53:0465(53)AR - - EEOC and AFGE, National Council of EEOC Locals No. 216 - - 1997 FLRAdec AR - - v53 p465
[ v53 p465 ]
The decision of the Authority follows:
53 FLRA No. 53
FEDERAL LABOR RELATIONS AUTHORITY
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
NATIONAL COUNCIL OF EEOC LOCALS NO. 216
(48 FLRA 822 (1993))
(49 FLRA 7 (1994))
DECISION AND ORDER ON REMAND
September 30, 1997
Before the Authority: Phyllis N. Segal, Chair; and Donald S. Wasserman, Member.
I. Statement of the Case
This case, on remand from the United States Court of Appeals for the District of Columbia Circuit, is before the Authority on exceptions to an award of Arbitrator Joseph Lazar 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.(1) The Union filed an opposition to the Agency's exceptions.(2)
The Arbitrator found that the Agency violated its collective bargaining agreement with the Union by unilaterally implementing a new performance appraisal system. The Agency filed exceptions to this award, contending that the Arbitrator was without authority to issue the award because he was not properly selected by the parties to hear the grievances. Alternatively, the Agency argued that even if the Arbitrator was properly selected, his award on the merits of the grievances was deficient.
The Authority ruled that the Agency had failed to establish that the award was deficient and denied the Agency's exceptions. Equal Employment Opportunity Commission and American Federation of Government Employees, National Council of EEOC Locals No. 216, 48 FLRA 822 (1993) (EEOC II), reconsideration denied, Equal Employment Opportunity Commission and American Federation of Government Employees, National Council of EEOC Locals No. 216, 49 FLRA 7 (1994) (EEOC III). On remand, we reconsider our previous decision and find that the Arbitrator was disqualified from ruling on his own continued employment by "impermissible self-interest." We also find the Arbitrator was not properly selected and was without authority to hear the grievances. Accordingly, we set aside the award.
A. The Arbitrator's selection and EEOC I
In June 1991, the Agency and the Union executed a nationwide collective bargaining agreement ("National Agreement"). Article 44 of the National Agreement provides for the selection of three permanent "National Arbitrators" to resolve grievances arising under the negotiated grievance procedure ("National Arbitrators").(3) Article 8 provides procedures for resolving negotiation disputes, including a provision for selecting three permanent mediator/arbitrators to decide such disputes ("Impasse Arbitrators"). Both articles require the parties to select the arbitrators from lists provided by the Federal Mediation and Conciliation Service (FMCS). In accordance with these provisions, the parties had requested and received lists of potential National Arbitrators and Impasse Arbitrators from FMCS shortly after they executed the agreement. However, neither party followed the agreement's other procedures for making final selections from the lists, and consequently the parties did not make final selections at that time. Subsequently, in February 1992, a dispute developed with respect to the selection of arbitrators.
The Agency maintained that the parties should meet and simultaneously choose both National Arbitrators and Impasse Arbitrators. The Union contended, however, that under section 7119 of the Statute, Impasse Arbitrators could not be selected without the prior approval of the Federal Service Impasses Panel (FSIP). The Union insisted that National Arbitrators be selected separately. The Agency disagreed, continuing to assert that both panels be selected at the same time.
On April 29, 1992, the Union filed an unfair labor practice (ULP) charge alleging that the Agency violated the Statute by refusing to participate in the selection of National Arbitrators. On July 21, 1992, the Authority's Washington, D.C. Regional Director dismissed the Union's charge, finding among other things that the dispute concerned questions about the interpretation of the National Agreement and was, therefore, not appropriate for resolution in the ULP forum.
In May 1992, while its ULP charge was pending, the Union unilaterally selected three National Arbitrators, including Arbitrator Lazar, from the list previously provided by FMCS. The Union informed FMCS of this action by letter dated May 20, 1992. FMCS responded on May 27, 1992, telling the Union that it would not act on what it perceived to be a "unilateral request" to appoint arbitrators. That same day, the Union notified the individual arbitrators of their selection. Two of the arbitrators declined, citing the lack of agency participation in the selection process. Arbitrator Lazar, however, agreed to serve as a National Arbitrator.
On July 22, 1992, after being informed by the Agency that it did not recognize his authority, Arbitrator Lazar scheduled a hearing for July 30, 1992, to consider the validity of his selection. The Agency notified the Arbitrator that it would not participate in the proceeding, contending that since the Union had elected to pursue the selection question through the ULP process, the Authority, not the Arbitrator, should resolve the matter.
Nonetheless, the Arbitrator conducted the hearing as scheduled, without Agency participation. The Arbitrator subsequently issued an "interim award" finding that "[w]hen the Agency abandoned or gave up its right to strike [arbitrators from the list provided by FMCS], it did so at its peril," and "was estopped from objecting to the Union's unilateral striking." Interim Award at 5. The Arbitrator concluded that he had authority to act as a National Arbitrator under the parties' agreement.
The Agency filed exceptions to the Arbitrator's Interim Award with the Authority, alleging that the Arbitrator's consideration of the case was barred under section 7116(d) of the Statute by the previously filed ULP, and that the Arbitrator was never validly selected under the National Agreement. The Authority dismissed these exceptions, without prejudice, as interlocutory. American Federation of Government Employees, National Council of EEOC Locals No. 216 and Equal Employment Opportunity Commission, 47 FLRA 525 (1993) (EEOC I). The Authority held that the Arbitrator's determination establishing himself as a National Arbitrator resolved only a threshold matter preliminary to resolution of a grievance pending in the Agency's New Orleans District Office. Id. at 531.(4)
B. The PARS Grievances
The grievances resulting in the arbitration award that we review here centered on an April 1991 Memorandum of Understanding ("MOU") between the Agency and the Union concerning the development of a new Performance Appraisal and Recognition System ("PARS"). The MOU called for the parties to engage in a collaborative effort to develop PARS. The Agency subsequently implemented PARS on April 1, 1992, amidst charges and counter-charges by each party that the other had failed to live up to its contractual and statutory responsibilities.
The Union's objections took the form of both ULP charges and grievances. The ULP charges were all dismissed by the Authority's General Counsel or withdrawn by the Union. However, three grievances filed by the Union concerning PARS matters were not resolved, and on December 8, 1992, the Union requested that these grievances be arbitrated by Arbitrator Lazar.
With the Agency declining to participate, Arbitrator Lazar heard the grievances and found that PARS had been implemented in violation of the National Agreement. The Arbitrator also confirmed his view that he had been validly selected, expressly incorporating his previous Interim Award in the award that we review in the instant proceeding.(5)
C. EEOC II and EEOC III
The Agency filed exceptions to the Arbitrator's award, including therein its arguments made in EEOC I with respect to the Arbitrator's authority.(6)
The Agency also alleged that the PARS grievances were barred under section 7116(d) of the Statute by the previously filed ULP charges concerning the Agency's alleged refusal to bargain over PARS. The Authority denied the Agency's exceptions. EEOC II, 48 FLRA at 823.
The Authority first rejected the Agency's claim that the Arbitrator's determination with respect to the merits of the PARS grievances was barred under section 7116(d) of the Statute by the Union's previously filed ULP charges. 48 FLRA at 827-30. The Authority also rejected the Agency's contention that the award was deficient because the Arbitrator was not properly chosen as a National Arbitrator under Article 44 of the National Agreement. Id. The Authority analyzed the issue as one concerning the interpretation and application of Article 44. The Authority thus applied its deferential test applicable to claims that an award "fails to draw its essence from the [agreement]." EEOC II, 48 FLRA at 830-31. The Authority found that the Agency's exception constituted mere disagreement with the Arbitrator's interpretation and application of the parties' agreement and therefore provided no basis for finding the award deficient. Id. at 831.
The Agency sought, and the Authority denied, reconsideration of EEOC II. EEOC III, 49 FLRA 7. On reconsideration, the Agency contended, inter alia, that the Authority had not addressed the Agency's arguments concerning the alleged section 7116(d) bar to the Arbitrator's Interim Award based on the Union's previously filed ULP charge; that an arbitrator cannot arbitrate his own employment; and that the Authority applied an incorrect legal standard when it analyzed the validity of the Arbitrator's selection.(7)
D. The Remand to the Authority
Following the Authority's denial of reconsideration, the Agency petitioned the D.C. Circuit for review.(8) Subsequently, the court granted the Authority's request for a voluntary remand to reconsider certain issues. Equal Employment Opportunity Commission v. FLRA, No. 94-1168 (D.C. Cir. Nov. 14, 1995), reh'g denied (Feb. 6, 1996) (EEOC v. FLRA).
III. Positions of the Parties
By order dated May 1, 1996, the Authority granted the parties an opportunity to file additional submissions in the case. Specifically, the parties were asked to address: (1) the appropriate standard of review to be applied to the Arbitrator's determination upholding his selection; (2) whether the Union's April 1992 ULP charge barred the Arbitrator's consideration of his selection; (3) the effect of resolving this issue on other related cases pending before the Authority; and (4) any other issues deemed relevant. Both the Agency and the Union responded.
A. The Agency's Position
The Agency contends that under section 7116(d), the ULP charge filed by the Union on April 29, 1992, barred Arbitrator Lazar's subsequent consideration of the validity of his own selection in his Interim Award. The Agency argues that both concerned the same issue, i.e., the Agency's refusal to participate in the selection of National Arbitrators.
The Agency further contends that arbitrators may be disqualified from arbitrating questions concerning their own continued employment because of "impermissible self-interest." Relying on American Federation of Government Employees and Social Security Administration, 29 FLRA 1568 (1987) (Member McKee dissenting in part) (SSA), the Agency maintains that such self-interest exists in this case and that the Arbitrator should be barred from ruling on his selection.
Finally, the Agency contends that the Arbitrator's determination that he was properly selected under the terms of the National Agreement is analogous to a substantive arbitrability determination, and should be subject to de novo review by the Authority, rather than the deferential standard applied by the Authority. Nonetheless, the Agency argues that under either a de novo or a deferential standard, the Arbitrator's award should be overturned.
In this regard, the Agency asserts that nothing in the parties' agreement provides for the unilateral selection of National Arbitrators. The Agency also relies on Section 44.06 of the agreement, which permits the FMCS to appoint a "Local Arbitrator" in concert with the preferences of one party, if the other party does not take part in the selection process. Based upon rules of statutory construction, the Agency argues that Section 44.06's provision for unilateral selection of Local Arbitrators, and the omission of a functionally comparable provision concerning National Arbitrators, implies that the latter may not be unilaterally selected.
B. The Union's Position
The Union asserts that section 7116(d) does not bar the Arbitrator's consideration of the validity of his own selection. The Union argues that the issues involved in the April ULP and in the proceeding before the Arbitrator were different because the ULP raised the issue of whether the employees and the Union were denied access to a full grievance procedure by the Agency's refusal to select arbitrators, whereas the matter before Arbitrator Lazar was whether his unilateral selection was valid under the parties' agreement.
The Union further argues that the proper standard of review is the more deferential "essence of the contract" standard generally employed in reviewing arbitrators' interpretations of collective bargaining agreements. It also contends that the Arbitrator's award was correct, and that the Agency is estopped from raising objections to the Arbitrator's award essentially because the Agency allegedly refused to adhere to the parties' agreement and abandoned the arbitration process. The Union did not address the impermissible self-interest issue.
IV. Analysis and Conclusions
For the reasons set forth below, we conclude that the Arbitrator's Interim Award, incorporated in the award here under review, was not barred under section 7116(d) of the Statute by the Union's previously filed ULP charge, because the issues raised in the two proceedings have not been shown to be the same. However, we also conclude that the Arbitrator's award must be set aside because of the Arbitrator's "impermissible self-interest" in its outcome, and because the Arbitrator had no authority under the parties' National Agreement to act as a National Arbitrator.
A. The Arbitrator's Interim Award Is Not Barred Under Section 7116(d) of the Statute
As relevant here, section 7116(d) provides that "issues which can be raised under a grievance procedure may, in the discretion of the aggrieved party, be raised under the grievance procedure or as an unfair labor practice under this section, but not under both procedures." Under section 7116(d), a grievance is barred by a previously-filed ULP charge only if, among other things, the issue that is the subject matter of the grievance is the same as the issue that is the subject matter of the ULP. U.S. Department of Veterans Affairs, Medical Center, North Chicago, Illinois and American Federation of Government Employees, Local 2107, 52 FLRA 387, 392 (1996) (VAMC, North Chicago) (citing U.S. Department of the Army, Army Finance and Accounting Center, Indianapolis, Indiana and American Federation of Government Employees, Local 1411, 38 FLRA 1345, 1350 (1991), review denied, AFGE Local 1411 v. FLRA, 960 F.2d 176 (D.C. Cir. 1992)) (Army Finance and Accounting Center). This test is met when both the ULP charge and the grievance are based on "the same set of factual circumstances" and "the [legal] theory advanced in support of the ULP charge and the grievance are substantially similar." Olam Southwest Air Defense Sector (TAC), Point Arena Air Force Station, Point Arena, California, 51 FLRA 797, 802 (1996) (Olam).(9)
We find that the factual circumstances upon which the April ULP was based differed from the factual circumstances of the grievance proceeding related to the Arbitrator's Interim Award. Additionally, the legal theories advanced in the two proceedings have not been shown to be substantially similar. For these reasons, we reject the agency's assertion that the issues raised in the two proceedings were the same. As such, section 7116(d) does not bar the Interim Award.
As to factual circumstances, the April ULP arose from the Agency's refusal to participate in the process of selecting National Arbitrators, by striking names from the list provided by FMCS. In contrast, the set of factual circumstances from which the interim proceeding before the Arbitrator arose included the Union's unilateral striking of arbitrator names from the FMCS list, the Union's notification to the Arbitrator of his purported appointment as National Arbitrator, and the Union's referral of at least one pending grievance (the New Orleans grievance) to the Arbitrator to arbitrate. All of these circumstances occurred after the time the Union filed the April ULP, and thus could not have been part of its factual underpinnings. These additional factual circumstances figured directly in the Arbitrator's Interim Award, in which he ruled not only on the propriety of the Agency's actions under the parties' contract, but also on the validity of the arbitrator selection process the Union elected to pursue in the face of the Agency's refusal to strike.
As to the legal theories involved, it has not been demonstrated that the legal theories advanced in connection with the Arbitrator's Interim Award were the same as the legal theories that underlay the April ULP. The Union's April ULP advanced two legal theories: (1) that the Agency committed a ULP in violation of the Statute when it refused to participate in the striking of arbitrators, because that refusal deprived employees of a statutory right to pursue grievances; and (2) that the Agency committed a ULP in violation of the Statute when it refused to participate in the striking of arbitrators, because the Agency's refusal constituted a repudiation of the parties' negotiated agreement.
With respect to the Interim Award, its text is the best indicator available of what the theories advanced in connection with the award were, as the prehearing submissions in the record do not address the matter of legal theories, and the record does not include any hearing transcript. The principal legal theory reflected in the Arbitrator's Interim Award was that the Arbitrator's selection was valid, even though it had been made unilaterally by the Union, because despite the Agency's refusal to strike arbitrators' names, the Union's "right and power" to strike remained "intact." According to the Interim Award, the Agency's abandonment of its right to strike simply estopped it from objecting to the Union's striking of names, as to which the Union had an independent contractual right. Interim Award at 5.
This legal theory is not only different from the theories involved in the April ULP -- it is actually incompatible with one of those theories. In the April ULP, on the one hand, the Union pursued the theory that the Agency's actions deprived employees of an effective grievance procedure. In the proceeding before the Arbitrator, on the other hand, the Union pursued the theory that the Agency's actions could not stand in the way of the establishment of a functioning grievance and arbitration procedure.
For these reasons, we conclude that the Arbitrator's Interim Award is not barred under section 7116(d) of the Statute.
B. We Set Aside the Arbitrator's Award Because of the Arbitrator's "Impermissible Self-Interest"
In his Interim Award, the Arbitrator specifically addressed his own appointment to the position of National Arbitrator. Although the issue has been only rarely litigated, the Authority has held that where a "grievance directly concerns the arbitrator's own employment for what may be an extended period of time, impermissible self-interest requires [the arbitrator's] disqualification [from that case]." SSA, 29 FLRA at 1578 (quoting Pitta v. Hotel Association of New York City, Inc., 806 F.2d 419, 423 (2d Cir. 1986) (Pitta)). As the Authority held in SSA, allowing an arbitrator to rule on his or her own contested extended appointment "create[s] a risk of unfairness so inconsistent with the basic principles of justice that the arbitration award must be automatically vacated." 29 FLRA at 1578 (quoting Pitta, 806 F.2d at 423-24).(10)
Like SSA and Pitta, this case concerns a contested appointment that would be for "an extended period of time."(11) The issue that the Arbitrator ruled upon was the validity of his own selection as a "National Arbitrator" under the parties' agreement. Article 44 of that agreement provides for three such National Arbitrators to serve in a "permanent capacity." Under the National Agreement, National Arbitrators serve, on a rotating basis, for the term of the contract.
Consistent with SSA, we find that impermissible self- interest disqualified the Arbitrator from ruling on his own extended appointment. However, under the circumstances of this case, we conclude that directing the parties to refer this matter to another arbitrator would not be an appropriate remedy.
As discussed in section IV.C., below, we hold that under the parties' agreement, an arbitrator's award on the validity of the selection of National Arbitrators is subject to de novo review by the Authority. Were we to refer the matter to another arbitrator and review was sought, we would thereafter be reviewing the second arbitrator's award de novo. As such, it is not clear that a useful purpose would be served by an additional arbitral proceeding. Rather, such a course of action would appear merely to extend what has already become a protracted dispute. Accordingly, as the case is before us now, we will resolve it without further delay. Cf. Computer Professionals for Social Responsibility v. U.S. Secret Service, 72 F.3d 897, 903 (D.C. Cir. 1996) ("in the interest of judicial economy," where matter reviewed de novo, appellate court made final determination instead of remanding to lower court); National Coal Association v. Lujan, 979 F.2d 1548, 1549 (D.C. Cir. 1992) (to avoid "unwarranted protraction," court declined to remand case to lower court). As set forth below, we conclude that the Arbitrator was not validly selected under the parties' agreement.
C. The Arbitrator's Award Is Deficient Because the Arbitrator Had No Authority under the National Agreement
In reviewing the Arbitrator's determination that he was properly selected under the National Agreement, we must first determine the proper standard to employ. As discussed below, we find that a de novo standard is appropriate. Upon such review, we find that the National Agreement did not authorize the Union's unilateral selection of Arbitrator Lazar and that accordingly, he was without authority to decide the PARS grievances.
1. Standard of Review
In the Interim Award, the Arbitrator interpreted Article 44 of the National Agreement, and concluded that under its terms, he was properly selected as a National Arbitrator. In reviewing contract interpretations by arbitrators, the Authority typically applies a deferential "essence" standard of review (analyzing whether an award draws its essence from the parties' agreement). Nonetheless, the Agency argues that the Arbitrator's contract interpretations in this case relating to his selection should be reviewed de novo because, like "substantive arbitrability" determinations, they involve a determination with respect to the Arbitrator's authority to hear the grievance.
The Authority has discussed the issue of de novo review of arbitrator contract interpretations in one previous decision. In that decision, the Authority acknowledged that "in the private sector . . . Federal courts review substantive arbitrability determinations by arbitrators de novo, unless the parties have waived the right to a judicial determination independent of the arbitrator's determination." U.S. Department of Health and Human Services, Social Security Administration, Kansas City, Missouri and American Federation of Government Employees, Local 1336, 51 FLRA 725, 731 n.5 (1996) (SSA, Kansas City). However, the Authority did not reach the standard of review question in that case, finding that the arbitrator's award was deficient even under the deferential "essence" standard.
The Agency's claim that we should review de novo the Arbitrator's determination that he was properly selected under the National Agreement does not present a question of substantive arbitrability.(12) That is, the Agency has not asserted that an arbitrator would be without jurisdiction to consider this issue. Rather, the Agency challenges the basis for deferring to the Arbitrator's determination on the selection question, asking instead for the Authority's independent review of the Arbitrator's resolution of the issue.
As discussed below, even though the issue raised by the Agency is not one of substantive arbitrability, we find instructive the underlying principles employed in private sector cases dealing with the standard of review issue in substantive arbitrability cases. Analogous to substantive arbitrability cases, answering the standard of review question here requires deciding whether the arbitrator or the reviewing forum should make the primary determination on the underlying question -- whether the Arbitrator's selection was valid under the agreement.
a. De Novo Review Is Appropriate Where the Parties Have Not Granted the Arbitrator the Primary Power to Decide a Matter
De novo review of certain types of arbitral contract interpretations is firmly embedded in the private sector. The determination whether to use the standard rests on what the parties have agreed to in their collective bargaining agreement relating to their contractual grievance and arbitration procedure. The Supreme Court described this principle as follows: "[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648 (1986) (AT & T) (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960) (Warrior & Gulf)).
To decide whether to apply a de novo standard, or the deferential "essence" standard, to a particular matter, the courts examine how the parties wanted the matter resolved. As the Supreme Court described the process, the courts ask "who" -- court or arbitrator -- "has the primary power to decide" the matter. First Options of Chicago, Inc. v. Kaplan, 115 S. Ct. 1920, 1923 (1995) (Kaplan)(13) The Supreme Court determined that "the question 'who has the primary power to decide [a matter]' turns upon what the parties agreed about that matter." Kaplan, 115 S. Ct. at 1923. If the parties agreed to submit the particular matter to arbitration, "then the court's standard for reviewing the arbitrator's decision about that matter should not differ from the standard courts apply when they review any other matter that parties have agreed to arbitrate"--that is, the deferential "essence" standard. Id. (citing AT & T and Warrior & Gulf). In such a case, "where the party has agreed to arbitrate, . . . [t]he party still can ask a court to review the arbitrator's decision, but the court will set that decision aside only in very unusual circumstances." Id.
If, on the other hand, the Court explained, it was not established that a party agreed to submit a question to arbitration, "then the court should decide that question just as it would decide any other question that the parties did not submit to arbitration, namely independently" -- employing a de novo standard. Id. at 1924. Thus, "a party who has not agreed to arbitrate will normally have a right to a court's decision about the merits of its dispute . . . ." Id. at 1923.
In AT & T, the Court established a strict standard for determining if a party agreed to submit a particular question to arbitration (leading to deferential review by the courts), or did not (leading to de novo review). Discussing the specific question of who should determine arbitrability, the Court stated in AT & T that "[u]nless the parties clearly and unmistakably provide otherwise, the question whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator." AT & T, 475 U.S. at 649 (emphasis added).
The Court in Kaplan clarified the reason for establishing a presumption against resolving such "who" questions in favor of arbitral determination. Characterizing such questions as "rather arcane," the Court explained that "[a] party often might not focus upon that question or upon the significance of having arbitrators decide the scope of their own powers." Kaplan, 115 S. Ct. at 1924-25 (citing Cox, Reflections Upon Labor Arbitration, 72 Harv. L. Rev. 1482, 1508-09 (1959)). The Court thus held that a contract's silence or ambiguity with respect to the issue of "who" was granted primary power to decide such questions should be interpreted in favor of judicial, rather than arbitral power.
We find the Court's analysis in Kaplan and AT & T instructive in answering the standard of review question here. Like the question in Kaplan and AT & T concerning who should have the primary power to decide substantive arbitrability issues, the question in this case concerning who should have the primary power to decide the legitimacy of a National Arbitrator's selection, relates to the scope of the arbitrator's own powers. As the Court recognized in Kaplan, it is reasonable to assume that a party entering into a collective bargaining agreement might not focus upon the significance of granting arbitrators the primary power to decide the scope of their own authority. See Kaplan, 115 S. Ct. at 1925. This characterization is consistent with the rarity of such cases in Authority case law. Accordingly, unless there is clear and unmistakable evidence in this case that the parties intended that an arbitrator would have the primary power to decide the validity of a contested National Arbitrator selection, we will review the matter de novo.(14)
b. De Novo Review Is Appropriate in This Case
Applying the principles enunciated in Kaplan and AT & T, and examining the relevant provisions of the National Agreement, we find no clear and unmistakable evidence that National Arbitrator selection issues were to be resolved primarily in arbitration.(15) Thus, de novo review is appropriate in this case.
First, neither the section of the parties' agreement dealing with National Arbitrator selection (Section 44.03), nor any other section of the agreement's "Arbitration" article (Article 44), addresses "who" should decide questions concerning the validity of a National Arbitrator's selection.(16) Indeed, the agreement's Arbitration article does not even address procedures for dealing with the failure or refusal of a party to participate in the striking process prescribed for selecting National Arbitrators.(17) The agreement is, thus, silent on the issue.
Further, the section dealing with National Arbitrator selection contrasts in significant respects with the section of the contract dealing with the resolution of arbitrability disputes and Local Arbitrator selection. Unlike the provision concerning National Arbitrator selection, the arbitrability section (Section 44.02(c)) specifically addresses the question of "who" should resolve arbitrability disputes. Under that section, arbitrability disputes "shall be referred to the Arbitrator as a threshold issue and shall initially be decided by the Arbitrator."(18)
The agreement's provision concerning National Arbitrator selection also contrasts with the section concerning selection of "Local Arbitrators." The latter, Section 44.06, establishes a striking process to select Local Arbitrators that is somewhat similar to the striking process established for selecting National Arbitrators. Compare Section 44.03 with Section 44.06. However, unlike the provision concerning National Arbitrators, the section controlling Local Arbitrator selection also explicitly anticipates and defines the consequences of a party's refusal or failure to participate in the process, stating:
If either Party refuses to act under this selection procedure or unduly delays the selection process, . . . the other Party shall return its list to the FMCS indicating its first (1st), second (2nd) and third (3rd) preferences of an Arbitrator, and it is agreed that the FMCS shall be empowered to appoint the available Arbitrator in accordance with the preference indicated.
National Agreement, Section 44.06. Thus, although the parties expressly provided for resolution of disputes concerning the selection of Local Arbitrators, there is nothing that indicates that the parties gave any consideration to resolution of similar matters with respect to National Arbitrators.
The questions unanswered in the provisions of the parties' agreement specifically concerning arbitrator selection are also not answered in other provisions of the agreement bearing on grievance/arbitration issues. For example, Article 43 of the National Agreement, containing the parties' grievance procedure, fails to clearly and unmistakably answer the question "who" should decide National Arbitrator selection issues. Among Article 43's provisions are a broad scope grievance/arbitration procedure (Section 43.02) and a provision that "grievability/arbitrability questions will be decided by an arbitrator" (Section 43.03). However, a broad scope arbitration clause by itself is insufficient to provide clear and unmistakable evidence concerning who has the primary power to decide a particular matter. Cf. AT & T, 475 U.S. at 644-45, 651 ("It was for the court, not the arbitrator, to decide in the first instance whether the dispute was to be resolved through arbitration," notwithstanding that the parties' agreement contained a broad arbitration clause); Hinkley, 76 F.3d at 164-65 (presence of "open-ended arbitration clause" did not constitute unmistakable evidence of intent that arbitrator was to decide arbitrability issue). But cf. Carpenters, 94 F.3d at 1311 ("[A] broad arbitration clause -- even one that does not specifically mention who decides arbitrability -- is sufficient to grant the arbitrator authority to decide his or her own jurisdiction.").(19) Further, as to Section 43.03, even though arbitrability is to be decided by an arbitrator, nothing indicates that the distinct question of arbitrator selection is to be decided primarily through arbitration.
In short, the fact that the agreement expressly deals in several contexts with questions concerning "who" should decide a particular issue, but does not deal with "who" should decide National Arbitrator selection issues, weighs against a finding of clear and unmistakable evidence that the parties agreed that an arbitrator was to have the primary power to decide issues of the latter type. Accordingly, we will review the matter of the validity of the Arbitrator's selection de novo.(20)
2. The Arbitrator Was Not Properly Selected Under the Terms of the National Agreement
Having determined that our review is de novo, we are persuaded that we should overturn the Arbitrator's determination that he was validly selected. There are two principal bases upon which we reach this conclusion. First, we find that one of the Arbitrator's key determinations, concerning the meaning of Section 44.03 of the parties' agreement, is contradicted by the section's language. Second, we find that a comparison of Section 44.03 with Section 44.06, the agreement's Local Arbitrator selection provision, indicates that National Arbitrators were not to be selected unilaterally.
As to the first matter, the language of Section 44.03 does not support the Arbitrator's determination that "[t]he duty to strike analytically was not only a right to strike, but also constituted a legal power. The Agency's refusal to exercise its right and power did not strip the Union's right and power." Interim Award at 5.(21) Section 44.03 merely provides in this regard that the parties will strike arbitrator names "sequentially." Taking "sequentially" to mean "following each other in sequence," see Webster's Ninth New Collegiate Dictionary, the term implies the actions of both parties. From this, the most direct inference is that whatever "right and power" Section 44.03 establishes in each party, that "right and power" may only be exercised jointly. The Arbitrator's contrary interpretation, that the section gave the Union an independent "right and power," has no foundation.
The second basis for concluding that the Arbitrator was not validly selected rests on a consideration of the contrasting provisions in Section 44.03 and Section 44.06, discussed above. Section 44.06 explicitly provides for the unilateral selection of Local Arbitrators by a party where the other party refuses to participate, or unduly delays participating, in the striking process. The existence of express provisions for unilateral selection of Local Arbitrators in circumstances similar to those that generated this case strongly implies that the omission of comparable language concerning the selection of National Arbitrators was intentional. Cf., e.g., Russello v. United States, 464 U.S. 16, 23 (1983) (Congress' inclusion of particular language in one section of a statute and omission of it from another implies an intent to deal with the two sections disparately). Therefore, on this basis as well, we conclude that the parties' agreement reflects an intent that National Arbitrators would not be selected unilaterally.(22)
In sum, based upon the language of the parties' agreement, we conclude on de novo review that the Union's unilateral selection of the Arbitrator was unauthorized, and thus overturn the Arbitrator's award.
The Arbitrator's award is set aside.
Article 43.00 Negotiated Grievance Procedure
. . . .
Section 43.02 Scope
(a) A grievance under these procedures shall mean a complaint:
(1) by any employee concerning any matter relating to the employment of the employee;
(2) by the UNION concerning any matter relating to the employment of any employee; or
(3) by any employee or the UNION concerning:
(A) the effect or interpretation or a claim of breach of this Agreement; and/or
(B) any claimed violation, misinterpretation or misapplication of any law, rule, or regulation affecting conditions of employment.
. . . .
Section 43.03 Questions of Grievability
Questions of grievability or arbitrability based on technical or procedural aspects of a grievance shall be deemed waived unless raised before the conclusion of Step 3 of the procedure. Questions of grievability or arbitrability based upon an Arbitrator's authority to rule on or hear an issue may be raised at any time. In the event the EMPLOYER should declare a grievance nongrievable or nonarbitrable, all disputes of grievability or arbitrability shall be referred to arbitration as a threshold issue. The threshold issue may be decided on the basis of written submissions and it must be decided first. In the event the arbitrator decides a matter is grievable or arbitrable, it shall be referred back to Step 3 for a decision on the merits. No matter shall proceed to arbitration on the merits without a Step 3 merits decision.
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Article 44.00 Arbitration
. . . .
Section 44.02 National Arbitrators In order to facilitate the expeditious handling of arbitrations, the Parties agree to establish and maintain three permanent National Arbitrators who will be used on a rotating basis subject to their availability.
(a) The duties of the National Arbitrator shall be to hear and issue final and binding decisions on all grievances referred to him/her for arbitration in accordance with the procedures established herein and to review upon appeal, a Local Arbitrator's decision and award for consistency with the provision of the Agreement and the intent of the Parties, and to modify such decisions/awards when appropriate;
. . . .
(c) All disputes as to the arbitrability or grievability of a matter which were properly raised in accordance with Section 43.03 of the negotiated grievance procedures shall be referred to the Arbitrator as a threshold issue and shall initially be decided by the Arbitrator. Such issues shall be resolved in accordance with Section 43.03.
Section 44.03 Selection of the National Arbitrators
The National Arbitrators shall be selected from a panel of 15 Arbitrators requested from the Federal Mediation and Conciliation Service (FMCS) and will serve in a permanent capacity. The panel shall be requested by the Parties within 14 calendar days of the signing of this Agreement. The Parties shall strike Arbitrators sequentially. If 12 Arbitrators have been stricken and the three (3) remaining Arbitrators are unacceptable to either Party, an additional panel of six (6) names shall be immediately requested from FMCS. Upon receipt of the additional panel, the Parties shall continue striking until there are only three (3) Arbitrators. The process of striking Arbitrators shall commence no later than 15 calendar days after the receipt of the first panel. The procedure shall be concluded no later than 14 calendar days thereafter. Alternatively, the Parties may select a National Arbitrator who is acceptable to both Parties.
. . . .
Section 44.05 Local Arbitrators
In order to facilitate the expeditious handling of arbitrations, the Parties agree that arbitrations may be held at the local level. Local Arbitrators shall issue awards which may be appealed to a National Arbitrator. The provisions of Section 44.02 shall otherwise apply in all respects to Local Arbitrators.
Section 44.06 Selection of the Local Arbitrator
When Local arbitration is invoked, the UNION shall, within five (5) calendar days, request the FMCS to submit a list of seven (7) Arbitrators to the UNION and the EMPLOYER's Labor Management Relations Divisions. Within five (5) calendar days after receipt of the list, the Parties shall select an Arbitrator by each alternatively striking off one (1) name from the list and the name remaining on said list shall be the Local Arbitrator.
If either Party refuses to act under this selection procedure or unduly delays the selection process, unless time limits have been extended by mutual agreement, the other Party shall return its list to the FMCS indicating the first (1st), second (2nd), and third (3rd) preferences of an Arbitrator, and it is agreed that the FMCS shall be empowered to appoint the available Arbitrator in accordance with the preference indicated.
(If blank, the decision does not have footnotes.)
1. The case was remanded without decision at the Authority's request. Equal Employment Opportunity Commission v. FLRA (EEOC v. FLRA), No. 94-1168 (D.C. Cir. Nov. 14, 1995), reh'g denied (Feb. 6, 1996).
2. By order dated May 1, 1996, the Authority provided the parties an opportunity to file additional submissions in the case. Both the Agency and the Union responded.
3. As discussed infra, Article 44 also provides for the selection of "Local Arbitrators," whose decisions are appealable to a National Arbitrator.
4. We also issue today our decision in the ULP case concerning the Union's New Orleans District grievance, Equal Employment Opportunity Commission, 53 FLRA No. 54 (1997).
5. Thus, the award we review here addresses not only the merits of the PARS grievances, but also the threshold issue of Lazar's authority to hear the grievances. Because the Arbitrator's specific determination with respect to his authority was set forth in the earlier "Interim Award," we will continue to refer to that portion of the award as the "Interim Award."
6. The PARS hearing took place while the exceptions to the Arbitrator's Interim Award were pending before the Authority. EEOC I issued on April 30, 1993, one day after the Agency filed exceptions to the Arbitrator's award that we review in this proceeding.
7. These are the issues we address in this decision. The Agency also contended that the Arbitrator was biased, and reiterated its arguments that the PARS grievances were barred by previously filed ULPs. In view of our disposition of the threshold issue of the Arbitrator's authority, these remaining issues are moot.
8. The proceedings before the D.C. Circuit were held in abeyance while the Agency and the Union pursued a settlement of the underlying dispute. Although the parties resolved a number of the issues over which they had disagreed, there were also some matters that they did not resolve.
9. The other elements of section 7116(d) are: whether the issue was earlier raised under the ULP procedures; and whether the selection of the ULP procedures was in the discretion of the aggrieved party. VAMC, North Chicago, 52 FLRA at 392. Because we find that the ULP and the grievances did not concern the same issue, we need not address whether these additional elements would be satisfied.
10. The Authority emphasized that an arbitrator need not recuse himself or herself from every decision that might have a bearing on his or her compensation, such as a decision to continue a hearing for an additional day when circumstances warranted. SSA, 29 FLRA at 1578-79 (citing Pitta, 806 F.2d at 423-24). Both the Authority and the court limited their holdings to cases where continued employment was at issue. 806 F.2d at 424. The Authority also emphasized that it was not finding that the arbitrator was biased, but only that in this unusual circumstance, the risk of unfairness required disqualification. SSA, 29 FLRA at 1579. Similarly, no finding is made with respect to the Arbitrator's actual bias in this case.
11. In Pitta, the arbitrator's status as a "permanent umpire" was at stake. 806 F.2d at 420-21. The arbitrator in SSA ruled that all grievances involving the application of certain (official time) provisions of the parties' agreement were required to be submitted to him during the term of the parties' contract.
12. Substantive arbitrability is a question of subject matter jurisdiction: whether the parties have agreed to arbitrate a particular category or type of dispute. Elkouri & Elkouri, How Arbitration Works 301 (Marlin M. Volz & Edward P. Goggin eds., 5th ed. 1997) ("Elkouri & Elkouri").
13. Under section 7122 of the Statute, it is the Authority, not the courts, that reviews arbitration awards. Accordingly, when adapting the private sector precedent discussed in this section to the federal sector, the Authority stands in the position of the reviewing courts.
14. Kaplan was a commercial arbitration case arising under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. However, it has been applied in a collective bargaining context. Local 744, International Brotherhood of Teamsters v. Hinckley & Schmitt, Inc., 76 F.3d 162, 165 (7th Cir. 1996) (Hinckley). But see United Brotherhood of Carpenters, Local No. 1780 v. Desert Palace, Inc., 94 F.3d 1308, 1311 (9th Cir. 1996) (Carpenters) (citing differences in commercial and labor arbitration, court declined to construe the parties' silence or ambiguity against arbitral determination of questions of arbitrability).
15. Relevant provisions of Article 44, "Arbitration" and Article 43, "Negotiated Grievance Procedure" are attached as an Appendix to this decision.
16. Article 44, sec. 44.03, entitled "Selection of the National Arbitrators," sets forth the parties' agreement on that issue. It provides, among other things, that "[t]he Parties shall strike Arbitrators sequentially" from a list provided by FMCS.
17. The agreement's provision for selecting Impasse Arbitrators, Section 8.08, establishes selection procedures that are essentially identical to those established by Section 44.03 for selecting National Arbitrators. Thus, comparison of Sections 8.08 and 44.03 is not helpful.
18. This is, of course, consistent with section 7121(a)(1) of the Statute.
19. We are not persuaded that the Carpenters court's rationale should be applied here. Among other things, the selection dispute at issue here is unusual, and in this respect can readily be distinguished from the garden variety arbitrability determinations -- whether a particular subject matter was arbitrable under the parties' agreement -- with which the Carpenters court was dealing.
20. We emphasize, however, that our decision finding de novo review appropriate in this case is limited to its specific facts, and is not intended to raise questions concerning the appropriate standard of review for substantive arbitrability determinations in the federal sector. As indicated in the text above, the Authority has applied the deferential "essence" standard to such questions. Nothing in this decision indicates a need to reevaluate this aspect of Authority precedent, especially in view of the presence in the Statute of a specific provision, section 7121(a)(1), requiring that "any collective bargaining agreement shall provide procedures for the settlement of . . . questions of arbitrability."
21. When the Authority interprets contracts, it looks to the pertinent contractual language and to other relevant record evidence, such as the parties' bargaining history. Cf. U.S. Department of Justice, Immigration and Naturalization Service, Washington, D.C., 51 FLRA 1274, 1277 (1996) (determining whether certain changes in working conditions made by an agency were covered by terms of the parties' agreement). In the instant case, the record contains only the contract's language.
22. The relationship between National and Local Arbitrators suggests a reason the parties may have chosen to bar unilateral selection of National Arbitrators, but not Local Arbitrators. National Arbitrators exercise more significant influence than do Local Arbitrators, since the decisions of Local Arbitrators may be appealed to National Arbitrators. See Section 44.05. The availability of arbitral review of the decisions of Local Arbitrators arguably made the process by which they are selected less significant to the parties than the selection process for National Arbitrators.