54:0506(53)AR - - DOT, FAA, NY Therminal Radar Control Facility, Westbury, NY and National Air Traffic Controllers Association [ DOT = Department of Transportaion, FAA = Federal Aviation Administration ] - - 1998 FLRAdec AR - - v54 p506
[ v54 p506 ]
The decision of the Authority follows:
54 FLRA No. 53
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
NEW YORK TERMINAL RADAR CONTROL FACILITY
WESTBURY, NEW YORK
NATIONAL AIR TRAFFIC CONTROLLERS ASSOCIATION
June 30, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S.
Wasserman and Dale Cabaniss, Members.
Decision by Member Wasserman for the Authority
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Irwin J. Dean, Jr. 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 denial of a pay differential to grievants who accepted jobs in reliance upon such pay that was described in a vacancy announcement but which was terminated before they were selected for the jobs. As a remedy, the Arbitrator ordered that the grievants be awarded backpay. For the following reasons, we conclude that the award is deficient because it is contrary to law. Accordingly, we strike the order that the grievants be awarded backpay and remand the award for consideration of an appropriate remedy.
II. Background and Arbitrator's Award
The Office of Personnel Management (OPM) approved a demonstration project that was conducted by the Agency.(1) The purpose of the project was to test the effectiveness of incentive pay in recruiting and retaining experienced, qualified employees in designated occupations, such as air traffic controllers, in certain hard-to-staff facilities, such as the New York Terminal Radar Control facility (TRACON). Under the project, air traffic controllers who accepted new assignments in the New York TRACON, or who remained at that facility, were entitled to a pay differential of twelve percent over their scheduled base pay (demonstration project pay).(2) The project took effect on June 18, 1989 and, by its terms, expired on June 17, 1994. See 54 Fed. Reg. 10200.
The Agency required each air traffic controller who was selected for the demonstration project at New York TRACON to satisfy certain training requirements after his or her arrival at that facility. In July 1989, the Agency and the Union entered into a memorandum of understanding (MOU) that addressed the impact and implementation of the project. The MOU provided, among other things, that the Agency would provide moving expenses from "permanent change of station funds" in the event that a selectee failed to satisfy training requirements after his or her arrival at a facility and, as a result, sought to be relocated to another facility. Award at 25. The MOU was effective only for the duration of the pay demonstration project.
Although the demonstration project was scheduled to end on June 17, 1994, the Agency's budget request to Congress for fiscal year 1994 proposed to terminate the demonstration project effective the end of September 1993. In this regard, on September 28, 1993, the Agency's director of personnel circulated a memorandum to all human resource management officers. In the memorandum, the director of personnel directed that vacancy announcements for positions participating in the project include a cautionary statement alerting applicants that pay demonstration funds may not be available for those positions.(3) However, Congress determined not to terminate the demonstration project prior to its scheduled conclusion.
In April 1994, the Agency circulated a vacancy announcement, inviting applications to be submitted between April 5, 1994, and April 26, 1994, for several air traffic controller positions at New York TRACON. The vacancy announcement indicated that selected employees would be eligible for demonstration project pay. However, the vacancy announcement did not contain the cautionary statement, as directed by the director of personnel, that pay demonstration funds may not be available for positions participating in the program.
On June 1, 1994, in section 401 of Pub. L. No. 103-260, 108 Stat. 702-703, Congress established "grandfather provisions" for the demonstration project. Section 401 of Pub. L. No. 103-260, 108 Stat. 702-703 provides that, after the termination of the demonstration project, demonstration project pay would continue, and gradually be phased out, "to those employees who are entitled to [demonstration project pay] under the demonstration project as of June 16, 1994." Subsequently, the project terminated on June 17, 1994.
In applying for the positions at New York TRACON, the grievants relied on the language in the vacancy announcement that indicated that selected employees would be eligible for demonstration pay, and that did not reference any cautionary statement regarding the availability of funds for such pay. Although the Agency circulated the vacancy announcement in April 1994 when the demonstration project was still in effect, the Agency did not "select" the grievants until August 10, 1994, after the termination of the project. Award at 17. Prior to their arrival at New York TRACON, the Agency did not inform the grievants that demonstration project pay promised in the vacancy announcement would not be available. When the grievants reported to work at New York TRACON, the Agency refused them that pay on the grounds that they had been selected after the termination of the project. Further, the Agency denied relocation expenses from "permanent change of station" funds to grievants who had failed to satisfy training requirements after their arrival at that facility and, as a result, sought to be relocated to another facility.
The Union filed a grievance, alleging that the Agency had "violated applicable law, rule and regulation by failing to make necessary amendments to the vacancy announcement and by failing to notify the selected individuals prior to their transfer" to New York TRACON about the pay limitations. Award at 5. As a remedy, the Union requested that the Agency pay the grievants demonstration project pay. In addition, the Union sought relocation expenses for grievants who had failed to satisfy training requirements after their arrival at that facility and, as a result, sought to be relocated to another facility.
The grievance was submitted to arbitration. The Arbitrator framed the issue as:
Was the [e]mployer correct in its decision to deny all monies and benefits associated with the pay demonstration project in accordance with applicable laws, rules, regulations, policies, practices, agreements, understandings, and the [c]ollective [b]argaining [a]greement, and, if not, what shall the appropriate remedy be?
Id. at 14-15.
The Arbitrator sustained the grievance in part. The Arbitrator concluded that, under the Back Pay Act, 5 U.S.C. 5596, the grievants were entitled to the demonstration project pay described in the vacancy announcement. The Arbitrator stated that the courts have held that the Back Pay Act provides a remedy for employees who have been subjected to "procedural irregularities". Award at 24. In support, the Arbitrator cited Crimaldi v United States, 651 F.2d 151 (2d Cir. 1981).
The Arbitrator noted that the Agency's local personnel representatives failed to include in the vacancy announcement, as directed by the Agency's personnel director, the cautionary language that funds may not be available for demonstration project pay. The Arbitrator found that as a result of the Agency's local personnel representatives' failure to do so, the vacancy announcement contained erroneous information about compensation upon which the grievants relied to their detriment. Consequently, the Arbitrator concluded that the Agency's local personnel representatives' failure to include the cautionary language in the vacancy announcement was "in direct contravention of internally adopted [Agency] policies" and, thus, constituted a "significant procedural error." Award at 24-25. As a remedy, the Arbitrator ordered the Agency to pay the grievants demonstration project pay.
The Arbitrator found that the Supreme Court's decision in Office of Personnel Management v. Richmond, 496 U.S. 414 (1990) (Richmond) was distinguishable from this case. The Arbitrator found that in that case, the erroneous information supplied to a Federal retiree by a Federal employee was done so innocently. In contrast, in this case, the Arbitrator concluded that the erroneous information supplied to the grievants by Agency's local personnel representatives was done so in direct contravention of agency policy.
Although the Arbitrator concluded that the grievants were entitled to demonstration project pay, he rejected the Union's request for relocation expenses for grievants who had failed to satisfy training requirements after their arrival at New York TRACON and, as a result, sought to be relocated to other facilities. The Arbitrator found that the Union based its request only on the MOU concerned with the impact and implementation of the demonstration project. Noting that the application of that agreement was limited to the duration of the pay demonstration project, the Arbitrator concluded that the MOU could not be the basis of relocation expenses for the grievants because that agreement had expired before the grievants had been selected.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the arbitration award is contrary to the Back Pay Act. The Agency asserts that, under the Back Pay Act, back pay may be awarded only if an employee is "legally entitled" to the lost pay. Exceptions at 4. The Agency argues that, because they did not report to work at New York TRACON until after the expiration of the pay demonstration project, the grievants did not meet the legal requirements to receive the demonstration project pay.
The Agency also contends that the award is inconsistent with the Supreme Court's decision in Richmond. The Agency asserts that in Richmond, the Supreme Court held that misinformation provided by an agency cannot operate to confer a benefit that is not otherwise authorized by law. The Agency argues that in this case the erroneous information provided by the Agency did not create an entitlement to the demonstration project pay because it was no longer authorized by law.
B. Union's Opposition
The Union asserts that the award of demonstration project pay is consistent with the Back Pay Act. The Union adds that the Supreme Court's decision in Richmond does not preclude that award. The Union maintains that, in any event, the Agency now has the latitude to provide the requested pay to the grievants because it has implemented a different personnel system and initiated another pay incentive program for New York TRACON.
IV. Analysis and Conclusions
A. Requirements of the Back Pay Act
Where an agency's exception involves the award's consistency with law, we review the questions of law raised by the agency's exception and the Arbitrator's award de novo. See National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)).
The Authority has held that 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 unjustified 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) (citing American Federation of Government Employees, Local 31 and U.S. Department of Veterans Affairs, Medical Center, Cleveland, Ohio, 41 FLRA 514, 517 (1991)). Because the Back Pay Act requires evidence of a causal relationship between the unjustified or unwarranted personnel action and a loss or reduction in pay, allowances, or differentials, backpay is authorized only where the violation resulted in such a loss or reduction. See U.S. Department of the Treasury, Customs Service, South Central Region, New Orleans, Louisiana and National Treasury Employees Union, Chapter 168, 43 FLRA 337, 340-41 (1991).
B. There Is No Causal Connection Between the Procedural Error and the Loss of Pay
The Arbitrator concluded that the Agency's local personnel representatives' failure to include the cautionary language in the vacancy announcement regarding the availability of funds for demonstration project pay was "in direct contravention of internally adopted [Agency] policies" and, thus, constituted a "significant procedural error." Award at 24-25. Even assuming, without deciding, that the Agency's local personnel representatives' failure to include the cautionary language in the vacancy announcement was a procedural error resulting in an unjustified or unwarranted personnel action, the record does not support a conclusion that that procedural error resulted in any alleged loss of the grievant's pay, allowances or differentials. Rather, the authorization for demonstration project pay had expired before the grievants had been selected for the positions in New York TRACON, and it was the expiration of the authorization that resulted in the reduction in pay. In particular, the project that authorized the demonstration project pay terminated on June 17, 1994. In addition, the "grandfather provisions" of section 401 of Pub. L. No. 103-260, 108 Stat. 702-703 did not apply to the grievants who were selected for the positions in New York TRACON in August 1994, well after the termination of the project.
Therefore, in these circumstances, there is no causal connection between the Agency's procedural error and any alleged monetary loss. Accordingly, the Back Pay Act does not encompass such payment. As the Back Pay Act does not provide a basis for awarding the demonstration project pay, the Arbitrator's order that grievants be paid demonstration project pay is deficient as contrary to the Back Pay Act, and we strike the order. See, e.g., U.S. Department of Veterans Affairs, Medical Center, Kansas City Missouri and American Federation of Government Employees Local 2663, 51 FLRA 762, 767 (1996); National Association of Government Employees, Local R1-109 and Veterans Administration Medical Center, Newington, Connecticut, 35 FLRA 206, 211-12 (1990) (arbitrator's award ordering that grievant be paid overtime set aside because arbitrator had not found that the grievant was improperly denied overtime pay as a result of the agency's violation of parties' agreement).
Although we strike the backpay order, the Arbitrator's finding that the Agency's actions regarding the vacancy announcement constituted a significant procedural error is unaffected. The Authority has noted that in such circumstances the parties may agree on an appropriate remedy or the Union may submit the issue of an appropriate remedy to arbitration. See, e.g., American Federation of Government Employees, Local 1843 and U.S. Department of Veterans Affairs Medical Center, Northport, New York, 51 FLRA 444, 450 n.6 (1995); Veterans Administration Medical Center, Newington, Connecticut and National Association of Government Employees, Local R1-109, 19 FLRA 535, 537 n.2 (1985).
The award is modified by striking the second sentence of the portion of the Arbitrator's decision entitled "Award." The award is remanded to the parties for consideration of a remedy consistent with this decision.
(If blank, the decision does not have footnotes.)
1. The provisions of 5 U.S.C. § 4703 authorize OPM, either directly or through agreement with other agencies, to conduct and evaluate demonstration projects in order to experiment with new and different personnel management concepts. 5 U.S.C. § 4704 provides that OPM will not enter into a contract with another agency to conduct a demonstration project "unless the contract has been provided for in advance in appropriations Acts."
2. The pay demonstration project originally authorized demonstration project pay of twenty percent over scheduled base pay. Subsequently, the Federal government provided Federal employees in the New York metropolitan area an eight percent locality pay differential. Consequently, demonstration project pay was reduced to twelve percent over the base scheduled pay at New York TRACON.
3. In the memorandum, the director of personnel suggested the inclusion of the following cautionary statement:
This position is currently covered under the DOT/FAA Pay Demonstration Project, which provides for payment of a quarterly recruitment and retention allowance of up to 20 percent of base pay. The DOT/FAA budget request for fiscal year 1994 proposed to terminate the demonstration project effective 9/18/93, nine months ahead of its statutory ending date of 6/17/94. However