File 3: Opinion of Member Wasserman
[ v55 p826 ]
Opinion of Member Wasserman, dissenting in part:
I agree with much of the foregoing decision, but dissent with respect to the assessment of the Union's exception regarding the timeliness of nine of the grievances. I believe that the Union has raised a contrary to law argument, and that the FLSA and our decision in FDIC dictate that we grant the exception and find the grievances to be timely.
Although the Union certainly raises an essence claim pertaining to the timeliness issue, Unions Exceptions at 10, it also puts the legality of the timeliness determination before us. In particular, the Union states that "if the Union is correct and the statute provides the limitation period, then the grievants who [the Arbitrator] found untimely for backpay purposes would be entitled to backpay/overtime." Union's Exceptions at 4. [n1] This argument is underscored by the Union when it states that, "The time limits for filing for a violation of the statute and regulations is set by Congress and cannot be curtailed by either the agency or the Union." Id. at 9. These contentions place the timeliness issue in the context of the appropriate legal standard, not just contract language.
In addition, the Union argues that the Barring Act, with its six year limitations period should apply to arbitration. The Union states that the "[A]rbitrator stands in the shoes of other judicial/administrative bodies under Carter, the statute of limitations applicable under the regulations for filing claims against the government becomes applicable here." Id. at 7. Carter v. Gibbs required unions to take overtime claims through the grievance procedure, instead of to court. This was based upon the Federal Circuit's view that the Statute made the grievance/arbitration process the exclusive procedure for the resolution of work-related claims. In 1994, Congress amended section 7121(a)(1) to clarify that grievance procedures were the exclusive administrative procedures available to resolve grievances, thereby making it clear that overtime claims could still be filed in court. Regardless of the unions' and employees' option to take claims into court, I do not question the general proposition that an arbitrator in the federal sector stands in the shoes of the court whenever application of a law is the subject of the arbitration. Devine v. White, 697 F.2d 421, 438 (D.C. Cir. 1983) (federal sector arbitrators "police compliance with controlling laws, rules, and regulations"); Louis A. Johnson Veterans Administration Medical Center, Clarksburg, West Virginia and American Federation of Government Employees, Local 2384, 15 FLRA 347, 350 (1984) (because of the Authority's role in reviewing arbitration awards for consistency with law, "an arbitrator must perforce consider any relevant law, rule or regulation when fashioning a grievance arbitration award in the Federal sector"). Cf. Alexander v. Gardner-Denver Co. 415 U.S. 36, 53 (1973)(labor arbitrators [outside the federal sector] lack the "general authority to invoke public laws that conflict with the bargain between the parties").
The Union did not have the benefit of our decision in FDIC when it filed its exceptions, so it is fair to generalize its argument from the Barring Act to the FLSA - clearly the Union is stating that as a matter of law, and based upon the well established notion that Arbitrators are to apply law in the same manner as a court, the limitations period should apply in the context of arbitration. The Agency acknowledges the Union's legal claim when it contends that "if the Union is to be heard to argue that their rights under the FLSA cannot be curtailed by a bargained-for filing period, then they must be held to the statute of limitations provided for in the FLSA itself." Agency Opposition at 7. For these reasons, I view the Union's Exceptions as claiming that the Arbitrator's award as to the timeliness of the grievances is contrary to law.
I would grant the exception because 29 U.S.C.§ 255(a) controls the filing period for FLSA grievances, as well as the recovery period. Such an application is supported, if not compelled, by FDIC. I am unable to reasonably distinguish the recovery period application of section 255(a) from its filing period application. A U.S. district court has described the workings of section 255 as follows:
Under the FLSA, a cause of action accrues for overtime compensation at each regular payday immediately following the work week during which the services were rendered. [Citations omitted.] Thus, in the present case, plaintiffs' claims for overtime compensation accrued at each payday [ v55 p827 ] after the alleged overtime was worked. As each claim accrued, the 2-year limitations period of § 255 began to run.
Angulo et al. v. The Levy Company et al., 568 F. Supp. 1209, 1215 (USDC N.D. IL, 1983). As each claim accrues, the two year limitations period begins to run. Whether one reaches backward from the filing date for purposes of determining the amount of an award, or looks forward to determine how much time exists to file a claim, the recovery period and filing period are two sides of the same coin.
The Supreme Court has held that arbitration agreements, outside the collective bargaining context, are enforceable as to statutory claims that otherwise have judicial enforcement mechanisms. See e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (Age Discrimination in Employment Act subject to arbitration clause); Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987) (claims under the Securities Exchange Act of 1934 are subject to arbitration clauses); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (antitrust laws subject to arbitration clauses) (Mitsubishi). The agreement to arbitrate claims does not mean that a party relinquishes substantive rights under the statute in question. Mitsubishi, 473 U.S. at 628.
A key question becomes whether the limitations period, for filing purposes, is a substantive right. In FDIC, we answered that question when we stated the following:
29 U.S.C.§ 255(a) is an integral part of the FLSA that operates as a substantive right under that Act. Generally, substantive rights afforded in a statute differ from procedural rights because substantive rights are incorporated into the negotiated grievance procedure. [Citation omitted.] In this respect, statutes of limitations are considered an integral part of the substantive rights afforded by a statute because time limitations on enforcing a statutory right not only bar recovery but extinguish the underlying rights and liabilities of the parties. [Citation omitted.]
FDIC, 53 FLRA at 1490. I recognize that in at least one case the Authority rejected an argument that section 255(a) preempted the negotiated filing period for grievances, U.S. Department of the Army Aviation Center, Fort Rucker, Alabama, 39 FLRA 1113 (1991) (Fort Rucker). However, I cannot avoid the impact of our analysis in FDIC when I assess whether timeliness of an FLSA grievance should be bound by the negotiated grievance time limit. Indeed, footnote 17 of FDIC was drafted in anticipation of the possibility of reversing contrary precedent and a decision on timeliness such as we face here. In particular, we noted that the Authority had previously rejected claims of deficiency "where an arbitrator followed the period limiting the filing of grievances that the parties set in their collective bargaining agreement, rather than the statute of limitations established in section 255(a)" and "point[ed] to the likelihood that this precedent was also wrongly decided." FDIC, 53 FLRA at 1494-95 n.17.
My concurring colleague notes that our opinion on this precedent "did not examine statutory language that may have bearing" on the issue. We were obviously aware of the amendment to section 7121, because we referred to it. See FDIC, 53 FLRA at 1486 n.13. I do not believe that the amendment to section 7121 compels another conclusion from the one I reach here. Moreover, I am unwilling to apply the law in an uneven manner. In FDIC, we ruled that arbitrators may no longer apply the six year recovery period of the Barring Act when awarding back pay to employees. Id. at 1494. While, in FDIC, that decision resulted in the agency having to pay for a longer period of time than required by the award, it prevents arbitrators from now applying the six year limitations period of the Barring Act, [n2] which had been done with some frequency in FLSA cases. See, e.g., U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, 49 FLRA 483, 488-89 (1994) (award granting recovery for six years under the Back Pay Act not deficient) (SSA III); American Federation of Government Employees, Local 22 and U.S. Department of the Navy, Naval Base, Norfolk, Virginia, 48 FLRA 708, 713-14 (1993) (award granting recovery for six years "under pertinent laws and regulations, including the Barring Act" not deficient) (Naval Base); SSA II, 47 FLRA at 829 (award granting recovery for 6 years under the Back Pay Act not deficient).
My colleague now suggests in her concurring opinion that applicable law would prevent unions from recovering up to six years of back pay for bargaining unit employees, but that the limits of the same statutory [ v55 p828 ] provision, 29 U.S.C. § 255(a), could be negotiated downward to the detriment of employees. In my view, the fact that employees may now have recourse to the courts, in addition to the option of grievance/arbitration, does not excuse arbitrators from having to apply the same substantive law as that applied by the courts nor suggest that unions can bargain away substantive rights under FLSA.
Given that the Authority has held that the FLSA limitation period affords substantive protections, I cannot distinguish between the substance of the limitations period and the substance of other protections that are not waivable. My concurring colleague suggests that even though we have said in FDIC that the limitations period is applicable as a matter of law, a union might be able to negotiate a shorter filing or recovery period. Does it follow that the union could also negotiate less than time and a half for overtime for non-exempt employees? I think not. After all, the law is the law, and the ability to vindicate rights in court does not excuse its enforcement in federal sector labor agreements and arbitration. To hold otherwise turns FDIC on its head, because it suggests that last year's precedent regarding the application of 29 U.S.C. § 255(a) is ready to be discarded in all respects except the reduction of the maximum back pay from six to two or three, or even fewer, years. Clearly, such an inequitable application of section 255(a), depending upon the beneficiary, cannot be intended.
In addition, our Statute was designed to establish symmetry in the resolution of cases that could go to more than one forum. For example, removal cases are appealed to the Federal Circuit, regardless of whether they are adjudicated by an arbitrator or the MSPB. Arbitration decisions can be set aside if they are contrary to law, which suggests to me that Arbitrators must apply the law in the same manner as the courts would. When we look at discrimination cases, for example, we apply the interpretive doctrines developed by the courts. See e.g., National Treasury Employees Union and National Treasury Employees Union, Chapter 48 and U.S. Department of the Treasury, Internal Revenue Service, Southeast Region, Richmond District, 54 FLRA 1197 (1998). Accordingly, the availability of court action to FLSA claimants should not affect their substantive rights in arbitration.
Finally, I do not view my conclusion as a deviation from our precedent on procedural arbitrability. I am well aware that procedural arbitrability determinations, such as timeliness, are not reviewed by the Authority absent some other, independent ground for doing so. See, e.g., American Federation of Government Employees, Local 2921 and U.S. Department of the Army, Army and Air Force Exchange Service, Dallas, Texas, 50 FLRA 184 (1995). In my view, a timeliness decision that is contrary to law would fall within the scope of another ground for evaluating the determination -- really no different from evaluating a procedural arbitrability decision on the basis of bias or fraud. I note that the Authority's rule on its review of procedural arbitrability is based on U.S. Supreme Court precedent that considered only grievances that entailed an interpretation of the collective bargaining agreement in determining such arbitrability questions. As a result, it would seem to follow that once the arbitrability determination is governed by law rather than the agreement, the Authority can review the legal contention. In fact, that approach is implicit in the analysis in Fort Rucker, 39 FLRA at 1115-16, which applied the FLSA directly (although with a different result), rather than limit the question to one of unreviewable procedural arbitrability. In that case, the Authority stated that "The Union has not shown...that time periods applicable to lawsuits under the [Fair Labor Standards] Act apply to grievances filed under a collective bargaining agreement." Id. As suggested in FDIC, I would abandon that conclusion here.
In sum, I would grant the Union's