54:1582(136)AR - - GSA and AFGE Council of GSA Locals, Council 236 - - 1998 FLRAdec AR - - v54 p1582



[ v54 p1582 ]
54:1582(136)AR
The decision of the Authority follows:


54 FLRA No. 136

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

GENERAL SERVICES ADMINISTRATION

(Agency)

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

COUNCIL OF GSA LOCALS

COUNCIL 236

(Union)

0-AR-3010

_____

DECISION

November 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 Louis Aronin 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 Agency challenges the Arbitrator's determination that a grievance concerning its refusal to bargain over the Union's proposal on contracting out was arbitrable and that its action violated the parties' collective bargaining agreement.

For the following reasons, we conclude that the award is deficient as contrary to law. Accordingly, we set the award aside.

II. Background and Arbitrator's Award

In 1993, the parties executed a Memorandum of Understanding (MOU) regarding the negotiation of revisions to their collective bargaining agreement. The MOU provided, as relevant here, that the terms of the collective bargaining agreement would continue until modified through negotiation and that "if negotiations take place over a 'reinventing' initiative, the agency will commit to negotiate over the subjects set forth in 5 U.S.C. [§] 7106(b)(1)." Award at 5.

In 1997, after the parties commenced negotiations for a new bargaining agreement, the Union proposed a modification to the agreement concerning the subject of contracting out. More specifically, the Union proposed that Article 30, section 1, be modified to provide, inter alia, that before the Agency decides to contract out work in any organizational subdivision in which the Union holds exclusive recognition, it will offer the Union the opportunity to negotiate over the matter in accordance with section 7106(b).(1)

The Agency concluded that the proposal was not within the duty to bargain and the Union then filed a grievance. When the matter was not resolved, it was submitted to arbitration on the following issues:

1. Is the matter grievable?

2. If so, is the Employer's refusal to negotiate regarding the Union's proposal on contracting out violative of the parties' Agreement?

Id. at 2.

Before the Arbitrator, the Agency argued that the grievance was not arbitrable because it involved a negotiability determination that, under 5 C.F.R. § 2423.5, must be decided by the Authority.(2) The Agency maintained that if the only issue to be resolved was whether the proposal was within the duty to bargain, the Arbitrator had no authority to resolve it.

The Union argued that the instant proceeding "involve[d] a refusal to negotiate as to a matter that is in the Agreement, is an unfair labor practice (ULP) under 5 U.S.C. [§] 7106 and that a ULP can be processed as a grievance." Id. at 5. The Union also maintained that resolution of the grievance did not involve a negotiability determination but instead involved an interpretation of the parties' collective bargaining agreement. The Union asserted that by executing the MOU, the Agency had agreed to negotiate over the subjects set forth in section 7106(b)(1) -- which govern the methods and means of performing work and encompass contracting out.

The Arbitrator rejected the Agency's assertion that the grievance was not arbitrable. In reaching this result, the Arbitrator determined that the arbitrability issue was resolved by determining whether the disputed proposal presented a negotiability issue or whether it was encompassed by the parties' bargaining agreement. The Arbitrator found that Article 30, section 1, of the agreement sets forth a procedure governing the Union's involvement in contracting out under OMB Circular A-76. The Arbitrator then found that the disputed proposal would "permit[] the Union to negotiate, as permitted by law." Id. at 12. In the Arbitrator's view, "[n]either the existing provision or the [Union's] proposal limit [the Agency's] right to decide on whether it will contract out . . . ." Id. at 13 (emphasis omitted).

In addition, the Arbitrator found that under Executive Order 12871, as well as guidance from the Office of Personnel Management (OPM), Federal agencies are required to bargain over matters covered by section 7106(b)(1). Therefore, based on the Executive Order, OPM guidance, and the parties' MOU, the Arbitrator concluded that "matters relating to the procedures involved in contracting out, which involve[] the methods, means and technology of performing the [Agency's] mission, are proper subjects for negotiations between these parties." Id. at 14.

The Arbitrator next addressed the Union's claim that the Agency's conduct constituted a breach of the parties' bargaining agreement. In this connection, the Arbitrator found:

[w]here, as here, the evidence establishes that the proposal involving Article 30, [s]ection 1, involves a matter under section 7106(b)(1) that the [Agency] has previously covered under the current Agreement, an area in which it agreed to bargain and one that does not interfere with a reserved right to make decisions, then it follows that the refusal was a violation of the parties' Agreement which provided for negotiations "concerning the procedures which Management will observe in exercising its authority" and also of the MOU[.]

Id. at 16.

Based on the foregoing, the Arbitrator determined that the Union's proposal was "no more than embellishments of existing provisions; . . . fall[s] within 5 U.S.C. [§] 7106(b)(1), an area as to which the [Agency] has agreed to bargain in the MOU and has covered in the current Agreement, and the provisions do not result in an interference with [its] ability to exercise its reserved [m]anagement rights under 5 U.S.C. [§] 7106(a)." Id. at 18. Accordingly, the Arbitrator concluded that the Agency's failure and refusal to bargain over the Union's proposal constituted a breach of the parties' bargaining agreement.

III. Exceptions

A. Agency's Contentions

The Agency asserts that the grievance was not arbitrable because it concerned a question of negotiability that, based on the plain language of section 7117(c) of the Statute and its implementing Regulations, may only be resolved by the Authority. According to the Agency, its determination that the Union's proposal was not within the duty to bargain was made during negotiations for a new agreement.(3) Therefore, the Agency maintains that the Union should have filed a negotiability appeal rather than a grievance.

With regard to the merits of the Union's proposal, the Agency asserts that the proposal is outside the duty to bargain because section 7106(a)(2)(B) reserves for management the authority to make decisions regarding contracting out and this subject is not within the scope of bargaining if a proposal interferes with management's internal deliberative process.

Assuming that the proposal does not restrict management decision-making, the Agency argues that it remains beyond the scope of bargaining because it would permit the Union to control cost analysis studies and make recommendations as to whether Agency work could be completed more efficiently in-house. Finally, the Agency maintains that the proposal would give the Union the right to arbitrate over compliance with OMB Circular A-76. Therefore, pursuant to both Authority and judicial precedent, the Agency asserts that the proposal is beyond the scope of bargaining.

B. Union's Opposition

As a threshold matter, the Union asserts that under section 2425.1(b) of the Authority's Regulations, exceptions to an arbitration award must be filed within 30 days "beginning on the date the [a]ward is served on the filing party[.]" Opposition at 1 (emphasis in original). The Union further asserts that in this case, the Agency's exceptions were not filed until 30 days after the award was issued. As such, the Union claims that the Agency's exceptions are untimely and should therefore be dismissed.

The Union also claims that the Agency's reliance on section 2423.5 of the Authority's Regulations is misplaced because it pertains to issues which "solely involve an [a]gency's allegation that the duty to bargain in good faith does not extend to the matter proposed to be bargained." Id. at 2 (quoting section 2423.5). The Union argues that the issues in this case do not concern negotiability but instead concern actual or contemplated changes in conditions of employment, an interpretation of the parties' bargaining agreement, and an unfair labor practice charge that was processed as a grievance.

Finally, the Union points to the MOU and argues that by executing that document the Agency agreed to negotiate over the subjects set forth in section 7106(b)(1) of the Statute. The Union, therefore, submits that since contracting out involves the methods or means of performing work, the Arbitrator correctly concluded that its proposal was within the duty to bargain.

IV. Analysis and Conclusions

A. The Agency's Exceptions Were Filed Timely

In its opposition to the Agency's exceptions, the Union claims that the exceptions were not filed timely. However, our review of the record shows that this claim is unfounded.

The time limit for filing exceptions to an arbitration award is 30 days beginning on the date the award is served on the filing party. 5 C.F.R. § 2425.1(b). The date of service is the date the arbitration award is deposited in the U.S. mail or is delivered in person. 5 C.F.R. § 2429.27(d). If the award is served by mail, 5 days are added to the period for filing exceptions. 5 C.F.R. § 2429.22. Further, the last day of the period so computed is to be included unless it is Saturday, Sunday, or a Federal legal holiday, in which case the period shall run until the end of the next day which is not a Saturday, Sunday, or a Federal legal holiday. 5 C.F.R. § 2429.21(a); see also United States Department of Justice, Bureau of Prisons, Metropolitan Correctional Center, New York, New York, 25 FLRA 102 (1986) (Metropolitan Correctional Center) (explaining the procedure for computing time periods).

In this case, the Arbitrator's award was served on the parties by mail on September 19, 1997. Therefore, applying the rules for calculating the timeliness of documents filed with the Authority, the Agency's exceptions had to be either postmarked by the U.S. Postal Service or received by the Authority no later than October 27, 1997. 5 C.F.R. §§ 2429.17, 2429.21 and 2429.22. See Metropolitan Correctional Center, 25 FLRA at 102-03. The Agency's exceptions were filed on October 22, 1997, and, therefore, were filed timely.

B. The Arbitrator Correctly Determined that the Grievance was Arbitrable

As an initial matter, the Agency argues that the Arbitrator erred in finding that the instant grievance was arbitrable. In particular, the Agency claims that because its refusal to bargain over the Union's proposal was premised on the belief that the proposal was outside the duty to bargain, the grievance involved a negotiability determination that, under section 7117(c) and 5 C.F.R. § 2423.5, can only be made by the Authority. We construe the Agency's argument as a claim that the award is contrary to 5 C.F.R. § 2423.5 because the Arbitrator made a negotiability determination that only the Authority is authorized to resolve.

As the Agency's contention challenges the award's consistency with a regulation, we review the 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) (NTEU, Chapter 24).

In Louis A. Johnson Veterans Administration Medical Center, Clarksburg, West Virginia and American Federation of Government Employees, Local 2384, 15 FLRA 347 (1984) (Louis A. Johnson), the Authority held that negotiability disputes which arise between an agency and an exclusive representative under section 7117(c) must be resolved only by the Authority as required by section 7105(a)(2)(E) and that such disputes may not be resolved by an arbitrator in the guise of a grievance.(4) The Authority further held, however, that "disputes relating to the meaning and application of provisions of the parties' collective bargaining agreement, including provisions therein dealing with the obligation to bargain, are subject to resolution under the negotiated grievance procedure and a negotiability appeal is not the proper forum in which to resolve such disputes." Id. at 350. Accordingly, grievance arbitrators may consider "the collateral issue of the obligation to bargain" in the course of resolving a grievance as long as their conclusions are "consistent with the Statute and relevant decisions of the Authority . . . ." Id. at 351.

In this case, the Union alleged, and the Arbitrator found, that the Agency's refusal to bargain over its proposal violated the parties' MOU because the subject of the proposal -- contracting out -- concerns the methods and means of performing work under section 7106(b)(1). The Agency's exceptions do not challenge the Arbitrator's interpretation of the MOU. Rather, the Agency maintains that contracting out is a management right encompassed by section 7106(a).

We conclude, in the circumstances presented, that the issue of whether the Union's proposal concerns a subject that is encompassed within section 7106(b)(1) is collateral to whether the Agency's refusal to bargain violated the parties' MOU. Therefore, consistent with well-settled Authority precedent as set forth in Louis A. Johnson, we find that the Arbitrator correctly determined that the instant grievance was arbitrable.

C. The Arbitrator Incorrectly Determined that the Union's Proposal Concerns a Methods and Means of Performing Work

Although the Arbitrator was not precluded from considering the collateral issue of the obligation to bargain in the course of resolving the grievance, he was required to arrive at a determination that is consistent with the Statute and relevant Authority precedent. U.S. Department of the Air Force, HQ Air Force Materiel Command and American Federation of Government Employees, Council 214, 49 FLRA 1111, 1119 (1994); Louis A. Johnson, 15 FLRA at 351. The Agency argues in this regard that, assuming the grievance was arbitrable, the award is nevertheless contrary to law because the Union's proposal interferes with its rights under section 7106(a)(2)(B) to make determinations regarding contracting out and to determine the personnel by which agency operations will be conducted.

Section 7122(a)(1) of the Statute provides in pertinent part that an arbitration award will be found deficient if it conflicts with any law, rule or regulation.

As the Agency's exceptions involve the award's consistency with law and regulation, these questions must be reviewed de novo. NTEU, Chapter 24.

As noted above, the Agency argues that the Union's proposal affects its management rights under section 7106(a)(2)(B) of the Statute. The Union did not specifically respond to the Agency's argument. Rather, the Union argues that the Agency bound itself to negotiate over the subjects set forth in section 7106(b)(1) when it executed the MOU. Therefore, the Union asserts that the proposal is within the duty to bargain because it concerns the "methods and means of performing work" which falls within that section.

There are two prongs to the Authority's current test used to determine whether a proposal concerns the methods and means of performing work. First, the proposal must concern a "method" or "means" as defined by the Authority. In this regard, the Authority construes the term "method" to refer to "the way in which an agency performs its work." International Federation of Professional and Technical Engineers, Local 49 and U.S. Department of the Army, Army Corps of Engineers, South Pacific Division, San Francisco, California, 52 FLRA 813, 818 (1996) (emphasis added). The term "means" refers to "any instrumentality, including an agent, tool, device, measure, plan, or policy used by an agency for the accomplishment or furtherance of the performance of its work."(5) Id. Second, it must be shown that (1) there is a direct and integral relationship between the particular methods or means the agency has chosen and the accomplishment of the agency's mission; and (2) the proposal would directly interfere with the mission-related purpose for which the method or means was adopted. See, e.g., Association of Civilian Technicians, Arizona Army Chapter 61 and U.S. Department of Defense, National Guard Bureau, Arizona National Guard, 48 FLRA 412, 420 (1993).

Applying Prong I, we note that the Union submits that the proposal concerns the methods and means of performing work, but does not provide any further elaboration and cites no authority to support this proposition. Moreover, our review of Authority precedent fails to provide a basis on which to sustain it. In this connection, proposals concerning contracting out do not relate to the way in which an agency performs its work or the tools or devices that may be used in accomplishing it. Rather, such proposals relate to an agency's decision-making process concerning by whom the work is best performed -- either in-house by agency employees or by employees of an outside organization.(6) In addition, the Union has cited no Authority decisions in which proposals concerning contracting out have been found to be a methods and means of performing work within the meaning of section 7106(b)(1). Accordingly, we reject the Union's claim that the proposal is encompassed within the meaning of section 7106(b)(1).(7)

In view of the foregoing, we find that the Arbitrator erred in determining that the Union's proposal was a "methods and means" of performing work within the meaning of section 7106(b)(1). As such, we conclude that his decision, in which he determines that the Agency violated the parties' agreement by refusing to bargain over a section 7106(b)(1) matter, is deficient.(8) We, therefore, find that the Arbitrator's decision must be set aside.

V. Decision

The award is set aside.


APPENDIX

ARTICLE 30

CONTRACTING OUT

Section 1. Procedures for Contracting Out

The Employer agrees that the mission of the Agency with the Union's support is to service our clients, protect our employees, and to provide the necessary services in a most efficient and cost effective method.

A. Before the Employer proposes to contract out any Agency's work in any organizational subdivisions in which AFGE holds exclusive recognition, the National Council President and the Regional Vice President(s) in the region(s) affected will be notified in writing and offer the Union the opportunity to negotiate in accordance with 5 U.S.C. 7106(b) of the Federal Labor Relations Statute.

B. The Parties will observe the timeframes outlined in Article 8 of the National Agreement.

C. If the contracting out is pursuant to OMB Circular A-76, the procedure outlined in it will be followed. The Union will be notified by the Employer and allowed to participate and provide input in ways which the organization can contain costs. Such input will include but is not limited to, the abolishment of vacant positions, changes in work schedules, and modifications in the operations under study that would lead to cost reduction.

Section 2. Current Contracting Out

A. In all organizational segment(s) in AFGE bargaining unit where contracting out is presently being performed, the Union will be responsible for performing a cost analysis study.

B. If the study reveals that it is more cost efficient to perform the work in-house, the Union will notify the Employer of its finding and allow the Agency an opportunity to take the necessary actions to see if it can be accomplished.




FOOTNOTES:
 

1. The full text of the proposal is set forth in the Appendix to this memorandum.

2. Section 2423.5 of the Authority Regulations provides, as relevant here:

Cases which solely involve an agency's allegation that the duty to bargain in good faith does not extend to the matter proposed to be bargained and which do not involve actual or contemplated changes in conditions of employment may only be filed under part 2424 of the subchapter.

3. Section 7117(c)(1) provides:

Except in any case to which subsection (b) of this section applies, if an agency involved in collective bargaining with an exclusive representative alleges that the duty to bargain in good faith does not extend to any matter, the exclusive representative may appeal the allegation to the Authority in accordance with provisions of this subsection.

4. Section 7105(a)(2)(E) provides:

The Authority shall, to the extent provided in this chapter and in accordance with regulations prescribed by the Authority . . . resolves issues relating to the duty to bargain in good faith under section 7117(c) of this title[.]

5. Although contracting out could be viewed as a "policy" under this definition, we note that the legislative history of the Statute explicitly indicates that an agency's general policy was not intended to be encompassed by this term. See Civil Service Reform Act of 1978: Conference Report, H.R. Rep. No. 95-1717, 95th Cong., 2d Sess. 154 (1978), reprinted in Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, H.R. Comm. Print No. 96-7, 96th Cong., 1st Sess. 793, 822 (1979) (Legislative History) (where it is stated that by including the language "methods and means," "[i]t is not intended that agencies will discuss general policy questions determining how an agency does its work.")

6. This view is supported by the legislative history of the Statute which indicates that the term "methods" was intended to mean "how" the work is performed; the term "means" was intended to mean "with what"; and the term "personnel" was intended to mean "by whom" agency operations would be conducted. See Legislative History at 108-09.

7. Pursuant to this determination, we do not need to assess whether the proposal would satisfy Prong II of the Authority's test. See National Federation of Federal Employees, Local 7 and U.S. Department of Agriculture, Office of Rural Development, Portland, Oregon, 53 FLRA 1435, 1438 n.3 (1998) (NFFE Local 7) (Authority stated that it would leave for an appropriate case or other proceeding an examination of issues concerning the continued viability of this test). As in NFFE Local 7, neither party in the instant proceeding has requested that the Authority re