54:1365(116)AR - - SSA, Office of Hearings and Appeals & AFGE Council 215 [ Social Security Administration ] - - 1998 FLRAdec AR - - v54 p1365

[ v54 p1365 ]
The decision of the Authority follows:

54 FLRA No. 116














October 28, 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 Roger P. Kaplan 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.

As relevant here, the Arbitrator sustained a grievance asserting that the Agency violated the parties' negotiated collective bargaining agreement (CBA) when it reassigned without competition six employees as part of the Agency's redeployment plan. The Arbitrator ordered the Agency to make six new positions available and to fill them competitively under the CBA.(1)

For the following reasons, we conclude that the award is deficient under section 7122(a)(1) of the Statute. Accordingly, we set aside the award and remand this case to the parties with the direction that, absent settlement, the case should be submitted to the Arbitrator for reconsideration of the remedy, consistent with this decision.

II. Background and Arbitrator's Award

A. Background

The Agency developed a redeployment plan as part of an effort to reduce layers of government and reallocate human resources into direct service to the public. Negotiations over implementation of the plan at the Activity reached impasse, and the Union requested the assistance of the Federal Service Impasses Panel (FSIP). After two days of meetings with the FSIP, the Union withdrew its request for assistance. The Agency subsequently notified the Union that it intended to implement its last/best offer, and then did so.

The Agency's plan allowed eligible employees to volunteer for permanent moves, taking their FTEs (full-time equivalent positions) with them, moving from certain staff and management positions to direct service/workload positions. Previous workload experience was not required.

As the Agency implemented the plan at the Activity, employees were selected noncompetitively for redeployment to paralegal positions in the Agency's Office of Appellate Operations/Office of Hearings and Appeals (OHA), which are grade GS-12 positions with the potential of noncompetitive promotion to grade GS-13. Six of the twelve employees who were reassigned did not meet the minimum qualifications for the GS-12 paralegal position, and were placed on a "Career Opportunities Training Agreement" (COTA) shortly after they were reassigned to the position. All those reassigned brought with them their FTEs. Under the plan, no vacant positions were created by the Agency in connection with the redeployment.

The implementation of the plan gave rise to the grievances and subsequent arbitration. Among other things, the grievances protested the noncompetitive reassignment of employees to paralegal positions. The Union insisted that the positions be filled by competitive merit staffing procedures under the CBA.(2) The grievances also protested the denial of applications for redeployment of two individuals at the GS-11 level.

B. Award

The Arbitrator found that under the circumstances, the Agency was permitted to implement its last/best offer after negotiations over the plan reached impasse and the Union withdrew from the FSIP process. Award at 18. The Arbitrator found, however, that the right to impose its last/best offer did not give the Agency the right to act inconsistently with its obligations under the CBA. Id.

The Arbitrator concluded that redeployment of the six employees who were placed on COTAs violated the CBA. The Arbitrator based this conclusion on a finding that the CBA requires selection on a competitive basis for reassignments to positions that provide an employee with specialized experience that the employee did not already have, when the experience is required for subsequent promotion to a designated higher grade position. Id. at 22.(3)

To remedy this violation, the Arbitrator directed:

Since there would have been six (6) vacancies in OHA that would have been filled competitively but for the Agency's violation of the Agreement, I order that six

(6) new positions in OHA be made available and filled competitively, in compliance with the Agreement[.]

Id. at 25 (emphasis in original).(4)

III. Positions of the Parties

A. Agency's Exceptions

The Agency asserts that the Arbitrator's conclusion, that there would have been six vacancies filled competitively but for the redeployment of those on COTAs, does not draw its essence from the CBA. The Agency's contention is that the redeployment plan, and not the CBA, should be the basis for the award:

The arbitrator's award must draw its essence from that last/best offer . . . regarding implementation of the Plan. The arbitrator's conclusion regarding the applicability of Article 26, Section 3.B, denies the Agency of its right to seek to modify the National Agreement. . . .

Exceptions at 5.

The Agency contends that the redeployment was about moving people, along with their FTEs, from non-workload positions to workload positions. The Agency states that the plan was not used to fill existing vacancies, and therefore the plan was not required to be consistent with the terms of the CBA. The Agency contends that its last/best offer was "tantamount to an agreement" when the Union failed to request the services of the FSIP within a reasonable time after notice of the Agency's intent to implement the award. Id. Therefore, the Agency asserts that the Arbitrator's award must draw its essence from this agreement, not the CBA.

The Agency also contends that the award is contrary to law. In particular, the Agency asserts that an award requiring that any number of new positions be made available and filled competitively--

interferes with the Agency's right to determine its organization and the number of employees, and the right to make substantive determinations in the selection and appointment process. Such an award denies, for example, the agency's right to not fill a position, to allocate vacancies to other parts of the organization, or to fill position vacancies noncompetitively, by use of details, or from any appropriate source.

Exceptions at 6.

B. The Union's Opposition

Regarding the Agency's "essence" argument, the Union asserts that the Agency's claim that the award must draw its essence from the Agency's last/best offer and not from the CBA "is baseless." Opposition at 2. The Union claims that this is because the Agency's last/best offer "clearly affirms" that the parties will abide by and comply with the CBA. "As such, this exception lacks credibility and merit." Id.

The Union also contests the Agency's assertion that the award is contrary to law. In this regard, the Union asserts that the Agency's claim--that the award is contrary to law based on a management's right assertion to make determinations in the selection and appointment process--"makes no sense[.]" Id. Instead, the Union claims that the law and the negotiated agreement support the award. The Union states:

It is vital to note that the Agency did not address its violative conduct in selecting and reassigning six individuals which the Arbitrator found gave rise to a remedy of filling positions on a competitive basis. To simply state, the Agency has a legal responsibility to remove the six illegally reassigned individuals and not fill any positions or retain the six individuals and competitively fill the six positions.

Based on the [CBA], the Union submits such a finding by the Arbitrator does not interfere with management's rights and clearly constitutes a contractual interpretation and 7106(b)(1) Union rights.

Id. (emphasis in original).

IV. Analysis and Conclusions

A. The Award Draws Its Essence from the Collective Bargaining Agreement

In reviewing an arbitrator's interpretation of a collective bargaining agreement, the Authority applies the deferential standard of review that Federal courts use in reviewing arbitration awards in the private sector. See 5 U.S.C. § 7122(a)(2); American Federation of Government Employees, Council 220 and Social Security Administration, Baltimore, Maryland, 54 FLRA 156, 159 (1998). Under this standard, the Authority will find that an arbitration award is deficient as failing to draw its essence from the collective bargaining agreement when the appealing party establishes that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. See United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 575 (1990). The Authority and the courts defer to arbitrators in this context "because it is the arbitrator's construction of the agreement for which the parties have bargained." Id. at 576.

The Agency contends that its last/best offer on its redeployment plan became tantamount to an agreement when the Union failed to request the services of the FSIP upon being informed that the Agency intended to implement its plan. Accordingly, claims the Agency, the award must draw its essence from that last/best offer, and not the CBA.

The Arbitrator found that a "right to impose its last best offer did not . . . give [the Agency] carte blanche to act inconsistently with its existing obligations under the Agreement." Award at 18. The Arbitrator determined that the provisions of the CBA provide the standard by which to evaluate the Agency's actions. The Arbitrator's determination that the CBA provisions apply is itself an interpretation of the CBA. We defer to the Arbitrator's construction of the CBA. The Agency has not demonstrated that the award fails to draw its essence from the CBA on any of the aforementioned grounds.

Therefore, we deny this exception.

B. The Award Is Not Contrary To Law

As the Agency's exceptions allege that the award is contrary to law, we review the questions of law raised by the award and the Agency's exception de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.

The Authority's framework for resolving exceptions alleging that an award violates management's rights under section 7106 of the Statute is set forth in U.S. Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C. and National Treasury Employees Union, Chapter 201, 53 FLRA 146, 151-54 (1997) (BEP). Upon finding that an award affects a management right under section 7106(a), the Authority applies a two-prong test. Under prong I of this framework, the Authority examines whether the award provides a remedy for a violation of either applicable law, within the meaning of section 7106(a)(2) of the Statute, or a contract provision that was negotiated pursuant to section 7106(b) of the Statute. Id. at 153. If the award provides such a remedy, the Authority will find that the award satisfies prong I of the framework and will then address prong II. Under prong II of BEP, the Authority considers whether the arbitrator's remedy reflects a reconstruction of what management would have done if management had not violated the law or contractual provision at issue. Id. at 154. If the arbitrator's remedy reflects such a reconstruction, the Authority will find that the award satisfies prong II. An award that fails to satisfy either prong I or prong II will be set aside or remanded to the parties. See U.S. Department of Defense, Defense Logistics Agency, Defense Distribution Depot, Norfolk, Virginia and International Association of Machinists and Aerospace Workers, Local Lodge 97, 54 FLRA 180, 185 (1998); U.S. Department of Veterans Affairs Medical Center, Coatesville, Pennsylvania and National Association of Government Employees, Local R3-35, 53 FLRA 1426, 1431 (1998) (V.A., Coatesville).

1. The Award Affects the Section 7106(a) Management's Right to Determine Its Organization

The Agency has asserted that the award is deficient as contrary to management's rights, but it does not make specific references to the Statute or case law. We construe the Agency's exception to raise the claims that the Award is deficient as contrary to the section 7106(a)(1) management rights to determine its organization, the employees necessary to accomplish its mission, and the Agency's budget. We also construe the exception to mean that the award violates the section 7106(a)(2) right to select and assign personnel.

The award would require the Agency to create new positions. This is similar to the requirement that an agency create career ladder positions, found to affect the section 7106(a)(1) right to determine the organization of the agency in Congressional Research Employees Association and Library of Congress, Congressional Research Service, 25 FLRA 306, 324-25 (1987) (Library of Congress). Cf. National Treasury Employees Union and U.S. Customs Service, Pacific Region, 32 FLRA 1141, 1148 (1988) (not contrary to section 7106(a) because, unlike Library of Congress, arbitrator's award does not impermissibly affect section 7106(a)(1) rights by requiring creation of career ladder positions); American Federation of Government Employees, Local 32, AFL-CIO and Office of Personnel Management, 19 FLRA 93, 96 (1985) (proposal requiring creation of bridge positions nonnegotiable because it prevented agency from deciding that it would not create bridge positions and thereby impermissibly affected right to determine organization); American Federation of Government Employees, Local 1923 and U.S. Department of Health and Human Services, Health Care Financing Administration, Baltimore, Maryland, 44 FLRA 1405, 1454-58 (1992) (proposal to use tools "such as" creation of bridge position to accomplish goals does not require the creation of bridge positions, and thus does not impermissibly affect management's right to determine its organization).

In our view, a requirement to create career ladder positions, or bridge positions, both of which have been found to interfere with section 7106(a) management rights, is indistinguishable from the award's requirement to create new positions in this case. Both in those examples and in this case, an agency would be required to establish more positions than it deems necessary for its efficient operation. Thus, we conclude that the award requiring the Agency to create new positions affects the section 7106(a)(1) management right to determine the organization of the Agency.(5)

2. The Award Enforces A "Procedure" Negotiated Pursuant to Section 7106(b)

The Arbitrator found that the Agency violated the competitive selection requirements of Article 26, Section 3.B of the CBA. To remedy the violation, the Arbitrator ordered "that six new positions in OHA be made available and filled competitively[.]" Award at 25.

The Agency does not claim that Article 26, Section 3.B is not enforceable. In addition, the provision is substantively similar to a proposal found by the Authority to be within the duty to bargain as a procedure under section 7106(b)(2). See Pennsylvania National Guard and Association of Civilian Technicians and Pennsylvania National Guard and Association of Civilian Technicians, Pennsylvania State Council, 35 FLRA 478, 487 (1990) (requirement in the CBA "to use competitive procedures in the parties' collective bargaining agreement before filling a position through whatever means it chooses [is a procedure that] does not conflict with the right to make selections under section 7106(a)(2)(C)[.]"). The provision enforced by the Arbitrator in the instant case requires competitive procedures to be used for reassignments in certain circumstances, but the initial management decision to make reassignments is unaffected.

In view of the foregoing, we find that the award enforces a contract provision that was negotiated pursuant to section 7106(b). We therefore proceed to the prong II analysis.

3. The Award Does Not Reconstruct What the Agency Would Have Done If it Had Acted Properly

The Arbitrator found that the Agency violated the CBA by the manner in which it redeployed personnel. Under the circumstances here, the CBA requires redeployment to be done on a competitive basis. The Arbitrator's remedy involved creating new positions, which is unrelated to what the Agency would have done if it had acted properly under the provision of the CBA providing for competitive redeployment. Therefore, the relief fails to reconstruct what the Agency would have done had it acted properly. Consequently, the award does not satisfy prong II of BEP and, as a result, is deficient.

Because the award fails to meet the reconstruction test of the second prong of BEP, the award must be set aside. However, such a result would leave the Union with no remedy for the violation found by the Arbitrator. Therefore, it is appropriate to remand this portion of the case to the parties, for resubmission to the Arbitrator to determine an appropriate remedy, if the parties cannot resolve the dispute. See V.A., Coatesville. Such a remedy must represent a reconstruction of what management would have done in the absence of a violation, consistent with law.(6)

V. Decision

This case is remanded to the parties with the direction that, absent settlement, the remedy issue should be submitted to the Arbitrator.


1. The only exceptions are to the remedy. As no exceptions were filed to other portions of the award, those portions of the award are not before the Authority for consideration.

2. The relevant section of the CBA is Article 26 Merit Promotion, Section 3.B:

Section 3 - Applicability of Competitive Procedures

B. Reassignment/Changes to Lower Grade. Any selection to a position that provides specialized X-118 or X-118C experience that the employee does not already have and is required for subsequent promotion to a designated higher grade position and/or to a position with known promotion potential must be made on a competitive basis.

3. Conversely, the Arbitrator found that redeployment of the other six employees did not have to be made on a competitive basis, and did not violate the CBA, because they already possessed the experience that would be gained from service in the GS-12 paralegal position. There are no exceptions to that part of the Award.

4. The Arbitrator declined to order a return to the prior d