The Arbitrator ruled that, because priority consideration under the parties' agreement entitles an applicant to a noncompetitive process affording different and more favorable consideration than the competitive selection process, the intent of the parties was that if the grievant was found to be able to perform the duties of the position adequately, then "the Agency was required to select him." Id. at 10. The Arbitrator rejected the Agency's contention that another arbitrator's analysis in an award concerning priority consideration in U.S. Department of Health and Human Services, Social Security Administration, Kansas City, Missouri and American Federation of Government Employees, Local 1336, 37 FLRA 816 (1990) (SSA, Kansas City), motion for reconsideration denied, 38 FLRA 1480 (1991) should not apply to this case.

The Arbitrator found, based on the record, that the grievant met or exceeded the minimum qualifications for promotion to the vacant GS-14 position. The Arbitrator also found that the grievant was not selected for the position because of comparisons with potential candidates who met the higher standard established by the selecting official. Accordingly, the Arbitrator determined that the grievant was not given bona fide priority consideration for a noncompetitive selection, but had been subjected to a competitive process. Consequently, the Arbitrator concluded that the Agency's nonselection of the grievant violated the parties' agreement and the IRM and sustained the grievance. The Arbitrator found, however, that the Union had not met its burden of showing that the grievant's nonselection was in retaliation for the grievant having previously filed a grievance and declined to sustain the grievance on that basis.

The Arbitrator next determined that the grievant would have been promoted to the vacant GS-14 Tax Law Specialist position, but for the Agency's failure to afford him bona fide priority consideration. In reaching this conclusion, the Arbitrator expressly rejected the Agency's contention that "there is no clear evidence" that the grievant would have been given the promotion absent the impropriety of the selection process. Id. at 13. In this regard, the Arbitrator noted that the grievant "probably" met or exceeded the minimum qualifications for the position by a "wider margin" than the special panel found because the panel's "significantly" lower evaluation of the grievant's promotion potential than previous rating panels and negative comments relating to his promotion potential were not supported by record documentation. Id. at 11, 13. Rather, according to the Arbitrator, the record "uniformly" indicated that the grievant was performing at a higher performance level than the "good" rating given by the panel. Id. at 11.

As a remedy, the Arbitrator, referencing SSA, Kansas City, 37 FLRA at 825-26, determined that a prospective promotion to the next available, appropriate vacancy would be proper where it is determined that an employee would have been promoted under the proper application of priority consideration, but for management's errors in the selection process. The Arbitrator specifically rejected the Agency's contention that, in the event the grievance was sustained, an appropriate remedy would be to award the grievant priority consideration for the next appropriate vacancy. Consequently, the Arbitrator awarded the grievant promotion to the next available, appropriate GS-14 Tax Law Specialist position. In the event that the Agency had filled a vacant GS-14 Tax Law Specialist position during the period between the date of the grievance and the date of his award, the Arbitrator also awarded the grievant backpay and benefits "in the amount of the difference between what [the grievant] made and what he would have made, if promoted to the first such position, retroactive to the date of the filling of such position." Id. at 13.

III. First Exception

A. Positions of the Parties

1. Agency

The Agency contends that the Arbitrator's award is deficient because it fails to draw its essence from the parties' collective bargaining agreement. Specifically, the Agency contends that the Arbitrator's award is contrary to Article 13, Section 10 of the parties' agreement. The Agency claims the Arbitrator erroneously concluded that the parties' agreement "mandates that an individual with priority consideration be selected for the position" and that the employee "receive more favorable consideration" than other applicants. Exceptions at 4. The Agency disputes the Arbitrator's finding that under Article 13, Section 10 of the agreement, the Agency was required under priority consideration to select a candidate upon a determination that the individual could adequately perform the duties of the position. The Agency asserts that the parties' agreement and the IRM only require that an employee under priority consideration be considered prior to any other applicants.

2. Union

The Union contends that the Arbitrator's award is well reasoned and draws its essence from the contract. The Union claims that "[i]t is abundantly clear from the award that the [A]rbitrator reached his conclusion regarding priority consideration by interpreting and applying the relevant provisions of the parties' collective bargaining agreement." Opposition at 9. According to the Union, the Arbitrator correctly concluded that, given the remedial purposes of the priority consideration provisions of the IRM and the parties' agreement, the Agency was required to compare the grievant against the qualifications of the position to see if he could perform the position adequately and to select him for the position if the Agency found that he could perform the duties of the position adequately. The Union asserts that the Agency "misrepresents the Arbitrator's award" by claiming that the award requires that an employee exercising the right to priority consideration be selected for the position. Opposition at 9-10.

The Union claims that the Agency's exception attempts to relitigate the Arbitrator's construction of the agreement regarding priority consideration and is "nothing more than a specious reprise of the [a]gency arguments previously rejected by the Authority in [SSA, Kansas City]." Id. at 7. The Union notes that disagreement with an arbitrator's interpretation and application of provisions of an agreement does not constitute a basis for reviewing the arbitrator's award.

B. Analysis and Conclusions

To demonstrate that an award fails to draw its essence from an agreement, the party making the allegation 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, for example, U.S. Department of the Air Force, Tinker Air Force Base, Oklahoma and American Federation of Government Employees, Local 916, 42 FLRA 1342, 1349 (1991) (Tinker AFB).

The Agency has not demonstrated that the award fails to draw its essence from the collective bargaining agreement under any of these tests. The Arbitrator interpreted Article 13, Section 10 of the parties' agreement, consistent with the remedial purpose of priority consideration, as requiring the Agency to give employees entitled to priority consideration bona fide consideration based upon those employees' ability to perform the work of the positions for which they have applied and not to compare them with any other applicants. The Arbitrator rejected the view that, under the agreement, priority consideration was "simply . . . a procedural or sequential formality." Award at 9. Based on his interpretation of the parties' agreement and the IRM, the Arbitrator concluded that it was the intent of the agreement that where an applicant entitled to priority consideration was found by the Agency to be able to perform adequately the duties of the position for which the applicant was being considered, the Agency would select that applicant. Accordingly, the Arbitrator ruled that the Agency violated the parties' agreement when it failed to select the grievant for the vacant GS-14 Tax Law Specialist position.

We find that the Agency has not established that the Arbitrator's award could not, in any rational way, be derived from the parties' agreement or that the Arbitrator's interpretation of the agreement, consistent with the remedial purpose of priority consideration, is irrational, unfounded, or implausible. Rather, the Agency's exception constitutes mere disagreement with the Arbitrator's interpretation of the parties' agreement as requiring more than compliance with particular procedures. Accordingly, there is no basis to conclude that the award fails to draw its essence from the agreement. See U.S. Department of the Air Force, Headquarters, Oklahoma City Air Logistics Center, Tinker Air Force Base and American Federation of Government Employees, Local 916, 44 FLRA 921 (1992); Tinker AFB, 42 FLRA at 1350. Therefore, we will deny the Agency's first exception.

IV. Second Exception

A. Positions of the Parties

1. Agency

The Agency excepts to the Arbitrator's conclusion that it was required by the parties' agreement to select the grievant. The Agency asserts that the Arbitrator's conclusion "[c]ompromises" its right to select under section 7106(a)(2)(C) of the Statute because "it require[s] the Agency to fill vacancies from a single source: a candidate who has priority consideration." Exceptions at 9.

The Agency claims that this case is distinguishable from SSA, Kansas City, in which the Authority held, under Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA 309 (1990) (Customs Service), that the contract provision governing priority consideration that was enforced by the arbitrator in that case did not abrogate the exercise of management's right to select. The Agency concedes that the provision enforced by the Arbitrator in this case is an arrangement for employees adversely affected by the exercise of a management right. However, the Agency asserts that, unlike the situation presented in SSA, Kansas City, the provision, as interpreted and applied by the Arbitrator, abrogates management's right to select. In this regard, the Agency argues that in SSA, Kansas City, while management's right to select from any appropriate source was limited to employees with priority consideration, management was nevertheless permitted "to select [from] among qualified and unqualified candidates with priority consideration." Id. at 12.

In contrast, the Agency asserts that under the provisions of the IRM, only qualified employees are able to exercise the right to priority consideration. Therefore, the Agency argues that it is "deprived of the opportunity to select[,]" as in SSA, Kansas City, from among "qualified and unqualified candidates[.]" Id. Consequently, the Agency claims that "[t]here is a fundamental difference between the instant situation" and the situation presented in SSA, Kansas City. The Agency asserts that the Arbitrator's award "constitutes a substantive limit on management's right to select employees from any appropriate source in violation [of section 7106(a)(2)(C)] of the Statute and is therefore deficient." Id. at 11, 12.

2. Union

The Union contends that the Agency's exception does not provide a basis for finding the award deficient and is a "frivolous relitigation" of SSA, Kansas City. Opposition at 11. The Union notes that the Agency concedes that the provision enforced by the Arbitrator in this case is an arrangement under Customs Service. The Union asserts that, in interpreting and applying the provision, "the Arbitrator only requires management to select an employee exercising a priority consideration when management determines that the application meets the minimum standards that management has set for adequate performance of the job." Id. at 12. The Union states that, while "this interpretation limits management from selecting from any appropriate source in those instances where a qualified employee exercises priority consideration," it does not, under Customs Service, abrogate management's right to select under section 7106(a)(2)(C) of the Statute. Id. (citing SSA, Kansas City, 37 FLRA at 822).

B. Analysis and Conclusions

Under Customs Service, we examine the provision enforced by the arbitrator to determine: (1) if it constitutes an arrangement for employees adversely affected by the exercise of management's rights; and (2) if, as interpreted by the arbitrator, it abrogates the exercise of a management right. As we stated in Customs Service, "where an arrangement has been negotiated by the parties and enforced by an arbitrator in a way that does not abrogate management's rights, we will view the arrangement as appropriate for agreement and enforcement consistent with section 7106(b)(3)." 37 FLRA at 315. Accordingly, we will not find such an award is contrary to law and we will deny the exception. Id. at 317-318.

When an agency excepts to an award on the basis that an arbitrator's enforcement of a contractual provision interferes with the exercise of a management right, we apply, as appropriate, the test set forth in Customs Service. The Agency claims that the award is deficient under Customs Service because it abrogates management's right to select under section 7106(a)(2)(C) of the Statute. Applying the approach set forth in U.S. Customs Service in this case, we conclude that the Agency fails to establish that the award is contrary to section 7106(a)(2)(C). Article 13, Section 10 provides that priority consideration is given as an "corrective action" for employees who have been denied proper consideration during the selection process. It is apparent, as conceded by the Agency and found by the Arbitrator, that Article 13, Section 10 is intended as an arrangement for employees adversely affected by management's right to select. Accordingly, we find that Article 13, Section 10, constitutes an arrangement within the meaning of section 7106(b)(3) of the Statute. Consequently, we find that, in enforcing Article 13, Section 10, the Arbitrator enforced a contractual arrangement for employees adversely affected by the exercise of management's right to select.

Furthermore, we find that the provision as interpreted and applied by the Arbitrator does not abrogate management's right to select. We find that the Arbitrator's interpretation and application of the parties' priority consideration provision only requires management to select an employee receiving priority consideration when management determines that the employee meets the minimum standards that management has set for adequate performance of the job. In particular, we find that the Arbitrator's interpretation of the parties' provision is substantially similar to the arbitrator's interpretation of the priority consideration provision at issue in SSA, Kansas City.

In SSA, Kansas City, we held that the arbitrator's award was not deficient under Customs Service because the parties' priority consideration provision, as interpreted by the arbitrator, did not abrogate management's right to select under section 7106(a)(2)(C) of the Statute. In reaching that conclusion, we noted that the agency conceded that the grievant in that case was qualified for the position for which he applied and was not selected. We found that, although the priority consideration provision of the agreement, as interpreted and applied by the arbitrator, "limits management from selecting from any appropriate source in those instances where a qualified employee exercises [the right to] priority consideration, [it] preserves management's right to determine" the minimum standard for adequate performance of the job and provides no requirement that an unqualified employee be promoted under a priority consideration. SSA, Kansas City, 37 FLRA at 822.

The Agency in the case concedes that the grievant was qualified for the position for which he exercised his right to priority consideration. Further, we note that the Arbitrator's interpretation of the parties' priority consideration provision at issue in this case limits management from selecting from any appropriate source in those instances where a qualified candidate exercises the right to priority consideration. However, we also find that the Arbitrator's interpretation of the provision, like the arbitrator's interpretation of the provision at issue in SSA, Kansas City, preserves management's right to determine the minimum standards for adequate performance of the job and does not require that an unqualified employee be promoted under priority consideration.

Accordingly, we find, consistent with SSA, Kansas City, that the provision as interpreted and applied by the Arbitrator clearly does not abrogate the exercise by management of its right to select. See id. at 823. See also U.S. Department of Veteran Affairs, Medical Center, Hot Springs, South Dakota and American Federation of Government Employees, Local 1539, 48 FLRA 805, 815-16 (1993) (management's right to select was not abrogated where the arbitrator interprets a contractual provision to require management to select an employee exercising the right to priority consideration when management determines that the employee meets the minimum standards that management has set for adequate performance of the job). Therefore, we conclude that the provision was enforced by the Arbitrator consistent with management's right to select under section 7106(a)(2)(C) of the Statute. In reaching this conclusion, we reject the Agency's contention that SSA, Kansas City is distinguishable from the instant case. Specifically, we reject the Agency's contention that the Arbitrator enforced the provision so as to deprive the Agency of its "opportunity to select among qualified and nonqualified candidates[.]" Exceptions at 12.

Consequently, we conclude that the Arbitrator properly enforced Article 13, Section 10 of the parties' agreement and there is no basis for finding the award deficient on the ground that it abrogates management's right to select under section 7106(a)(2)(C) of the Statute. See, for example, 48 FLRA at 815-16.

V. Decision

The Agency's exceptions are denied.

APPENDIX

Article 13 of the parties' collective bargaining agreement, entitled "Promotion/Other Competitive Actions," provides in relevant part:

Section 10 Priority Consideration

A.
If it is determined, through the grievance procedure, that violations of the provisions of this article resulted in denying the grievant(s) proper consideration, corrective action will be taken as follows:

1. employees erroneously omitted from a best qualified list shall receive priority consideration in accordance with the FPM [Federal Personnel Manual];

2. employees on the best qualified list who did not receive a fair and objective rating from the ranking panel, ranking official or immediate supervisor shall be entitled to priority consideration, if their rank order on the best qualified list is improved;

3. employees who were erroneously omitted from, or improperly ranked on a roster announcement, but who do not otherwise qualify for relief under subsection A1 or 2 above, will be ranked in proper order on such a roster; and

4. other violations will be remedied as appropriate.

B.
Priority consideration consists of a promotion certificate which contains an employee's name alone being sent to a selecting official before the official considers other applicants for a position.

C.
An employee will be entitled to a separate priority consideration for each vacancy announcement for which the employee was improperly considered.

D.
If more than one employee is entitled to consideration, the names of only those employees will be submitted on a single certificate to the selecting official for the next appropriate vacancy.

E.
If the appropriate vacancy has already been announced, the employees due the priority consideration will be considered by the selecting official before other applicants are ranked or referred for selection.

F.
When the Employer considers employees who have priority consideration pursuant to this Agreement and does not select those employees, the Employer will put the reasons for nonselection in writing and serve a copy simultaneously on the employees.

G.
Once the deadline for filing a grievance or other complaint has passed, employees who have not filed a grievance or other complaint or had one filed on their behalf may only be given priority consideration pursuant to an order issued by a higher level authority.

IRM 0335.251, entitled "Priority Consideration," provides in relevant part:

(1) Priority Consideration is the process by which competitive procedures are temporarily suspended for the purpose of correcting or minimizing any injustice resulting from a violation of Federal Merit Promotion procedures. When non-selected employees have not actually been adversely affected by the violation, they are not entitled to Priority Consideration. . . .

(2) When Priority Consideration is prescribed as an appropriate remedy for a Merit Promotion violation, it must be ordered by the Head of Office and carried out by Personnel. Personnel must ensure that Priority Consideration is properly applied in accordance with FPM regulations and IRM procedures.

. . . .

(6) When ordering Priority Consideration, if the position under review is vacated, then Priority Consideration applies to that position. If the selected employee is not removed, an employee who was not given proper consideration in the original promotion action, and who has not since been promoted, is entitled to Priority Consideration for the first appropriate vacancy that becomes available.

(7) An appropriate vacancy is one for which the employee meets basic qualifications and is a reasonable candidate. It should be at the same grade level and generally in the same area of consideration as the position for which proper consideration was lost. . . . Priority consideration is granted once for each time proper consideration was lost.

(8) A candidate entitled to Priority Consideration does not have to compete with, nor should he/she be considered with, any candidates who are not also entitled to the same level of Priority Consideration. Candidates entit