53:0390(46)AR - - Navy, Mare Island Naval Shipyard, Vallejo, CA and Federal Employees Metal Trades Council - - 1997 FLRAdec AR - - v53 p390
[ v53 p390 ]
The decision of the Authority follows:
53 FLRA No. 46
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF THE NAVY
MARE ISLAND NAVAL SHIPYARD
FEDERAL EMPLOYEES METAL TRADES COUNCIL
September 11, 1997
Before the Authority: Phyllis N. Segal, Chair; and Donald S. Wasserman, Member.
Decision by Chair Segal for the Authority.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Justin C. Smith 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 Regulations. The Union filed an opposition to the Agency's exceptions.
The Arbitrator sustained a grievance challenging the Agency's application and use of reduction in force (RIF) procedures that resulted in the grievant's separation. The Arbitrator awarded backpay and travel expenses to the grievant, and awarded attorney fees and costs to the Union.
For the following reasons, we remand the case to the parties for submission to the Arbitrator, absent settlement, for a clarification of the basis of the award.
II. Background and Arbitrator's Award
The grievant was a journeyman pipefitter assigned to "Group 56" at the time the Agency conducted a RIF in 1991. Award at 15. Prior to the RIF, there was only one competitive level in Group 56.(1) At the time of the RIF, however, the Agency had established three competitive levels: conventional, nuclear, and ocean engineering. The grievant was in the conventional competitive level and, as a result of the RIF, was separated on August 23, 1991. On January 7, 1992, the grievant was "reinstated" to a pipefitter position at Puget Sound Naval Shipyard.(2) Id. at 44. The grievant "received workers' compensation benefits, based on loss of wages" during the period between the separation and reinstatement. Exceptions at 2.
The Union filed a grievance alleging that the grievant had been improperly separated. The parties were unable to resolve their dispute and the matter was submitted to arbitration. Although the Arbitrator did not expressly state the issue before him, he stated that the dispute was:
"[W]hether the Grievant was equitably treated under governing laws and regulations" related to a RIF.
Award at 15.
Before the Arbitrator, the Union challenged the grievant's separation on three grounds. First, the Union asserted that the Agency improperly established three competitive levels in Group 56. Second, the Union claimed that the Agency improperly failed to permit the grievant to "retreat"(3) to a position in a different work group of employees -- Group 99 -- where, according to the Union, pipefitters with less seniority than the grievant had been retained. Third, the Union claimed that the grievant was the victim of "discrimination on the basis of physical handicap." Id. at 31. According to the Union, the Agency, in "EEO litigation which ha[d] taken place and [was] . . . final and formal, specifically found that [the grievant] was physically handicapped[.]" Id. at 32.
The arbitration hearing lasted 2 days. On May 19, 1995, the first day of the hearing, the Arbitrator permitted the grievant to testify out of order, interrupting the Agency's presentation of its case. At the conclusion of the grievant's testimony, the Arbitrator inquired whether the parties agreed that the Agency "ha[d] several more witnesses because . . . [the grievant was taken] out of order." Exceptions, Transcript at 179 (May 19, 1005). The parties agreed, and the Arbitrator scheduled August 1, 1995 as the second day of the hearing. However, 4 days before the hearing was to resume, the Agency requested a postponement because its witnesses were unavailable to testify.
The Arbitrator denied the Agency's request for a postponement and ordered the hearing to resume as scheduled. The Agency did not attend the second day of the hearing.
The Arbitrator issued both an interim and a final award. In his interim award, the Arbitrator stated that there was a "question of whether or not [the Agency] [w]as guilty of spoilage of evidence," and he directed the Agency to refrain from destroying any evidence related to the issue of damages. Award at 2. In his final award, the Arbitrator stated that the burden of proof is on the Agency when conducting a RIF to establish "that the manner in which the RIF was conducted [is] appropriate and that the creation of competitive levels [i]s proper." Id. at 17. The Arbitrator noted that the Agency "elected not to attend" the second day of the hearing and that the Agency did not "file a post hearing brief." Id. at 2.
The Arbitrator did not make any findings of fact in the final award. However, the Arbitrator quoted extensively from: (1) a report by the General Accounting Office (GAO) concerning the Agency's RIF,(4) and (2) the Union's statement made during the second day of the hearing. Following the quotations from the GAO report, the Arbitrator stated:
Thus, based upon the evidence adduced, as well as the findings of the GAO Investigative Report, it is respectfully submitted that [the Agency] has failed to carry its burden of proof to establish that the new competitive level for nuclear pipefitters was appropriately created for the 1990 RIF.
Id. at 24. Following the quotations from the Union's statement, the Arbitrator stated:
As a result of a complete and thorough review of the testimony of the parties and various documents and exhibits placed before the Arbitrator, the Arbitrator finds for the [g]rievant . . . .
Id. at 50.
The Arbitrator awarded the grievant backpay, travel expenses related to the grievance, annual and sick leave to attend the hearings, and the overtime that the grievant would have received in Group 56. The Arbitrator also awarded attorney fees and costs payable to the Union. Id. at 51.
III. Positions of the Parties
The Agency claims that the Arbitrator failed to conduct a fair hearing because he "denied agency witnesses an opportunity to testify" during the second day of the hearing. Exceptions at 4-5. The Agency argues that by taking witnesses out of order during the first day of the hearing, and by refusing to postpone the second day of the hearing, the Arbitrator denied the Agency the opportunity to "introduce critical evidence showing that separate competitive levels had been properly established." Id. at 6. The Agency maintains that if the Arbitrator had permitted the Agency to delay the second day of the hearing, then the Agency's witnesses would have proved by a preponderance of the evidence that the grievant was properly separated.
The Agency also argues that the Arbitrator based his award on a series of nonfacts. In particular, the Agency challenges the Arbitrator's determination that the Agency "'elected not to attend'" the second day of the hearing, claiming that the Arbitrator abused his discretion by refusing to postpone the second day of the hearing. Id. at 9. Additionally, the Agency objects to the Arbitrator's finding that the Agency "did not elect to file a post hearing brief[,]" on the basis that he "never requested or addressed the submission of post hearing briefs." Id. at 10. The Agency contends that the Arbitrator's determination that the Agency may have destroyed records "begs credulity" and that "there is no evidence . . . [to] support . . . this assertion[.]" Id. The Agency further challenges the Arbitrator's reliance on the GAO report, arguing that the Arbitrator never demonstrated the relevance of the report. Id. at 11. Finally, the Agency claims that the Arbitrator erred in "quoting assertions made by the union" during the second hearing because the Arbitrator "denied [the Agency] the opportunity to rebut the [Union's] assertions[.]" Id.
In addition, the Agency contends that the Arbitrator erred in ordering backpay. The Agency claims that, under the Federal Employees' Compensation Act (FECA), 5 U.S.C. §§ 8101 et seq., "a federal employee cannot obtain backpay where the employee is paid workers' compensation based upon lost salary for the same period."(5) Id. at 7. According to the Agency, the grievant received workers' compensation and, therefore, is not entitled to receive backpay for the same period of time.
Finally, the Agency argues that the award does not draw its essence from the parties' collective bargaining agreement. The Agency asserts that "the Arbitrator erred in ordering payment of travel and per diem expenses" because Article 34 of the agreement(6) "makes no mention of travel expenses or per diem for arbitrations." Id. at 8. In this regard, the Agency maintains that "[w]hen the agreement makes no mention of travel expenses or per diem, it is clear that the intent of the parties was not to provide for such expenses . . . especially . . . where other provisions of the agreement do provide for travel expenses and per diem." Id. Alternatively, the Agency challenges the remedy ordered by the Arbitrator as including expenses by the grievant that are "excessive" and "inconsistent" with 5 U.S.C. § 5724a. Id.
The Union argues that the Agency received a fair hearing. The Union contends that because the Agency chose not to attend the second day of the hearing, it "cannot contest the merits of the [A]rbitrator's decision, either regarding liability or remedy, in its Exception." Opposition at 1. In particular, the Union contends that the Agency's "failure to appear . . . justifies [an] entry of a default by the arbitrator." Id. at 3 (citing Toyota of Berkeley v. Local 1095, 834 F.2d 751 (9th Cir. 1987); Eichleay Corp. v. International Association of Ironworkers, 944 F.2d 1047 (3d Cir. 1991); and Corrallo v. Merrick Central Carburetor, 733 F.2d 248, 251 n.1 (2d Cir. 1984)).
The Union also argues that the Arbitrator's remedy is consistent with law, rule, and regulation. The Union states that it is significant that the Agency "failed to file a post-arbitration brief" on the issue of the Agency's potential liability for damages. Id. at 8. Based on the Agency's failure to appear and its decision not to file a brief, the Union claims that the Agency should be bound by the Arbitrator's remedy.
The Union contends that the Authority is bound under Federal law to uphold the Arbitrator's factual findings unless those findings "conflict with clear legal principles, . . . [are] fraudulent[,] or [they] completely lack any legal basis. Id. at 10. In this regard, the Union claims that, because both the Agency and the Union signed the collective bargaining agreement, and both agreed to arbitration as a method of dispute resolution, the Agency should not be permitted to avoid its obligation to participate in the second day of the arbitration.
Finally, the Union argues that the grievant received an amount of worker's compensation that was less than the compensation with overtime that the grievant would have received had he not been improperly separated. Id. at 11. The Union seeks the difference between the backpay award, including overtime, and the worker's compensation the grievant actually received.
IV. Analysis and Conclusions
A. The Agency's Failure to Participate in the Hearing Does not Preclude it from Filing Exceptions.
Section 7122(a) of the Statute provides that either the Agency or the Union may file exceptions to an arbitrator's award with the Authority. Nothing in the wording of section 7122(a) or Authority precedent construing this section supports a conclusion that a party is precluded from filing an exception to an award resulting from a hearing it did not attend. See e.g., American Federation of Government Employees, Local 1857 and Sacramento Air Logistics Center, McClellan Air Force Base, 34 FLRA 745, 748 (1990); see also Social Security Administration and American Federation of Government Employees, Local 1923, 32 FLRA 765, 766-67 (1988). Moreover, as the Statute expressly provides for the filing of exceptions in the Federal sector, the private sector decisions cited and relied on by the Union are not controlling in resolving the exceptions before the Authority. Therefore, we find no merit to the Union's claim that the Authority should not review the Agency's exceptions.(7)
B. The Arbitrator Conducted a Fair Hearing
It is well-established that an arbitrator has considerable latitude in the conduct of a hearing. The fact that an arbitrator conducts a hearing in a manner in which one party finds objectionable does not support a contention that the arbitrator denied that party a fair hearing. Commander, Carswell Air Force Base, Texas and American Federation of Government Employees, Local 1364, 31 FLRA 620, 629-30 (1988) (Carswell Air Force Base). However, the Authority will find an award deficient when an arbitrator refuses to hear or consider pertinent and material evidence, or conducts the proceeding in a manner that prejudices a party so as to affect the fairness of the proceeding as a whole. American Federation of Government Employees, Local 1668 and U.S. Department of the Air Force, Elmendorf Air Force Base, Anchorage, Alaska, 50 FLRA 124, 126 (1995).
There is nothing in the record demonstrating that the Arbitrator acted improperly so as to deny the Agency a fair hearing. The Agency contends that the Arbitrator denied the Agency's witnesses an opportunity to testify. In addition, we construe as a fair hearing claim the Agency's contention that the Arbitrator erred by quoting Union assertions because the Agency was "denied the opportunity to rebut the [Union's] assertions[.]" Exceptions at 11. These contentions are not persuasive, however, because the record establishes that the Agency was notified as to the time and place for the second hearing. Award at 26. The record also demonstrates that the Arbitrator considered the Agency's request for a postponement due to witness unavailability, but that he informed the Agency that the second day of the hearing would take place as scheduled. Exceptions, Attachment 2.
"Once the parties to a collective bargaining agreement submit the subject matter of a dispute to arbitration, procedural questions which . . . bear on its resolution should be left to the arbitrator." Carswell Air Force Base, 31 FLRA at 630. In this regard, it is a proper function of the Arbitrator to determine whether a proceeding should be delayed. Id. Here, the Arbitrator decided that the second day of the hearing should not be delayed. Under Authority precedent, the decision to resume the second day of the hearing as scheduled was properly within the Arbitrator's discretion. See id. The Agency fails to substantiate its claim that the Arbitrator foreclosed its opportunity for a fair hearing and, therefore, this exception provides no basis for finding the award deficient.
C. The Award Is Not Based On a Nonfact
To establish that an award is based on a nonfact, the appealing party must demonstrate that the central fact underlying the award is clearly erroneous, but for which a different result would have been reached by the arbitrator. U.S. Department of the Air Force, Lowry Air Force Base, Denver, Colorado and National Federation of Federal Employees, Local 1497, 48 FLRA 589, 593 (1993) (Lowry). However, the Authority will not find an award deficient on the basis of an arbitrator's determination on any factual matter that the parties disputed at arbitration. Id. at 594 (citing Mailhandlers v. Postal Service, 751 F.2d 834, 843 (6th Cir. 1985)).
The Arbitrator's findings that the Agency failed to attend the second day of the arbitration hearing and that the Agency did not submit a post hearing brief do not constitute nonfacts. The record establishes, and the Agency concedes, that it did not attend the hearing or submit a post hearing brief.(8) Exceptions at 3. Thus, the Agency fails to demonstrate that these findings by the Arbitrator are clearly erroneous.
In addition, the Agency's challenge to the Arbitrator's finding that the Agency may have destroyed records does not constitute a nonfact. The Agency is contesting the Arbitrator's determination of a factual matter that the parties disputed at arbitration, that is, whether the Agency destroyed records. Such challenges do not provide a basis for a conclusion that an award is deficient because it is based on a nonfact. See Lowry, 48 FLRA at 594.
Finally, the Agency's contention that the Arbitrator's award is deficient because he erroneously relied on the GAO report does not constitute a nonfact. The Agency presented no support for its assertion that the GAO report was erroneous or that the report was a central fact underlying the Arbitrator's award. Even if the Agency had established that the report was erroneous, the Agency has not demonstrated that the Arbitrator would have reached a different result but for his reliance on the GAO report.
Based upon the foregoing, the Agency has not established that the award is based on nonfacts. Accordingly, this exception provides no basis for finding the award deficient.
D. The Award Draws its Essence From the Parties' Collective Bargaining Agreement
The Agency's contention that the absence of any express language in the parties' agreement authorizing the payment of travel and per diem expenses demonstrates that the parties did not intend to provide for such expenses does not demonstrate that the award is deficient. In directing the Agency to pay the grievant travel and per diem expenses, the Arbitrator, in effect, interpreted the parties' agreement as requiring reimbursement of such expenses. It is well-established that the question of interpretation of the parties' agreement is a question solely for the arbitrator, as it is the arbitrator's construction of the agreement for which the parties have bargained. U.S. Department of Health and Human Services, Social Security Administration, San Francisco Region and American Federation of Government Employees, Council 147, 38 FLRA 1183, 1188 (1990). In addition, although the Agency challenges the itemized costs awarded by the Arbitrator, Authority precedent establishes that arbitrators have broad authority to fashion remedies; the Authority has consistently denied exceptions that attempt to substitute another remedy for that formulated by the arbitrator. See American Federation of Government Employees, AFL-CIO, Local 2608 and U.S. Department of Health and Human Services, Social Security Administration, New York Region 2, San Juan Teleservice Center, 49 FLRA 1589, 1594 (1994).
The Agency fails to establish that the Arbitrator's award is implausible, irrational or in manifest disregard of the parties' agreement. Accordingly, this exception provides no basis on which to find the Award deficient.
E. The Award Is Not Contrary to 5 U.S.C. § 5724a, but a Remand Is Necessary to Clarify the Basis of the Award Under the Back Pay Act
In circumstances where an agency's exceptions challenge the award's consistency with law, we review the questions of law raised by the agency's exceptions and the Arbitrator's award 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)). Here, the Agency contends that the award is contrary to law because: (1) the travel and per diem expenses awarded by the Arbitrator exceed the costs permitted under 5 U.S.C. § 5724a; and (2) FECA precludes the grievant from receiving both worker's compensation and backpay for the same period of time.
1. 5 U.S.C. § 5724a
The Agency's reliance on 5 U.S.C. § 5724a is misplaced. This statutory provision addresses the expenditure of funds for the "relocation expenses of employees transferred or reemployed." It does not address, and therefore it places no limits on, the payment of travel and per diem expenses unrelated to relocation expenses. Accordingly, we find that this exception provides no basis on which to find the award deficient.
2. The Back Pay Act
Under the Back Pay Act, an award of backpay is authorized only when an arbitrator finds that: (1) the aggrieved employee was affected by an unjust 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. U.S. Department of Justice, Immigration and Naturalization Service, San Diego, California and American Federation of Government Employees, National Immigration and Naturalization Service Council, 51 FLRA 1094, 1097 (1996).
The Union concedes that the grievant received workers' compensation under FECA during at least part of the time for which he is seeking backpay. Award at 44; Opposition at 11. The issue before the Authority is whether the Arbitrator's award of full back pay, including overtime, should be reduced by the amount of workers' compensation already received, or whether the award of backpay must exclude the period of time during which the grievant received workers' compensation. As discussed below, to resolve this issue it is necessary to determine the basis for the Arbitrator's award of backpay. Specifically, it is necessary to ascertain whether the Arbitrator found that the Agency discriminated against the grievant on the basis of handicap, as alleged by the Union.
Under FECA, Federal employees may recover certain lost wages and medical costs incurred as the result of an injury sustained in the performance of their duties. See 5 U.S.C. § 8102. The amount of compensation for lost wages is limited to a percentage of the employee's monthly salary. See 5 U.S.C. § 8105. The receipt of compensation under FECA limits an employee's right to pursue other compensation from the United States. 5 U.S.C. § 8116(c). See Nichols v. Frank, 42 F.3d 503, 514 (9th Cir. 1994). The legislative history of FECA establishes that the purpose of section 8116(c) is to limit the liability of the United States by precluding any additional payments of compensation to the employee for the work related injury. See Miller v. Bolger, 802 F.2d 660, 663-65 (3rd Cir. 1986).
Consistent with the foregoing, as a general rule, an employee may not be awarded backpay for any periods of time during which the employee received workers compensation benefits. As relevant here, regulations implementing the Back Pay Act provide that an award of backpay may not include any time period during which the affected employee was not available for work because of illness or injury. See 5 C.F.R. § 550.805(c)(1). Decisions of the Comptroller General confirm that backpay may not be provided for such periods. See Matter of Theodore F. Moran - Reduction in Back pay, 1980 WL 16330 (C.G.) (July 7, 1980) (B-195213).
An exception to the general rule prohibiting augmentation of workers' compensation benefits exists for awards of backpay under the Rehabilitation Act. See Johnson v. Sullivan, 764 F. Supp. 1053, 1063 (D.Md. 1991). The Rehabilitation Act provides equitable make-whole relief to employees who have been unlawfully discriminated against on the basis of handicap. See 29 U.S.C. § 701 et seq. Unlike FECA, which provides for payment of only a percentage of backpay, under the Rehabilitation Act an employee may receive full backpay in addition to other equitable relief. See Nichols v. Frank, 42 F.3d at 514-15. The only limitation on the Rehabilitation Act's remedies is a prohibition against double recovery by the employee. Thus, an award of backpay under the Rehabilitation Act may encompass the difference between workers compensation received and what the affected employee otherwise would have earned, including overtime.
In this case, the Union argued both that the Agency failed to properly apply RIF laws and regulations, see Award at 35-38, and that the Agency discriminated against the grievant on the basis of handicap, see id. at 31. The Arbitrator did not specify the basis of his award, stating only that "[a]s a result of a complete and thorough review . . . the Arbitrator finds for the [g]rievant . . . ." Id. at 50. Under these circumstances, we are unable to determine whether, in whole or in part, the backpay award is based on a finding that the Agency unlawfully discriminated against the grievant. Accordingly, we remand this case to the parties for resubmission to the Arbitrator for clarification of the award. The remand is for the limited purpose of having the Arbitrator clarify and interpret his award by stating the basis on which he awarded backpay.
On remand, a determination that the award was based upon the Agency's failure to properly apply RIF laws and regulations would have the effect, as claimed by the Agency, of precluding the grievant from receiving any amount of backpay for the period of time during which he received workers' compensation because he was not available to work. In contrast, a determination that the award was based upon an unlawful discriminatory action by the Agency would require modification of the award to reduce the amount of backpay, including overtime, by the amount of workers' compensation received by the grievant.
This case is remanded to the parties for submission to the Arbitrator, absent settlement, for a clarification of the basis of the Award.
(If blank, the decision does not have footnotes.)
1. During a RIF, employees compete against each other in a competitive level for retention standing. See National Association of Government Employees, Local R3-10 and U.S. Department of Transportation, Federal Aviation Administration, 51 FLRA 1265, 1266 n.3 (1996).
2. The record contains no explanation of the basis for the grievant's appointment to the position at Puget Sound.
3. "Retreat" refers to the right of an employee to displace others who occupy positions with lower retention standing. See 5 C.F.R. § 351.701(a).
4. The Arbitrator did not explain the relevance of the GAO report to the issues raised in the grievance before him. We note that the report was issued in response to a Congressional request "to examine: (1) the reasons for the RIF [at Mare Island Shipyard]; (2) its impact on women and blacks and shipyard actions to reduce that impact; (3) the appropriateness of using separate job categories for nuclear and ocean engineering work; and (4) the layoff rates for white-collar positions versus blue-collar positions." Exceptions, Attachment 5 at 1.
5. FECA provides, in relevant part:
The liability of the United States or an instrumentality thereof under this subchapter . . . with respect to the injury or death of an employee is exclusive and instead of all other liability of the United States . . . .
5 U.S.C. § 8116(c).
6. Article 34, entitled "Arbitration," states:
Section 4. . . . the aggrieved employee, and witnesses who have direct knowledge of the circumstances and factors bearing on the case shall be excused from duty to participate in the arbitration proceedings without loss of pay or charge to annual leave.
Exceptions at 8.
7. Although the Agency's exceptions are not barred by its failure to attend the second day of the arbitration hearing, we note that the Authority "will not consider [any] evidence offered by a party . . . which was not presented in the proceedings before . . . [the] arbitrator." 5 C.F.R. 2429.5.
8. Contrary to its claim that the Arbitrator never addressed the submission of post hearing briefs, the Agency concedes that the Arbitrator denied several requests for post heari