52:1477(138)AR - - AFGE Local 2207 and VA Medical Center, Birmingham, AL - - 1997 FLRAdec AR - - v52 p1477
[ v52 p1477 ]
The decision of the Authority follows:
52 FLRA No. 138
FEDERAL LABOR RELATIONS AUTHORITY
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
U.S. DEPARTMENT OF VETERANS AFFAIRS
May 15, 1997
Before the Authority: Phyllis N. Segal, Chair;
Donald S. Wasserman, Member
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Roberta J. Bahakel filed by the Union under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency did not file an opposition to the Union's exceptions.
The Arbitrator found that the grievance was not arbitrable because it was barred by a prior settlement agreement. For the following reasons, we remand the case to the parties for submission to the Arbitrator, absent settlement, for further proceedings consistent with this decision.
II. Background and Arbitrator's Award
On December 21, 1989, the Agency and Union signed an agreement settling an October 1989 grievance regarding the exposure of certain unit employees to asbestos.(1) The Union filed two more asbestos-related grievances, one dated May 23, 1991, and a separate one dated June 3, 1991. According to the Arbitrator, the May 1991 grievance contended that the December 1989 settlement agreement was inadequate and treated the majority of the members unfairly and unjustly.(2) The June 1991 grievance alleged that the entire bargaining unit was entitled to environmental differential pay and hazardous duty pay for ongoing exposure to asbestos from the date of employment or 1975, whichever date was later. Exceptions, Exhibit B at 2.
The unresolved matter was submitted to the Arbitrator, who identified the issues as:
1.Is the grievance dated May 23, 1991, timely?
2.Is the grievance dated May 23, 1991, arbitrable?
3.If the grievance is arbitrable and timely, did the Agency violate the Work and Safety provisions of the contract in a manner where the Union employees are entitled to be paid Environmental Differential Pay or Hazardous Duty Pay for the time period beginning March 9, 1975 or the employee's date of hire, whichever is later?
Award at 2.
Before the Arbitrator, the Agency argued that the 1989 settlement agreement barred the filing of any further grievances on the issue of asbestos. The Union argued that the settlement agreement was invalid because it was signed by the Union vice president, who did not have the authority to sign such an agreement, and because the Agency knew the vice president lacked such authority. The Union based this argument on a letter, dated December 8, 1989, sent by the Union president to management, which stated: "The Union president will make all final decisions on Step 3 and above issues unless he designates someone else." Exceptions, Exhibit F at 2.
The Arbitrator concluded that the grievance before her was timely but not arbitrable. The Arbitrator found that the vice president had the authority to sign the settlement agreement because the president had told him to "handle" and "take care" of it. Award at 8. Furthermore, the Arbitrator determined that the letter did not terminate the vice president's authority because it did not constitute proper notice to management. Therefore, the Arbitrator found that the settlement agreement was valid and that it barred arbitration of the grievance. Accordingly, the Arbitrator denied the grievance.
First, the Union argues that the award is a "misinterpretation and misapplication of the law of agency as applied to the facts of this case." Exceptions at iii. Specifically, the Union contends the Arbitrator erred in finding that the Union vice president had the authority to negotiate or sign the December 1989 settlement agreement. Based on the letter of December 8, 1989, the Union argues that its vice president was acting beyond the scope of his authority. The Union contends that the letter limited the vice president's apparent authority on final decisions on step 3 and above, and that, because the Agency had knowledge of this limitation, the Agency could no longer negotiate with him concerning the settlement of this grievance.
Second, the Union contends that the Arbitrator's decision was based on the wrong grievance. The Union argues the June 1991 grievance was the only grievance before the Arbitrator. According to the Union, the May grievance was submitted to the Arbitrator only as evidence on an issue of timeliness concerning the June 1991 grievance.
Third, the Union contends that the December 1989 settlement agreement could bar claims only before the date of the signing of the agreement. The Union notes that the June 1991 grievance deals with risks of asbestos exposure that occurred after December 1989. It argues that the settlement agreement cannot bar claims against risks that were unknown to the parties at the time.
Fourth, the Union asserts that the Arbitrator erred in finding that the December 1989 settlement agreement, which pertained only to the employees of engineering service, dietetic service, and the telephone switchboard room, barred the current grievance, which was brought on behalf of all the unit employees at the hospital. The Union argues that this denies those employees who were not covered by the October 1989 grievance of their right to "grieve and be represented[.]" Exceptions at 4.
IV. Analysis and Conclusions
A.The Award Is Not Contrary to Law
As the Union alleges that the Arbitrator's findings are contrary to the law of agency, we review those exceptions de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)).
The authority of the vice president to sign the settlement agreement is determined under principles of agency law. Applying these principles, the enforceability of the December 1989 settlement agreement requires an examination of: (1) the scope of the vice president's authority to enter into a settlement agreement; and (2) whether the December 8 letter effectively terminated that authority.
In an agency relationship a principal confides to an agent the management of business to be transacted in the former's name. See generally 3 Am. Jur. 2d Agency § 1 (1986). The authority of an agent to act on behalf of the principal can be either actual or apparent. Actual authority is authority that the principal has intentionally conferred upon the agent. See, for example, U.S. v. Schaltenbrand, 930 F.2d 1554, 1560 (11th Cir. 1991). Apparent authority occurs where the principal has held out the agent as having such authority or has permitted the agent to represent that he has such authority. 3 Am. Jur. 2d Agency § 78 (1986). It has been held that "when an agent is appointed to negotiate a collective-bargaining agreement that agent is deemed to have apparent authority to bind his principal in the absence of clear notice to the contrary." Metco Products, Inc. v. NLRB, 884 F.2d 156, 159 (4th Cir. 1989) (Metco) (citing University of Bridgeport, 229 NLRB 1074 (1977)).
Authority will be terminated if the agent is given sufficient notice. 3 Am. Jur. 2d Agency § 51 (1986). Sufficient notice occurs if the agent actually knows, or has reason to know, facts indicating that the authority has been terminated. Id. However, the acts of an agent whose authority has been revoked may continue to bind a principal as against third persons who, in the absence of notice of the revocation of the agent's authority, rely upon its continued existence. 3 Am. Jur. 2d Agency § 52 (1986). See Southwest Sunsites, Inc. v. F.T.C., 785 F.2d 1431, 1438 (9th Cir. 1986) (a principal is bound by the acts of its agent if those acts are within the scope of the agent's authority, unless the third party has actual notice that the acts are unauthorized).
In this case, the Arbitrator found that the Union president told the vice president to "handle" and "take care" of the October 1989 grievance. Award at 6. The Arbitrator also found that the union's national vice president, in a letter to the local president, stated that the local vice president told him that the president had given him the case to handle. Id. Based on these findings, we conclude that, at a minimum, the vice president had apparent authority to negotiate the October 1989 agreement because he had been appointed to negotiate that agreement. Metco, 884 F.2d at 159. The Arbitrator did not find that this authority was limited in any way. Based on the Arbitrator's findings, we conclude that the president gave the vice president the authority to negotiate the settlement agreement, and that this authority was not limited.
Further, the Arbitrator did not find that the vice president's authority was later terminated. Rather, the Arbitrator credited the vice president's testimony that he had discussed the settlement with the president, who never told him that he should not proceed with it. Award at 6. Moreover, we note that the vice president continued to exercise such authority 14 months after the events at issue here, when he signed a supplemental agreement detailing the payments to be made as part of the settlement agreement. Exceptions, Exhibit I at 1.
In any event, the Union would still be bound by the vice president's acts unless the Agency had clear and actual notice that his authority had been terminated. Southwest Sunsites, Inc., 785 F.2d at 1438; Metco, 884 F.2d at 159. The Union argues that the December 8 letter gave such notice by stating that the president "will make all final decisions on Step 3 and above issues unless he designates someone else." Exceptions, Exhibit F at 2. However, the Arbitrator found that the letter did not constitute proper notice to management of a termination of any authority the vice president may have had. Consistent with this finding, and the others set forth above, we conclude that the settlement agreement is enforceable. Accordingly, the award is not deficient on this basis.
B.A Remand Is Necessar