American Federation of Government Employees, Locals 3807 and 3824 and U.S. Department of Energy, Western Area Power Administration, Golden, Colorado

[ v55 p1 ]

55 FLRA No. 1      

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCALS 3807
AND 3824
(Union)

and

U.S. DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
GOLDEN, COLORADO
(Agency)

0-NG-2391

_____

DECISION AND ORDER ON
NEGOTIABILITY ISSUES

December 17, 1998

_____

Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members.

I. Statement of the Case

      This case is before the Authority on a petition for review of negotiability issues filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). The petition for review concerns four proposals that the Agency declared outside the duty to bargain. All of the proposals concern the use of compensatory time and the payment of overtime to employees.

      For the reasons that follow, we find that the proposals are within the duty to bargain.

II. Background

      The Union submitted the proposals in response to the issuance of Department of Energy Order O 322.1 (the Order), which states in pertinent part:

Paragraph 4 (b). Unless precluded by an existing provision in a negotiated bargaining agreement or justified in writing authorizing extension of the time period due to exigent circumstances, compensatory time not taken within 26 pay periods will be forfeited.

      Prior to the Order, compensatory time not used within 26 pay periods was converted to overtime compensation. The Order applies only to FLSA exempt employees. Union Exhibit A to Exceptions; compare 5 C.F.R. § 550.114(c) (permitting forfeiture of exempt employees' comp time) with 5 C.F.R. § 551.531(d) (requiring that non-exempt employees who forfeit compensatory time be paid overtime).

III. Proposals 1 and 2

Proposal 1

The forfeiture of compensation for time worked is an unacceptable change in working conditions. WAPA should refuse to follow the DOE suggestion.

Proposal 2

The continued payment for compensatory time not taken within twenty-six pay periods is acceptable.

A. Positions of the Parties

1. The Agency

      The Agency asserts that Proposals 1 and 2 are outside the duty to bargain for three reasons.

      First, the Agency argues that the proposals conflict with 5 C.F.R. § 550.114(d). [n1] According to the Agency, although the regulation "grants a right to establish a time period for use of compensatory time and for its forfeiture after expiration of the time limit[,]" a proposal that provides for no time limit is outside the duty to bargain. Statement of Position at 2 (citing American Federation of Government Employees, Local 3488 and Federal Deposit Insurance Corporation, 12 FLRA 532 (1983) (FDIC)).

      Second, the Agency asserts that the proposals are outside the duty to bargain because they conflict with an Agency regulation--the Order--for which the Agency asserts a compelling need. The Agency maintains that it put the Order into effect in response to a General Accounting Office (GAO) study, which concluded that the Agency was spending too much money for overtime payments to employees who did not use compensatory time within 26 pay periods. The Agency asserts that it implemented the Order in response to GAO's "specific recommendation that the [A]gency eliminate payments for unused compensatory time after a specified time[.]" [ v55 p2 ] Statement of Position at 5 (citing 5 C.F.R. § 2424.11(a)). According to the Agency, "[i]mplementation of [the Order] will provide for effective management of and reduction of overtime costs and will improve the efficiency of agency operations by eliminating the requirement for overtime payments." Id.

      Third, the Agency asserts that the proposals affect management's right to determine its budget under section 7106(a)(1) of the Statute. According to the Agency, "[t]he [O]rder implements [GAO's recommendation] under the [A]gency's right to determine its budget as authorized by 5 U.S.C. Section 7106(a)(1), and complies with the congressional mandate of 5 U.S.C. Section 7101(b) that such actions be taken in a manner consistent with the requirement of an effective and efficient Government." Id. at 5.

2. The Union

      The Union argues that the Agency's reliance on 5 C.F.R. § 550.114(d) is misplaced because "[t]he word 'may' clearly indicates that [fixing a time limit] is permissive and therefore bargainable." Response at 2. Additionally, the Union claims that 5 C.F.R. § 550.114(d) conflicts with the requirement in 5 C.F.R. § 550.112(a)(1) of payment for all overtime worked. The Union states, without elaboration, that 5 U.S.C. § 5542 resolves this conflict in favor of requiring that employees be paid for all overtime. [n2] Id.

      The Union also disputes the Agency's assertion that there is a compelling need for the Order. In particular, the Union argues that the Order is not essential to the accomplishment of the Agency's mission; that the Order is not necessary for the maintenance of merit systems principles; and that no outside authority mandated the Order.

      Finally, the Union asserts that the proposals do not interfere with management's right to determine its budget. According to the Union, the Agency should schedule and plan work more efficiently and effectively so that less overtime is necessary.

B. Meaning of the Proposals

      Proposal 1 states that the proposed change mandating the forfeiture of compensatory time not taken within 26 pay periods is unacceptable to the Union. Proposal 2 states that the continuing practice of paying overtime for compensatory time not used within 26 pay periods would be acceptable. The proposals would preserve the payment of overtime and preclude forfeiture of compensatory time.

C. Analysis and Conclusions

1. The Proposals Do Not Conflict with 5 C.F.R. § 550.114(d).

      The Agency argues that the proposals conflict with 5 C.F.R. § 550.114(d) because the regulation requires the Agency to establish a time period for using compensatory time, after which there is no right to the compensatory time or to overtime pay.

      Section 550.114(d), a Government-wide regulation, states that the department head "may fix a limit" for use of compensatory time and "may provide" that the employee loses the right to compensatory time or overtime after that period. Thus, as plainly worded, the regulation permits, but does not require, the department head to fix a time limit for the use of compensatory time and to require forfeiture of compensatory time after that limit has expired. That is, the regulation affords the Agency discretion to take these steps. [n3]  The Agency has not demonstrated that the regulation should be interpreted to mean something other than what it plainly states. As such, the Agency has not shown that the proposals' requirement that there be no forfeiture of compensatory time conflicts with section 550.114(d).

      The Agency relies on FDIC as support for its claim that a proposal providing for no time limit on the use of compensatory time or forfeiture of compensatory time is outside the duty to bargain. However, FDIC does not support the Agency's argument. In FDIC, the Authority considered the negotiability of two proposals establishing time limits for the use of compensatory time. The Authority determined that both proposals were within the duty to bargain because the agency's discretion under the regulation applicable in that case could be exercised through negotiation. [n4] FDIC did not address the elimination of time limits, and thus, does not [ v55 p3 ] support the Agency's argument that it has discretion only to establish and not to eliminate time limits for the use of compensatory time. See FDIC, 12 FLRA at 533-34.

      Accordingly, the proposals are not inconsistent with 5 C.F.R. § 550.114(d).

2. The Proposals Do Not Conflict with an Agency-wide Regulation for Which There Is a Compelling Need.

      The Agency also asserts that Proposals 1 and 2 are outside the duty to bargain because they conflict with an Agency regulation--the Order--for which there is a compelling need. In order to demonstrate that a proposal is outside the duty to bargain because it conflicts with an agency regulation, an agency must: (1) identify a specific agency-wide regulation; (2) show that there is a conflict between its regulation and the proposal; and (3) demonstrate that its regulation is supported by a compelling need within the meaning of section 2424.11 of the Authority's Regulations. [n5]  See American Federation of Government Employees, Local 3824 and U.S. Department of Energy, Western Area Power Administration, Phoenix, Arizona, 52 FLRA 332, 336 (1996); Coordinating Committee of Unions and Department of the Treasury, Bureau of Engraving and Printing, 29 FLRA 1436, 1441 (1987).

      With respect to the first requirement, there is no dispute that Department of Energy Order O 322.1 § 4(b) is an Agency-wide regulation. With respect to the second requirement, a conflict between the Order and the proposals arises from the fact that the Order requires forfeiture of compensatory time, and the proposals preclude forfeiture.

      With regard to the third requirement, the Agency asserts that there is a compelling need for the Order within the meaning of section 2424.11(a) of the Authority's Regulations. The Agency asserts that the Order would make the Agency more effective and efficient because GAO concluded that without the Order the Agency "paid employees an additional $490,357 for 23,092 hours of unused compensatory time in 1993." Statement of Position at 6. However, even if the Order would result in a savings of $490,357, the Agency has not demonstrated that such a savings is essential to its mission. Certainly, the savings would be desirable or helpful. Nevertheless, section 2424.11(a) requires the Agency to demonstrate that its regulation is essential, not just desirable or helpful. [n6] This requirement has not been satisfied here.

      Accordingly, we find that there is no compelling need for the Agency's regulation.

3. The Proposals do not Affect Management's Right to Determine its Budget.

      In American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604 (1980), aff'd as to other matters sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied, 455 U.S. 945 (1982) (Wright-Patterson), the Authority set forth the two-part test used to assess whether a proposal directly interferes with management's right to determine its budget under section 7106(a)(1) of the Statute. See also National Association of Government Employees, Local R14-52 and U.S. Department of the Army, Red River Dept, Texarkana, [ v55 p4 ] Texas, 48 FLRA 1198, 1207-08 (1993) (restating the Wright-Patterson test). Under the first part of the test, a proposal that prescribes either the particular programs to be included in the Agency's budget, or the amount to be allocated in the budget, would affect the Agency's right to determine its budget. Under the second part of the test set forth in Wright-Patterson, where an agency makes a substantial demonstration that an increase in costs is significant and unavoidable and is not offset by compensating benefits the Authority will find that a proposal affects an agency's right to determine its budget. [n7] 

      Applying the first part of the Wright-Patterson test, there is no contention that the proposals in this case "prescribe particular programs, operations, or amounts to be included in an agency's budget." Applying the second part of the test, the Agency has argued that the proposal will result in increased costs. However, the Agency has neither asserted nor established that this increase in costs "is significant and unavoidable and is not offset by compensating benefits[.]" Wright-Patterson, 2 FLRA at 608. [n8]  As neither part of the test under which a proposal may be found to affect management's right to determine its budget has been satisfied, the proposals do not affect this right.

      Based on the foregoing, we conclude that the proposals are within the duty to bargain because they do not conflict with Government-wide regulation or an Agency regulation for which there is a compelling need, and because they do not affect management's right to determine its budget under section 7106(a) of the Statute.

IV. Proposal 3

The decision to request compensatory time off in lieu of overtime is a decision to be made by the employee who is working the overtime. This is not a decision which the managers within the agency should be making.

A. Positions of the Parties

1. The Agency

      The Agency asserts that to the extent that this proposal affects employees whose pay exceeds the base rate for GS-10, the proposal is outside the duty to bargain because it conflicts with 5 C.F.R. § 550.114(c). [n9]  The Agency states that "[t]he [U]nion's proposal, by placing the decision exclusively with the employee, conflicts with the discretion placed in the head of an agency to grant comp time in lieu of overtime[.]" Statement of Position at 3.

2. The Union

      The Union states, without elaboration, that the Agency's reliance on section 550.114(c) is misplaced because the regulation "is the result of the rule making process and in this case is contrary to law." Response at 2.

B. Meaning of the Proposal

      The plain wording of the proposal provides that an employee, rather than a manager, would decide whether the employee would receive compensatory time or overtime pay for overtime worked. This is consistent with the Union's statement that the proposal would allow an employee who works overtime to determine whether to receive compensatory time or overtime pay.

C. Analysis and Conclusions

      The Agency argues that the proposal conflicts with 5 C.F.R. § 550.114(c), which provides that the agency head "may" order compensatory time, rather than overtime pay, for employees paid above the maximum rate for GS-10. [n10]  Although the regulation provides the Agency with discretion as to these employees, it does not provide the Agency with sole and exclusive discretion. The Authority has explained that when an agency asserts that a regulation provides it with sole and exclusive discretion over a matter, the Authority will examine the plain wording and regulatory history to determine whether requiring the Agency to bargain over an issue would be contrary to the regulation. Cf. International Association of Machinists and Aerospace Workers, Franklin Lodge, No. 2135 and U.S. Department of the Treasury, Bureau of Engraving and Printing, 50 FLRA [ v55 p5 ] 677, 691 (1995), aff'd mem. sub nom. Department of Treasury v. FLRA, 88 F.3d 1279 (D.C. Cir. 1996) ("[w]here law or applicable regulation vests an agency with sole and exclusive discretion over a matter, it would be contrary to law to require that discretion to be exercised through collective bargaining"); see also Patent Office Professional Association and U.S. Department of Commerce, Patent and Trademark Office, 53 FLRA 625, 648 (1997) (negotiation over the exercise of agency discretion is outside the duty to bargain when a law or regulation provides that the discretion may be exercised only by the agency).

      The plain wording of the regulation states that "[t]he head of an agency may provide" for compensatory time rather than overtime payment for employees paid above the maximum rate for GS-10. 5 C.F.R. § 550.114(c). The regulation does not indicate in any way that the discretion it affords the agency head is sole and exclusive. Further, the Agency does not provide any other basis for interpreting the regulation as granting sole and exclusive discretion to the head of the agency. Thus, we conclude that the Agency may exercise its discretion through negotiation and it may agree to allow individual employees to elect overtime rather than compensatory time. See also 5 U.S.C. § 5543(a)(2); National Association of Government Employees, Federal Union of Scientists and Engineers, Local R1-144 and U.S. Department of the Navy, Naval Underwater System Center, Newport, Rhode Island, 42 FLRA 730, 757 (1991) (a proposal allowing bargaining unit members to choose between overtime and compensatory time is consistent with the precursor of section 550.114(c), and is thus within the duty to bargain.)Based on the foregoing, we find that this proposal is not contrary to 5 C.F.R. § 550.114(c). As no other grounds are argued by the Agency, the proposal is within the duty to bargain.

V. Proposal 4

When authorized by pending legislation, WAPA will initiate a policy of allowing exempt employees to cho[o]se to take compensatory time off at a rate of 1½ hours off for each hour of overtime worked.

A. Positions of the Parties

1. The Agency

      The Agency asserts that the proposal is contrary to 5 C.F.R. § 550.114(c). The Agency argues that the regulation states that exempt employees "are entitled to be compensated for 'occasional overtime work with an equivalent amount of compensatory time off.'" [n11]  Statement of Position at 3 (emphasis added by Agency).

      The Agency also argues that the proposal is outside the duty to bargain because "[t]o the extent that the union proposal i[s] contingent upon a prospective and uncertain change to the law, [the Agency] believes that it is not obligated to bargain over such a speculative proposal at this time." Id.

2. The Union

      The Union responds by quoting the requirement in 5 C.F.R. § 551.531(c) that an "agency may not require that an employee be compensated for overtime work under this subpart with an equivalent amount of compensatory time[.]" Response at 3 (quoting 5 C.F.R. § 551.531(c)).

      Additionally, the Union argues that "[t]he agency must not be allowed to delay implementation of any new or proposed legislation which may be favorable to the employees." Id.

B. Meaning of the Proposal

      The plain wording of the proposal provides that when the Agency is "authorized" to do so by the passage of "pending legislation," the Agency will allow unit members to receive 1.5 hours of compensatory time for every hour of overtime worked. The Union does not identify the legislation to which the proposal refers. Consistent with the Union's statement of intent, we construe the proposal to mean that, if legislation permitting the Agency to agree to provide 1.5 hours of compensatory time for every hour of extra work is enacted, then the Agency in accordance with the legislation would grant 1.5 hours of compensatory time for every one hour of overtime worked. The proposal would also require the Agency to institute such a policy without delay.

C. Analysis and Conclusions

      Proposals that incorporate existing statutory standards into agreements are within the duty to bargain. National Treasury Employees Union, Chapters 213 and 228 and United States Department of Energy, Washington, D.C., 32 FLRA 578, 581 (1988). Proposal 4, which incorporates future statutory standards, would appear to fall within the principle that a proposal may require management to take action in accordance with law. No [ v55 p6 ] basis is asserted that this principle should not be applied in this case.

      This proposal is not contrary to law because it would apply only if legislation consistent with the wording of the proposal is signed into law. Accordingly, we find that the proposal is within the duty to bargain.

VI. Order

      The Agency shall, upon request, or as otherwise agreed to by the parties, negotiate over Proposals 1, 2, 3, and 4.






Footnote # 1 for 55 FLRA No. 1

   5 C.F.R. § 550.114(d) provides in pertinent part:

(d) The head of a department may fix a time limit for an employee to request or take compensatory time off and may provide that an employee who fails to take compensatory time off to which he is entitled . . . before the time limit fixed, shall lose his right both to compensatory time off and to overtime pay unless his failure is due to an exigency of the service beyond his control.

Footnote # 2 for 55 FLRA No. 1

   5 U.S.C. § 5542 provides overtime rates and the method of computation.


Footnote # 3 for 55 FLRA No. 1

   An agency is required under the Statute to bargain to the extent of its discretion, provided that its discretion is not sole and exclusive. See Patent Office Professional Association and U.S. Department of Commerce, Patent and Trademark Office, 53 FLRA 625, 682 (1997); International Association of Machinists and Aerospace Workers, Franklin Lodge No. 2135 and U.S. Department of the Treasury, Bureau of Engraving and Printing, 50 FLRA 677, 691-92 (1995). The Agency has not asserted that its discretion under section 550.114(d) is sole and exclusive.


Footnote # 4 for 55 FLRA No. 1

   In FDIC, the Authority found that the proposals did not conflict with Federal Personnel Manual chapter 550, subchapter 1-3.d.(3), which, like 5 C.F.R. § 550.114(d), provided that an agency head could "fix a time within which compensatory time off is to be requested or taken." FDIC, 12 FLRA at 533.


Footnote # 5 for 55 FLRA No. 1

   5 C.F.R. § 2424.11 provides:

A compelling need exists for an agency rule or regulation . . . when the agency demonstrates that the rule or regulation meets one or more of the following illustrative criteria:

(a) The rule or regulation is essential, as distinguished from helpful or desirable, to the accomplishment of the mission or the execution of functions of the agency or primary national subdivision in a manner which is consistent with the requirements of an effective and efficient government.

(b) The rule or regulation is necessary to insure the maintenance of basic merit principles.

(c) The rule or regulation implements a mandate to the agency or primary national subdivision under law or other outside authority, which implementation is essentially nondiscretionary in nature.

Footnote # 6 for 55 FLRA No. 1

   The Agency's argument could also be construed as an assertion under subsection (c) of the Authority's Regulations that there is a compelling need for the regulation. In this regard, the Agency contends that the Order implements an essentially nondiscretionary mandate from GAO. However, GAO recommendations are not binding. A GAO recommendation requires only that the agency report to the GAO on "'actions taken,' which can range from full compliance to zero." 1 United States General Accounting Office, Principles of Federal Appropriations Law Chapter 1, § D.4.b. (2d. ed. 1991). See also 31 U.S.C. § 720 (an agency's obligation after receiving a recommendation from the Comptroller General is to submit a report explaining what action was taken). The Agency has not shown that the GAO recommendation constitutes a nondiscretionary mandate. Thus, we find that the Agency's argument, even if construed under subsection (c), does not demonstrate a compelling need for the Order.


Footnote # 7 for 55 FLRA No. 1

   In applying the second part of this test, the Authority does not consider nonmonetary intangible benefits such as positive effects on employee morale. See National Treasury Employees Union and U.S. Nuclear Regulatory Commission, 47 FLRA 980 (1993).


Footnote # 8 for 55 FLRA No. 1

   With regard to the savings that the Order would provide to the Agency, see supra Part II.D.2.


Footnote # 9 for 55 FLRA No. 1

   5 C.F.R. § 550.114(c) provides in pertinent part:

(c) The head of an agency may provide that an employee whose rate of basic pay exceeds the maximum rate for GS- 10 . . . shall be compensated for irregular or occasional overtime work with an equivalent amount of compensatory time off from the employee's tour of duty instead of payment under § 550.113 of this part.