54:0189(24)NG - - Columbia Power Trades Council & DOE, Bonneville Power Administration, Portland, OR - - 1998 FLRAdec NG - - v54 p189



[ v54 p189 ]
54:0189(24)NG
The decision of the Authority follows:


54 FLRA No. 24

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

COLUMBIA POWER TRADES COUNCIL

(Union)

and

U.S. DEPARTMENT OF ENERGY

BONNEVILLE POWER ADMINISTRATION

PORTLAND, OREGON

(Agency)

0-NG-2261

_____

DECISION AND ORDER ON A NEGOTIABILITY ISSUE

May 15, 1998

_____

Before the Authority: Phyllis N. Segal, Chair; Donald S.

Wasserman and Dale Cabaniss, Members.(1)

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). It concerns the negotiability of one proposal pertaining to a pay adjustment for employees who are authorized to negotiate over pay and pay practices consistent with section 9(b) of the Government Employees Prevailing Rate Systems Act of 1972 (PRSA), 5 U.S.C. § 5343 note (hereinafter section 9(b)), and section 704 of the Civil Service Reform Act (CSRA) (hereinafter section 704).(2)

For the reasons set forth below, we find that the proposal is within the duty to bargain.

II. The Proposal (3)

After the general wage increase, BPA shall grant all bargaining unit positions an additional pay increase based on a jointly conducted fringe benefit survey of the major utilities in BPA's territory. The additional pay increase shall be equivalent or substantially equivalent to the overall percentage difference between the value of the surveyed benefits for BPA employees and the average value of the same benefits provided by the surveyed utilities.

III. Positions of the Parties

A. Agency

The Agency's arguments that the proposal is outside the duty to bargain are based solely on an application of section 704 and not the Statute. Two arguments are made, citing International Brotherhood of Electrical Workers, Local 1245 and U.S. Department of the Interior, Bureau of Reclamation, Mid-Pacific Regional Office, Sacramento, California, 43 FLRA 1155 (1992) (Mid-Pacific Regional Office). First, the Agency contends that the proposal "does not address a topic that was the subject of negotiation prior to August 19, 1972" and that the Union failed to provide evidence of such negotiation. Statement of Position at 3. The Agency maintains that, to be consistent with section 704(a), the Union would have to demonstrate that "the specific pay practice of boosting wages to balance deficiencies in the perceived value of benefits was negotiated prior to August 19, 1972." Id. at 5. Arguments that the parties had negotiated wages prior to 1972 or had negotiated "a total compensation approach" would not satisfy this requirement. Id.

Second, the Agency contends that the Union has not demonstrated that the subject of the proposal is in accordance with prevailing rates and practices. The Agency adds that its own survey of Pacific Northwest utilities that the parties "historically use when comparing industry wages, pay practices, and other conditions of employment . . . indicate[s] an absence of any [utility showing] a pay practice of boosting wages to balance below-market values in their benefits programs." Id. at 6.

B. Union

The Union's arguments also are predicated solely on an application of section 704. The Union states that it is undisputed that its proposal involves a "pay practice" within the meaning of section 704(b). The Union also claims that the proposal involves a matter that was the subject of negotiations prior to August 19, 1972, and submits documentary evidence in support of this claim. The Union states that, prior to 1972, it and the Agency regularly negotiated "wage increase proposals" that were designed to raise unit employees' total compensation to levels equal to or closer to the average "total compensation" prevailing in the local utility industry. Response at 3. The Union further states that the parties viewed, and the prevailing industry practice was to view, wages and fringe benefits "as inextricably linked components of total compensation, and not as separate and distinct subjects for negotiation." Id. (Footnote omitted).

The Union also claims that its proposal has a place in current industry practices. The Union maintains that the intent and function of its proposal is to increase wages to account for a deficiency in the value of the fringe benefits provided to employees and that five of the eight utilities the parties survey "consider wages and fringe benefits as linked components of compensation."(4) Id. at 6 (footnote omitted). The Union adds that the Agency's actions in conducting an industry survey of fringe benefits refutes its position that the proposal "has no place in the industry." Id. at 7. Finally, the Union asserts that, unlike Mid-Pacific Regional Office, in which the union failed to show that its proposal had a place in the industry, the Union has demonstrated that the survey area "employ[s] a practice of adjusting pay based on comparative levels of total compensation." Response at 7.

IV. Analysis and Conclusions

A. Meaning of the Proposal

By its terms, the proposal would require the Agency to grant bargaining unit employees a wage increase in addition to the general wage increase. The amount of the additional wage increase would be determined by an industry survey and would be equivalent, or substantially equivalent, to the overall percentage difference between the value of the surveyed benefits for the Agency's employees and the average value of the same benefits provided by the surveyed utilities. Although the proposal does not further describe the method by which the percentage difference would translate into a dollar amount, the absence of any explanation is not critical to our inquiry as to whether the proposal is within the duty to bargain. According to the Union, the intent and function of its proposal is to increase wages to account for a deficiency in the value of the fringe benefits provided to employees. As the Union's explanation is consistent with the wording of the proposal, we adopt it. See American Federation of Government Employees, Local 1900 and U.S. Department of the Army, Headquarters, Forces Command, Fort McPherson, Georgia, 51 FLRA 133, 138-39 (1995). We also note that the intent and function of the proposal is consistent with the Agency's view of it as "boosting wages to balance deficiencies in the perceived value of benefits . . . ." Statement of Position at 5.

In addressing the meaning of the proposal, we are aware that both parties have referred to it as involving "total compensation." Based on the language of the proposal and the parties' contentions, it is clear to us that the proposal is a process to "offset,"(5) or balance wages and fringe benefits in arriving at the level of total compensation for unit employees. Specifically, the proposal would increase wages to account for a shortfall in the value of fringe benefits.(6)

B. Analytic Framework to Be Applied in Determining Whether the Proposal Is Within the Duty to Bargain

Section 704 of the CSRA provides generally that those terms and conditions of employment and other employment benefits, with respect to prevailing rate employees to whom section 9(b) of the PRSA applies and which were the subject of negotiations in accordance with prevailing rates and practices prior to August 19, 1972 (hereinafter pre-1972), shall be negotiated on and after October 13, 1978, in accordance with the provisions of section 9(b), without regard to the provisions of the Statute. See National Federation of Federal Employees, Local 1418 and United States Information Agency, Voice of America and American Federation of Government Employees, Local 1812, 49 FLRA 1262, 1264 (1994) (VOA). The legislative history of section 704 makes it clear that section 704(a) "may not be construed to nullify, curtail, or otherwise impair the right or duty of any party to negotiate for the renewal, extension, modification, or improvements of benefits negotiated." Conf. Rep. No. 1717, 95th Cong. 2d Sess. 159 (1978), reprinted in Legislative History of the Federal Service Labor-Management Relations Statute of 1978, Committee Print No. 95-1717 at 827 (1979).

In American Federation of Government Employees, Local 3062 and U.S. Department of the Interior, National Park Service, Lake Mead National Recreation Area, Boulder City, Nevada, 51 FLRA 229 (1995) (Boulder City), the Authority clarified the framework for analyzing cases that arise under section 704. In such cases, both the Statute, in the first instance, and section 704, thereafter, are relevant in determining whether a disputed proposal is within the duty to bargain. However, where there is apparent agreement between the parties that a proposal is outside the duty to bargain under the Statute, and the parties' arguments go only to section 704, the Authority examines only the elements of section 704, including section 9(b), which is expressly incorporated therein.

1. Analysis Under Section 9(b)(2)

Section 9(b)(2) of the PRSA expressly authorizes negotiations for the renewal, extension, modification, or improvement of provisions of a contract that were in effect prior to August 19, 1972. That section does not contemplate the negotiation of new terms and conditions of employment. As stated above, the legislative history of section 704 makes clear that it was not intended to nullify the rights of parties to negotiate the extension, modification, or improvements of benefits that were negotiated pre-1972.

The terms "extension," "modification," and "improvement" are not defined in section 9(b)(2) or the legislative history of the PRSA. In the absence of statutory definitions, it is appropriate to refer to the normally accepted meanings of terms as reflected in the dictionary. E.g., National Treasury Employees Union and U.S. Department of Commerce, Patent and Trademark Office, 52 FLRA 1265, 1283-84 (1997). As relevant here, the dictionary provides the following as examples of "extension": "lengthening, furthering, developing, . . . expansion, enlargement, augmentation, increase." The dictionary defines "modification" as "the act or action of changing something without fundamentally altering it"; and defines "improvement" to mean "the enhancement or augmentation of value or quality; an increasing of profitableness, excellence, or desirability." Webster's Third New International Dictionary (1986) (unabridged).

Although the precise contours of section 9(b)(2) have not been examined or identified by the Authority or the courts, the Authority's application of this section in specific bargaining contexts is instructive. For example, in Boulder City, 51 FLRA at 241-42, proposals that increased overtime rates and extended overtime pay to additional situations were found to constitute improvements and extensions to matters that had been negotiated pre-1972. In VOA, 49 FLRA at 1311-12, the Authority found that a section of a proposal that defined the work of employees to include duties in broadcasting studios that did not exist in 1972, merely modified and improved upon a specific subject, namely, jurisdiction over the technical functions in the agency's studios, that had been negotiated pre-1972. Additionally, in Mid-Pacific Regional Office, 43 FLRA at 1160, the Authority found that a proposal establishing a specific time limit on the amount of work outside an employee's classification that the employee could be required to perform, constituted a modification or improvement of a contractual provision that had been negotiated pre-1972, but that did not specify a particular time limit. In these cases, the proposals were deemed to be within the duty to bargain because they extended the terms of previously negotiated provisions to include additional or changed circumstances, provided greater specificity for previously negotiated terms, or increased existing benefits.

2. Analysis Under Section 704(a)

Determining whether section 704(a) applies to preserve bargaining entails a three-part inquiry: (1) Are the unit employees Government prevailing rate employees to whom section 9(b) applies; (2) Does the proposal in dispute pertain to "terms and conditions of employment and other employment benefits" within the meaning of section 704(a); and (3) Does the proposal concern a matter that was a "subject of negotiation" in accordance with prevailing rates and practices prior to August 19, 1972.

More particularly with regard to the third criterion, which is relevant to this case, the Authority has adopted the view that section 704(a) authorizes negotiations only over specific matters that were the subject of negotiations prior to August 19, 1972. The subject of a collective bargaining proposal is the specific term and condition of employment or other employment benefit that the proposal addresses. The Authority reached this decision in VOA, 49 FLRA at 1290, a decision on remand from the Court of Appeals for the District of Columbia Circuit in U.S. Information Agency v. FLRA, 960 F.2d 165 (D.C. Cir. 1992) (USIA v. FLRA). In USIA v. FLRA, the court instructed the Authority to consider other circuit court decisions in addressing the "thorny interpretive question of how squarely a current proposal must fit within the corners of a pre-1972 subject of negotiation for the former to be grandfathered by § 704(a)." USIA v. FLRA, 960 F.2d at 169.

The decisions to which the D.C. Circuit directed the Authority's attention were U.S. Department of the Interior, Bureau of Reclamation, Rio Grande Project v. FLRA, 908 F.2d 570 (10th Cir. 1990) (Rio Grande v. FLRA) and U.S. Department of Interior, Bureau of Indian Affairs v. FLRA, 887 F.2d 172, 176 (9th Cir. 1989) (BIA v. FLRA). In the former case, the Tenth Circuit reversed the Authority's conclusion that Sunday premium pay, which had not been a subject of pre-1972 bargaining, was within the duty to bargain because it was encompassed within the pay practices negotiated by the parties pre-1972. The court found that the Authority had essentially taken too expansive a view of the scope of bargaining under sections 9(b) and 704 to include matters that had not been specifically included in a pre-1972 collective bargaining agreement. In the court's view, "the legislative history demonstrates that Congress enacted Sections 9(b) and 704 in order to preserve the status quo, not to expand the scope of the bargaining obligations between federal employers and prevailing rate employees." 908 F.2d at 574. The court determined that, given the various types of premium pay Congress has defined, "it would be a misinterpretation of Section 704(a) to conclude that negotiation of any type of premium pay operated to preserve the negotiability of all others. What is of importance is the exact kind of premium pay that was the subject of previous bargaining." Id. at 575.

In BIA v. FLRA, the court reversed the Authority's conclusion that a proposal calling for "save pay" was preserved for bargaining under section 704. The Authority had reasoned that the save pay provision "relate[d] to the same subject matter, pay and pay practices, which ha[d] been negotiated previously." National Federation of Federal Employees, Local 341 and U.S. Department of the Interior, Bureau of Indian Affairs, Yakima Agency and the Wapato Irrigation Project, 30 FLRA 783, 787 (1987). On the contrary, finding that Congress had not treated wages "as a simple uniform topic[,]" the court stated that the critical inquiry under section 704(a) focused on the kind of wages that were the subject of pre-1972 bargaining. 887 F.2d at 176. As save pay provisions had not been the subject of prior bargaining between the parties, the proposal was not within the duty to bargain.

Taking these judicial decisions into account, the Authority, in VOA, distinguished between a "general subject matter" negotiated by parties and a "specific term or condition of employment, or other employment benefit," finding that only the latter could satisfy the requirement of section 704(a). 49 FLRA at 1295. The Authority found, for example, with regard to proposals seeking to preserve work for bargaining unit employees, that the operation of technical equipment was the general subject matter of negotiation and that the specific terms and condition of employment concerning which the parties had bargained focused on the employee's exclusive right to perform particular functions. See id. at 1300-03. The evidence relied on in reaching this determination consisted of the union's meeting notes from negotiations held in 1966 and 1967 and employee job descriptions.

Also in VOA, the Authority stated that in order to assess the subject that a bargaining proposal addresses, the Authority considers all pertinent factors, including, as appropriate: (1) the text of any relevant proposal; (2) evidence, including bargaining history, relating to the intent of any relevant proposal; (3) evidence as to the current and pre-1972 work situations of the unit (for example, the agency's structure and functions and the employees' duties); and (4) the parties' contentions as to whether Congress has expressed any intent through legislation as to the scope of a subject matter.

3. Analysis Under Section 704(b)

Section 704(b) modifies the scope of bargaining under section 704(a) with respect to "pay and pay practices." "Pay and pay practices" refer to matters that are historically considered part of an employee's compensation package, such as: (1) adjustments to an employee's basic rate of pay; (2) matters concerning the payment of differentials, overtime, and premiums; and (3) any other general compensation policies that entered into and became a part of the employee's total compensation package. See United States Information Agency, Voice of America, 37 FLRA 849, 861 (1990). A "pay and pay practice" must not only meet the criteria of section 704(a), but must also be in accord with current prevailing rates and practices. Unions bear the burden of establishing that their proposals are in accord with prevailing rates and practices in the relevant industry. Boulder City, 51 FLRA at 233.

C. Issues Presented in This Case

This case presents issues involving an application of section 9(b)(2) of the PRSA and sections 704(a) and 704(b) of the CSRA. Specifically, we must decide whether the disputed proposal: (1) constitutes an "extension, modification, or improvement" of a subject of negotiations prior to August 19, 1972; and (2) is in accord with a current prevailing practice in the industry.

D. Application of the Framework to the Issues Presented

1. The Proposal Constitutes an "Extension, Modification, or Improvement" of a Subject of Negotiations Prior to August 19, 1972

The parties' sole disagreement with respect to the requirements of section 704(a) is whether the proposal involves the same subject of negotiation that existed prior to August 19, 1972.(7) Resolving this dispute requires an examination of the evidence presented by the Union to support its claim of pre-1972 negotiations. We note at the outset, and find it significant, that the Agency does not contest the veracity of the documentary evidence submitted by the Union.

Previously, the Authority has relied on agreement provisions and bargaining notes to assess whether a proposal concerns the same specific subject that had been negotiated pre-1972.(8) See VOA. Here, the evidence shows that, prior to August 19, 1972, provisions that sought to balance wages and fringe benefits by boosting wages to account for a deficiency in fringe benefits that were prevailing in the industry, had been a specific subject of negotiation. These offset provisions were bargained on both an individualized fringe benefit basis, as evidenced by the parties' 1969 and 1970 negotiations, and on an aggregated fringe benefit basis, as evidenced by a 1967 compensation award. For example, the 1970 negotiations establish that: (1) the practice in the industry was to provide 9 paid holidays; (2) unit employees were given 8 paid holidays; and (3) the parties agreed to increase the pay of employees to compensate for the disparity in the number of paid holidays that existed in the industry. See Response, Exh. C at 5.

Evidence from the parties' 1969 negotiations shows that the parties bargained over Union proposals that would have required the Agency to pay each employee an additional $20.00 per month in lieu of paying the full cost of medical insurance because the "Government's contribution to the cost of medical insurance has left the [Agency] far behind the great majority of the Utility Industry." Response, Exh. B, page 2. Other evidence in the record demonstrates that the parties bargained in 1970, without apparently concluding an agreement, with regard to extra pay to eliminate other disparities between the fringe benefits provided to unit employees and the fringe benefits provided to employees in the industry.

Additionally, the record reveals that, in 1967, the parties agreed to have a panel of arbitrators establish wage rates for 45 job classifications for the contract year ending June 30, 1968.(9) Bargaining with regard to pay rates was authorized by law, with the rates established in accordance with prevailing rates ascertained through the use of fact-finding surveys in the industry. The award indicates that the arbitration panel considered, but rejected in a majority opinion, an increase in the wage rates that would have taken into account the fringe benefits paid by other utilities.

From the foregoing, we find that the record contains sufficient evidence to establish that the specific subject of increasing pay to offset reduced levels of fringe benefits for unit employees was a subject of negotiations between the parties prior to August 19, 1972.

We recognize that the evidence concerning the parties' 1969 and 1970 negotiations presented above involved additional pay for individual benefits that were not made available to unit employees. The instant proposal, on the other hand, groups together, or aggregates, individual fringe benefits for purposes of determining the additional wage increase that employees will receive to offset the deficiency in total fringe benefits. Consistent with section 9(b)(2), and the approach taken by the Authority in such cases as Boulder City, VOA, and Mid-Pacific Regional Office, we find that the proposal constitutes an extension, modification, or improvement of a pre-1972 subject of negotiation, namely, the balancing of wages and fringe benefits. Specifically, by including more than one fringe benefit, the proposal would likely improve the overall wage increase. In seeking to augment employees' compensation, this proposal is to the same effect as a proposal in Boulder City, that extended the types of situations for which overtime was payable and increased the rate of pay in overtime situations and that the Authority found to be preserved for bargaining under section 704(a). See Boulder City, 51 FLRA at 241-42.

We also find that this case is distinguishable from Rio Grande v. FLRA and BIA v. FLRA, in which the courts found that the unions were essentially attempting to preserve for bargaining "new" subjects, rather than those that had been the subject of pre-1972 negotiations. First, in Rio Grande v. FLRA, it was undisputed that the matter of Sunday pay had never been a specific subject of bargaining between the parties prior to August 19, 1972. Instead, the agency had a practice of providing such pay to employees. 908 F.2d at 571. Similarly, in BIA v. FLRA, there was nothing in the record to show that a save pay provision had ever been included in an agreement between the parties. 887 F.2d at 174-75. In contrast, in this case, the proposal is simply an extension, modification or improvement of a pre-1972 subject of negotiation. Like the parties' pre-1972 bargaining, which focused on additional pay to balance against a reduced fringe benefits, the current proposal seeks to provide an additional wage increase for unit employees based on a disparity in fringe benefits provided to employees in the industry. The proposal does not concern a new subject of negotiation.

Second, as to both Rio Grande v. FLRA and BIA v. FLRA, the courts found particularly significant the fact that Congress had legislated for different kinds of pay and had not viewed pay as a uniform or generic matter. In BIA v. FLRA, the court stated that Congress had not treated federal employees' wages as a uniform topic but, instead, had specifically treated various wages, such as merit pay, Sunday and holiday pay, as separate subjects. In Rio Grande v. FLRA, the court held that "[l]ike the court in [BIA v. FLRA], we conclude that, given the various types of premium pay Congress has defined by statute, it would be a misinterpretation of Section 704(a) to conclude that negotiation of any type of premium pay operated to preserve the negotiability of all others." 908 F.2d at 575. Here, no party has pointed to, and we are unaware of, any indication that Congress has spoken to the issue of providing additional pay to account for a deficiency in fringe benefits. Instead, as a subject that is purely a creation of contract negotiations, the constraints imposed by legislative action do not exist.

We are mindful of the court's cautionary statement in Rio Grande v. FLRA that "[i]f viewed broadly enough, almost any subject of negotiations could somehow be connected to one which was previously the subject of negotiations so as to qualify as a 'modification' or an 'item[] of subject matter' previously negotiated." Id. at 574. However, we are unaware of any requirement for an exact congruence between the language of a proposal and subjects that had been previously negotiated. By authorizing negotiations over the extension, modification, or improvement of provisions negotiated pre-1972, it is apparent that section 9(b)(2) was not designed to "freeze" bargaining in its precise pre-1972 contours. There must be some latitude to enable parties to tailor their bargaining to account for changing work situations and economic conditions. We believe that in enacting section 9(b), Congress must have contemplated that the workplace would not remain static and that collective bargaining would have to be dynamic in order to address changing conditions. For example, the facts in VOA amply demonstrate how parties have been able to negotiate in the face of technology that has evolved since the PRSA was enacted. At the same time, we recognize, consonant with the court's further statement in Rio Grande v. FLRA, that "Congress enacted Sections 9(b) and 704 in order to preserve the status quo, not to expand the scope of the bargaining obligations[,]" id., and that there are limits on the permissible range of negotiated extensions, modifications and improvements. The proposal in this case, in our view, falls within that permissible range because it builds upon the parties' negotiation over additional wage increases to offset a disparity in fringe benefits to account for changed economic conditions, without constituting a departure from prior negotiations.

In sum, and for the reasons fully set forth above, we find that the proposal satisfies all of the requirements of sections 704(a) and 9(b)(2).

2. The Proposal Is in Accord with a Current Prevailing Practice in the Industry

There is no dispute that the proposal in this case concerns a pay practice within the meaning of section 704(b). The parties disagree, however, over whether the pay practice is a prevailing practice in the industry, which is comprised of eight Pacific Northwest utilities. "[I]f a pay practice is not among the current practices in the industry, the parties may not negotiate over that subject." United States Information Agency v. FLRA, 895 F.2d 1449, 1455 (D.C. Cir. 1990) (USIA). However, if the pay practice "has some place in current industry practice, then the parties must negotiate over the subject . . . ." Id. at 1455 (emphasis in original). As we stated earlier, the Union bears the burden of establishing that its proposal is in accord with a prevailing practice.

The evidence submitted by the Union consists of statements by five of the eight utilities that establish that these industry employers and unions all negotiate using a process that offsets wages and fringe benefits in arriving at their total compensation.(10) By way of example, the director of labor relations for one of the utilities stated that if the union were to request, and the company were to grant, an additional holiday, the wage offer would be reduced by a percentage amount. Response, Exh. G. Likewise, the manager of human resources operations for a different utility stated that, in negotiations, wages and benefits "are offset by each other." Response, Exh. J. The business representative negotiating for a union with another utility stated that, in negotiations, "any increase in [fringe benefits] . . . in the last seven years of collective bargaining ha[s] been an offset in the wage proportion." Response, Exh. A to Bishop Affidavit.

This evidence establishes that there is an industry practice of offsetting wages and fringe benefits. While the examples stated above refer to an increase in the value of fringe benefits and proportional decreases in wages, they actually operate conversely as well--an increase in wages is accompanied by a proportional decrease in the value of fringe benefits. Both situations reflect the parties' attempt at balancing wages and fringe benefits to achieve their desired level of total compensation. This is precisely the intent and function of the Union's proposal.(11) See Part IV.A. Accordingly, we find that the subject of the Union's proposal "has some place in current industry practice[.]" USIA, 895 F.2d at 1455 (emphasis in original).

In reaching this result, we reject the Agency's reliance on a survey that it conducted that purportedly showed "an absence of any respondent indicating a pay practice of boosting wages to balance below-market values in their benefits programs." Statement of Position at 6. The Agency has presented no evidence of this survey, other than a bare assertion as to its results. More significantly, however, the evidence that has been presented clearly shows, to the contrary, that parties in the relevant industry negotiate in such a way that balances wages and fringe benefits.

We also find that this case is distinguishable from a proposal in Mid-Pacific Regional Office, 43 FLRA at 1161-63, that required the agency to "grant all bargaining unit positions a 7.75% inequity increase" following a general wage increase. The union had argued that it was seeking to adjust wages to achieve "total compensation parity." Id. at 1163. Addressing solely the requirement of section 704(b) that the disputed pay practice must be in accordance with current prevailing practices, the Authority found nothing in the record to show that there was a current prevailing industry practice of adjusting employees' rates of pay to provide total compensation parity or that any other payments were provided to achieve that objective. While noting the union's argument that "the concept of total compensation [was] consistent with accepted compensation survey principles and methodology as well as the principle of prevailing practices[,]" the Authority found that the union failed to show that the surveyed industries employed a practice of adjusting pay based on comparative levels of total compensation. In contrast, the Union here has presented evidence to show that its proposal is in accord with a prevailing industry practice.

In sum, and for the reasons explained above, we find that the proposal satisfies the requirements of section 704(b).

V. Order

The Agency shall, upon request, or as otherwise agreed to by the parties, negotiate concerning the proposal.(12)

APPENDIX

Section 9(b) of Pub. L. No. 92-392, codified at 5 U.S.C. § 5343 (Amendments), provides that:

The amendments made by this Act shall not be construed to--

(1) abrogate, modify, or otherwise affect in any way the provisions of any contract in effect on the date of enactment of this Act [Aug. 19, 1972] pertaining to the wages, the terms and conditions of employment, and other employment benefits, or any of the foregoing matters, for Government prevailing rate employees and resulting from negotiations between Government agencies and organizations of Government employees;

(2) nullify, curtail, or otherwise impair in any way the right of any party to such contract to enter into negotiations after the date of enactment of this Act [Aug. 19, 1972] for the renewal, extension, modification, or improvement of the provisions of such contract or for the replacement of such contract with a new contract; or

(3) nullify, change, or otherwise affect in any way after such date of enactment [Aug. 19, 1972] any agreement, arrangement, or understanding in effect on such date [Aug. 19, 1972] with respect to the various items of subject matter of the negotiations on which any such contract in effect on such date [Aug. 19, 1972] is based or prevent the inclusion of such items of subject matter in connection with the renegotiation of any such contract, or the replacement of such contract with a new contract, after such date [Aug. 19, 1972].

Section 704 of the CSRA, codified at 5 U.S.C. § 5343 note (Amendments), provides that:

(a) Those terms and conditions of employment and other employment benefits with respect to Government prevailing rate employees to whom section 9(b) of Public Law 92-392 . . . applies which were the subject of negotiation in accordance with prevailing rates and practices prior to August 19, 1972, shall be negotiated on and after the date of the enactment of this Act (Oct. 13, 1978) in accordance with the provisions of section 9(b) of Public Law 92-392 without regard to any provision of chapter 71 of title 5, United States Code (as amended by this title), . . . to the extent that any such provision is inconsistent with this paragraph.

(b) The pay and pay practices relating to employees referred to in paragraph (1) of this subsection shall be negotiated in accordance with prevailing rates and pay practices without regard to any provision of--

(A) chapter 71 of title 5, United States Code (as amended by this title), to the extent that any such provision is inconsistent with this paragraph;

(B) subchapter IV of chapter 53 and subchapter V of chapter 55 of title 5, United States Code; or

(C) any rule, regulation, decision, or order relating to rates of pay or pay practices under subchapter IV of chapter 53 or subchapter V of chapter 55 of title 5, United States Code.

Member Cabaniss, dissenting:

I disagree with my colleagues' conclusion that the disputed proposal is within the duty to bargain. Although there is sufficient evidence in the record to support the conclusion that utilities in the survey area relied on by the parties use a total compensation approach to the determination of wages and fringe benefits, I cannot agree that the proposal in this case implements such an approach. Consequently, I conclude that the proposal is inconsistent with current prevailing practices in the industry and is not preserved for bargaining under section 704(b).

The record establishes that the total compensation approach used by the utilities in the survey area involves a determination of the total cost of the elements of employee compensation anticipated by a utility and, within that total, adjustment of wage levels depending on the cost of fringe benefits. Thus, as stated in the submissions of the surveyed utilities,(1) even if a utility determined that it could afford to raise total compensation, if the costs of fringe benefits within that total increased sufficiently, it would be necessary to lower wages as a result. Correlatively, if the cost of fringe benefits remains unchanged, or decreases, an increase in wage levels would result.

In my view, the proposal in this case cannot be interpreted as embracing both possibilities. It provides only for a wage increase if the survey demonstrates that unit employees' fringe benefits are comparatively less, within the respective levels of total compensation, than those in the surveyed utilities.(2) It does not allow for lower wages if the survey results show that unit employees' fringe benefits are comparatively greater, within the respective levels of total compensation. Consequently, I do not believe that the disputed proposal reflects the total compensation approach evidenced by the surveyed utilities in the record and I cannot conclude that the proposal is consistent with current prevailing practices in the industry as required by section 704(b).

Because I conclude that the proposal is not in accord with current prevailing practices in the industry, I find that the proposal is not preserved for bargaining under section 704(b). In light of this conclusion, I do not reach the question of whether the proposal concerns a matter that was subject to bargaining between the parties prior to August 19, 1972, within the meaning of section 704(a).




FOOTNOTES:
(If blank, the decision does not have footnotes.)
 


Authority's Footnotes Follow:

1. Member Cabaniss' dissenting opinion appears at the end of this decision.

2. The relevant statutory provisions are set forth in the Appendix to this decision.

3. The reference in the proposal to BPA is to the Bonneville Power Administration.

4. Of the eight utilities that the parties survey, five provided evidence in this case.

5. The term "offset" is defined as "something that serves to counterbalance or to compensate for something else[.]" Webster's Third New International Dictionary (1986) (unabridged).

6. In this regard, the record reveals that the Union's proposal was fashioned after the results of an industry survey were completed in 1994 that showed "that the value of the surveyed benefits for [the Agency] was 95 percent of the average value of the same benefits for the other eight utilities." Petition for Review, unnumbered exhibit dated June 23, 1995.

7. The parties do not dispute that unit employees are Government prevailing rate employees to whom section 9(b) of the Prevailing Rate Systems Act applies and that the proposal pertains to "terms and conditions of employment and other employment benefits." Therefore, we do not address those elements of section 704(a) further.

8. The Authority also has stated that it will look to evidence of the current and pre-1972 work situations of the unit and evidence of congressional intent with regard to the scope of bargaining. The former type of evidence is not pertinent to this case and will not be discussed further. The latter is discussed below.

9. As this interest arbitration award stemmed from the parties' wage bargaining, it can be used as evidence of their pre-1972 negotiations. By analogy, we note that the resolution of bargaining disputes by the Federal Service Impasses Panel is also considered part of the negotiation process. See e.g., Social Security Administration, 35 FLRA 296, 304 (1990).

10. As we understand the use of the terms "percentage amount" and "proportion" in the examples discussed, infra, total compensation likely varies from year to year, with the value of wages and the value of fringe benefits changing as well.

11. We agree with our dissenting colleague that the prevailing industry practice involves an adjustment of wage levels, relative to the cost of fringe benefits, when considering total compensation costs. We view the adjustment as simply a balancing of the relative value of wages and fringe benefits, which is the subject of both the proposal and industry practice. Our colleague finds critical the fact that the proposal does not allow for a proportional reduction in wages if unit employees' fringe benefits are higher relative to their industry counterparts. This, we think, overlooks the fact that it is the use of balancing, and not the results of the balancing, that determines whether this proposal is in accord with the prevailing practice. As noted earlier, see n.4, supra, the record in this case shows that bargaining unit employees' fringe benefits are only 95 percent of or, stated otherwise, lag 5 percent behind the industry average. The proposal at issue was designed to address this prevailing condition in arriving at the level of total compensation desired by the Union.

12. In finding the proposal to be within the duty to bargain, we make no judgment as to its merits.


Dissenting Opinion Footnotes Follow:

1. See, e.g., Attachments G and J to the Union's Response.

2. By its terms, the proposal does not apply to any specific survey. It is undisputed, however, that the proposal would not permit a downward adjustment in wages with respect to any survey to which it did apply if the results of the survey necessitated such an adjustment for purposes of achieving comparable total compensation. In my view,