Federal Aviation Administration and National Association of Government Employees, Local R3-10, SEIU, AFL-CIO

[ v55 p1271 ]

55 FLRA No. 203

FEDERAL AVIATION ADMINISTRATION
(Respondent)

and

NATIONAL ASSOCIATION OF GOVERNMENT
EMPLOYEES, LOCAL R3-10, SEIU, AFL-CIO
(Charging Party/Union)

WA-CA-60581

_____

DECISION AND ORDER

January 24, 2000

_____

Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members. [n1] 

I.     Statement of the Case

      This unfair labor practice case is before the Authority on exceptions to the attached decision of the Administrative Law Judge (Judge) filed by the Respondent. The General Counsel filed an opposition to the Respondent's exceptions.

      The complaint alleges that the Respondent violated section 7116(a)(1) and (5) of the Federal Service Labor-Management Relations Statute (Statute) by refusing to comply with a Memorandum of Understanding (MOU) that provided, in part, for an interim performance evaluation system for Air Traffic Assistants represented by the Charging Party. As pertinent here, the MOU included provisions linking performance awards to rating levels for bargaining unit employees. The Judge found that the Respondent violated the Statute as charged.

      Upon consideration of the Judge's decision and the entire record, we adopt the Judge's findings, conclusions, and recommended order to the extent consistent with this decision. In agreement with the Judge's conclusions, we find that the Respondent violated the Statute when it repudiated the MOU that linked performance awards to rating levels for bargaining unit employees. We also adopt the Judge's recommended remedy.

II.     Background and the Judge's Decision

A.     Background  [n2] 

1.     The MOU

      Lacking a comprehensive collective bargaining agreement, the parties entered into an MOU on May 12, 1994, dealing with certain performance rating matters. [n3]  The primary point of the MOU was to establish a 3-level performance appraisal system for unit employees, replacing a 5-level system previously applicable. Of particular pertinence to this case, the MOU established a system for granting bargaining unit employees performance awards depending upon the employees' final performance ratings, as had been done under the previous system applicable to the unit.

      The MOU included provisions dealing with the performance award budget for the unit, and with the payment of performance awards to unit members. Incorporating a paragraph from an instruction of the Respondent, the MOU provided, in pertinent part, that "[a]t the beginning of each fiscal year, the FAA will allocate a percentage of the total PMS [Performance Management System] pay to be used for QSI's and performance awards. . . ."

      The MOU also established procedures for paying performance awards to unit employees from the unit's performance award budget. These procedures included instructions for calculating the amount of awards as a fraction of the unit's performance award budget. The parties agreed that awards would go to bargaining unit employees with "exceeds" and "fully successful" ratings, bargaining unit employees rated "exceeds" receiving 1½ times the amount received by "fully successful" employees. Operating under the MOU, the Respondent gave unit employees performance awards linked to their performance ratings in 1994 and 1995.

2.     The Events Giving Rise to the Alleged Violation

      In October 1995, the Respondent approached the Union and proposed a 2-level "performance planning and recognition system" (PPRS). However, negotiations stalled, and a new agreement was never effectuated. In response to Union comments, the Respondent's [ v55 p1272 ] chief negotiator acknowledged at that time that the May 12, 1994 MOU was still in effect.

      On June 25, 1996, the Union's president wrote a letter to the Respondent's Labor Relations Representative for Air Traffic asking about performance awards for 1996. The Union wrote the letter because the usual time between appraisals and cash awards had passed and no awards had been distributed. The Union's letter was also prompted in part by a "posted" March 26, 1996 memorandum from one of the Respondent's managers that reminded subordinate managers of certain performance appraisal requirements concerning unit employees, but which omitted any mention of performance awards or of budget allocations for such awards. The Union's letter reminded the Respondent of the MOU's general provisions concerning performance-linked awards.

      The Union's president received telephonic assurances from the Respondent's Labor Relations Representative that the MOU would be honored. However, by letter dated July 24, 1996, the Respondent advised the Union that performance-linked awards would not be forthcoming. Referring to the PPRS, on which the parties had failed to agree in October 1995, the Respondent noted that one of the new system's features was that it "delinked" the performance appraisal and awards processes. Referring further to provisions of the MOU which specified that the Respondent would "allocate a percentage of the total PMS pay to be used for QSI's and performance awards," the Respondent stated:

Since it is the FAA's intent to delink awards from performance assessment, the Administrator determined at the beginning of this fiscal year that the percentage of total PMS pay to be used for awards would be zero.
Therefore, since no money has been allocated for an award payout, those employees that continue to be covered by the PMS will not receive a performance based award for the rating cycle that ended March 31, 1996.

      The Union filed an unfair labor practice charge that it subsequently amended. The General Counsel filed a complaint alleging that the Respondent violated section 7116(a)(1) and (5) of the Statute by "refus[ing] to comply" with the MOU. General Counsel Exhibit (G.C. Ex.) 1(c) at 2.

      As of the hearing in this case, which occurred in July 1997, no performance awards had been given to bargaining unit employees for 1996 or 1997.

B.     The Judge's Decision

      The Judge concluded that the Respondent had violated section 7116(a)(1) and (5) of the Statute by repudiating the MOU. The Judge held in this regard that the Respondent had breached the MOU with the Union, and that the breach was "clear and patent." Judge's Decision (Decision) at 10. The Judge also determined that the aspect of the MOU allegedly breached, i.e., the MOU's linkage of performance appraisals and performance awards, went to the "heart" of the parties' agreement. Id. at 15.

      As to remedy, the Judge decided that make whole relief under the Back Pay Act was appropriate. The Judge stated that the Respondent's repudiation of the MOU represented an unjustified or unwarranted personnel action within the meaning of the Back Pay Act entitling unit employees to make whole relief for the loss of performance awards for 1996 and 1997. Accordingly, the Judge ordered the Respondent to reimburse bargaining unit employees for any loss of pay and benefits suffered as a result of the Respondent's repudiation of the MOU. [n4] 

III.     Positions of the Parties

A.     Respondent's Exceptions

      The Respondent filed exceptions to the Judge's recommended decision and order. Initially, the Respondent argues that the Judge's determination is contrary to a Government-wide regulation issued by OPM, 5 C.F.R. § 430.504(d) (1995), that was in effect at the time the parties executed the MOU. That regulation, which was subsequently rescinded (on September 22, 1995, prior to the date of the alleged repudiation), required higher level approval of decisions to grant performance awards. The Respondent argues that by compelling the Respondent to honor a mandatory performance awards plan, the Judge's decision violates the regulation.

      The Respondent further claims that the Judge erred when he determined that bargaining unit employees were entitled to make whole relief under the Back Pay Act for the loss of performance awards. The Respondent argues that under the Transportation Act, [n5]  the Back [ v55 p1273 ] Pay Act is no longer applicable to the Respondent. The Respondent also contends that even though the Statute applies to the Respondent under the Transportation Act, section 7118(a)(7)(C) restricts back pay awards by the Authority in accordance with the Back Pay Act to situations requiring the reinstatement of an employee, a situation not present here.

      In addition, the Respondent objects that the Judge's make whole remedy interferes with its section 7106(a)(1) right to determine its budget. The Respondent argues that the Judge erroneously prescribed a specific amount of funds that must be included in the Respondent's budget. Further, the Respondent contends that the Judge's recommended remedy would result in a significant and unavoidable increase in costs that would not be offset by compensating benefits. The Respondent points out in this connection that the record contains evidence that the Respondent was under budgetary pressure at the time of the violations.

      Lastly, regarding the Back Pay Act, the Respondent claims that even if the Back Pay Act applies, the Judge's back pay remedy is defective. Specifically, the Respondent disputes the evidentiary basis cited by the Judge when he approved make whole relief based on "0.43% of base salary." In addition, the Respondent claims that the Judge failed to apply the "but for" test when he ordered relief under the Back Pay Act. Finally, in the Respondent's view, any award would constitute "money damages" as to which the Respondent's sovereign immunity has not been waived. [n6] 

B.     General Counsel's Opposition

      The General Counsel filed an opposition to the Respondent's exceptions. First, the General Counsel argues that the Respondent's claims based on 5 C.F.R. § 430.504(d) should be rejected. Citing section 2429.5 of the Authority's regulations, the General Counsel points out that the Respondent raised its arguments based on section 430.504(d) for the first time in its exceptions, and that the Authority may not consider them. Further, the General Counsel notes that section 430.504(d) was rescinded before the alleged repudiation occurred. Finally on this point, the General Counsel argues that the Respondent is estopped by virtue of its prior reliance on the MOU from making any claim that the MOU was essentially void ab initio as a result of its inconsistency with the regulation at the time the MOU was executed. The General Counsel points out in this latter connection that the Respondent purported to honor the MOU after its execution, and repeatedly argued in proceedings before the Judge that it had not repudiated the MOU, but instead was acting in accordance with it.

      Regarding the impact of the Transportation Act, the General Counsel argues in effect that the Back Pay Act matters involved in the instant case are not subject to the Transportation Act's provisions. Moreover, the General Counsel contends, the undisputed continued applicability of the Statute supplies a sufficient basis for rendering a back pay remedy consistent with the Back Pay Act.

      Furthermore, the General Counsel contends that the remedy ordered by the Judge does not interfere with the Respondent's right to determine its budget. The General Counsel points out in this connection that the remedy does not prescribe future Respondent performance award budgets. The balance of the Respondent's budget arguments, in the General Counsel's view, constitute mere disagreement with the Judge's conclusion that a repudiation had occurred.

      The General Counsel also supports the remedy ordered by the Judge, arguing that the Respondent's exceptions regarding the percentage of base salary to be used for awards constitute mere disagreement with the Judge's evidentiary findings. [ v55 p1274 ]

IV.     Analysis and Conclusions

A.     The Respondent May Not Raise the Rescinded OPM Regulation as a Defense to its Repudiation of the MOU

      In its exceptions, the Respondent raises an argument that it did not raise before the Judge. Specifically, the Respondent argues that the MOU's provisions linking ratings and awards are inconsistent with an OPM regulation, 5 C.F.R. § 430.504(d), that was in effect at the time the parties entered into the MOU.

      Section 2429.5 of the Authority's Regulations provides in relevant part that the Authority will not consider "any issue, which was not presented in the proceedings before the . . . Administrative Law Judge." It is clear in the instant case that the Respondent did not raise the section 430.504(d) issue before the Judge. Pursuant to section 2429.5, it cannot do so now. Accordingly, we dismiss this exception. See, e.g., Department of Veterans Affairs Medical Center, Muskogee, Oklahoma, 53 FLRA 1228, 1229-30 (1998) (dismissing the newly raised argument that a past practice allegedly changed unilaterally by the respondent was contrary to EEO government-wide regulations). [n7] 

B.     The Transportation Act Does Not Prevent the Authority from Ordering a Make Whole Remedy Based on the Back Pay Act

1.     Statutory Background

      The pertinent statutory background concerning the Transportation Act is as follows. The Transportation Act was enacted in November 1995. It gave the Respondent's Administrator discretion to institute a new personnel management system for the Respondent, referred to herein as the "PPRS." Section 347(a) of the Transportation Act provided in this regard that

notwithstanding the provisions of title 5, United States Code, and other Federal personnel laws, the Administrator of the [FAA] shall develop and implement . . . a personnel management system for the [FAA] . . . .

Although the Transportation Act originally specified a January 1, 1996 deadline for the Administrator's efforts, the new PPRS was not finally implemented until April 1, 1996.

      Section 347(b) (as amended on March 29, 1996) made the Statute applicable to the new PPRS instituted by the Respondent. It provided, in part, that

[t]he provisions of title 5, United States Code, . . . shall not apply to the new personnel management system developed and implemented pursuant to subsection (a), with the exception of . . . (3) chapter 71, relating to labor-management relations. (Emphasis added.)

2.     Because the New Personnel Management System Authorized by the Transportation Act Had Not Been Implemented, the Act's Exemption of That System from Various Laws Is Irrelevant

      The Transportation Act does not raise any impediment to a make whole remedy based on the Back Pay Act in this case. As set forth above, the Transportation Act is not so broadly written as to exempt the Respondent from the various provisions of law the Act references. Rather, as pertinent here, the Transportation Act focuses on the Respondent's new PPRS, specifically exempting the PPRS from many provisions of title 5 of the United States Code. The Transportation Act's focus on the PPRS is significant because, as discussed below, at the time the Respondent repudiated the MOU it was not the PPRS, but rather the "old" personnel system that preceded the PPRS, that still covered the bargaining unit. Therefore, the provisions of the Transportation Act cited by the Respondent, which limit the application of various laws, and particularly certain provisions of title 5, United States Code to the PPRS, are irrelevant to resolving the specific issue of the availability of a make whole remedy based on the Back Pay Act.

      At the time the awards were allegedly improperly withheld, the PPRS had not been extended to the bargaining unit. As the Respondent wrote in an internal memorandum shortly before the repudiation: "Negotiation with NAGE concerning adoption of the [PPRS] is at impasse. . . . [W]e are obligated to follow the procedures for performance management contained in Order 3500.7 [the FAA's performance management system that preceded the PPRS] for employees represented by [the Union] until an agreement concerning adoption of PPRS is accomplished." Joint Exhibit (Jt. Ex.) 2. Similarly, citing the transcript, the Respondent states in its exceptions that "the PPRS did not apply to [the Union]". Respondent's Exceptions at 3. Furthermore, there is no indication in the record that the PPRS subsequently [ v55 p1275 ] became applicable to the unit. Accordingly, exemptions from statutory requirements available to the Respondent when it implemented the PPRS are irrelevant in this case, where no such implementation occurred.

3.     Even If the Transportation Act Is Not Irrelevant, the Act Would Not Preclude a Make Whole Remedy in this Case

      Consistent with the foregoing, the Transportation Act is irrelevant to determining whether the Authority may order a make whole remedy under the Back Pay Act in this case. However, even if the Transportation Act were properly a consideration in determining the availability of a Back Pay Act remedy, it would not bar such relief.

      In this regard, as set forth above, section 347(b) of the Transportation Act exempts the Respondent's PPRS from many provisions of title 5, United States Code. However, it also specifically makes applicable to the PPRS "chapter 71 [of title 5], relating to labor-management relations," i.e., the Statute. The Statute, in turn, not only establishes the framework of rights and responsibilities that underlies labor-management relations in the federal service; it also assigns the Authority the responsibility to administer the Statute and, of particular relevance here, broadly empowers the Authority to issue appropriate orders to remedy ULPs. For example, section 7105(g)(3) provides that the Authority "may require an agency or a labor organization . . . to take any remedial action [the Authority] considers appropriate to carry out the policies of [the Statute]. Section 7118(a)(7)(D) repeats this broad congressional authorization with particular reference to the Authority's adjudication of ULPs, authorizing the Authority to remedy ULPs by ordering the relevant agency or labor organization to take "any combination of the actions described" elsewhere in section 7118(a)(7), or "such other action as will carry out the purpose of this chapter" (emphasis added).

      We reject the Respondent's contention that the wording in section 7118(a)(7) of the Statute limits the Authority's back pay remedial authority to situations requiring the reinstatement of an employee. Exercising the broad remedial powers granted it by the Statute, the Authority since its inception has ordered a wide range of remedies for ULPs, citing on numerous occasions, as did the Judge here, the Back Pay Act. See, e.g., Department of Defense Dependents Schools, 54 FLRA 259, 266-68 (1998) (ordering make whole relief in the form of the monetary value of improperly denied "Environmental Morale Leave" flights under the Back Pay Act). The Authority has also relied on the Back Pay Act in approving the payment of performance awards as a remedy when such awards have been improperly withheld as a consequence of an unjustified or unwarranted personnel action. See, e.g., U.S. Department of Health and Human Services, Social Security Administration, Area II, New York Region and AFGE, 48 FLRA 370, 377-79 (1993). In sum, the Authority has ordered back pay in various situations that have not involved the reinstatement of an employee.

      We find no basis in the circumstances of the instant case for taking a more restrictive view of the Authority's remedial powers than that reflected generally in the Authority's case law. Accordingly, even assuming the Transportation Act's relevance, a make whole remedy under the Back Pay Act is authorized in this case. Therefore, we hold that the Authority may order such a remedy here and we reject the Respondent's arguments to the contrary.

C.     A Make Whole Remedy Based on the Back Pay Act Would Not Interfere with the Respondent's Right to Determine its Budget under Section 7106(a)(1) of the Statute

      Relying on the Authority's negotiability case law, the Respondent asserts that a make whole remedy under the Back Pay Act would interfere with its right to determine its budget under section 7106(a)(1) of the Statute. The Authority has recently considered the relationship between the Authority's remedial powers and the Statute's management's rights provisions found in section 7106. Federal Bureau of Prisons, Washington, D.C., 55 FLRA No. 202, slip op. at 16-24 (2000) (Federal Bureau of Prisons). In that case, the Authority held that the management rights provisions of the Statute do not diminish the Authority's remedial powers.

      The Authority's holding in Federal Bureau of Prisons is applicable in this case. Accordingly, consistent with Federal Bureau of Prisons, the Respondent's exception based on its management right to determine its budget does not provide any impediment to a make whole remedy based on the Back Pay Act in this case.

      However, even if the Authority's remedial orders were subject to a management's rights analysis analogous to that employed in negotiability cases, such an argument would fail in the circumstances of this case. The Respondent argues in this regard that a remedy requiring a yearly award budget of 0.43% of base salary of bargaining unit employees would interfere with its right to determine its budget under the Statute. The Respondent relies on American Federation of Government Employees, AFL-CIO and Air Force Logistics [ v55 p1276 ] Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604 (1980) (Wright-Patterson), aff'd on other grounds sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied, 455 U.S. 945 (1982).

      Wright-Patterson, a negotiability case, established a two-prong test for determining whether a collective bargaining proposal interferes with management's right to determine its budget. Under Wright-Patterson, the Authority will find such interference if a collective bargaining proposal either: 1) prescribes the particular programs or operations to be included in the Respondent's budget, or the amount to be allocated in the budget for those programs or operations; or 2) entails an increase in costs that is significant and unavoidable and is not offset by compensating benefits. See id. at 608.

      Even assuming that negotiability case law is properly applied to the ULP remedy question in this case, Wright-Patterson's test would not be satisfied. As to the first prong, the make whole remedy recommended by the Judge does not in any way "prescribe future performance award budgets." As to Wright-Patterson's second prong, the Respondent does not cite in its exceptions any record evidence that would provide a basis for evaluating the "significance" of the make whole remedy's budgetary impact, if any. The Respondent also makes no argument whatsoever concerning "compensating benefits." Accordingly, the Respondent's exceptions do not provide any basis for determining that a make whole reimbursement remedy such as that ordered by the Judge would interfere with the Respondent's right to determine its budget under section 7106(a)(1) of the Statute. Cf. U.S. Department of Veterans Affairs Medical Center, North Chicago, Illinois and American Federation of Government Employees, Local 2107, 52 FLRA 387, 393-94 (1996) (rejecting a challenge under Wright-Patterson to an arbitrator's make whole remedy requiring an agency to reimburse employees for improperly withheld performance awards).

D.     The Respondent's Remaining Objections Lack Merit

      The Respondent contests only the make whole aspect of the Judge's remedy. The Respondent does not except to the cease and desist and posting aspects of the relief recommended by the Judge.

      Make whole relief is clearly appropriate in this case. The D.C. Circuit has stated that in ULP cases where a violation is found, there is "a weighty preference in favor of a direct grant of individualized `make whole' relief - especially in the form of a monetary award - for losses actually suffered by employees." AFGE, SSA Council 220 v. FLRA, 840 F.2d 925, 930 (D.C. Cir. 1988). In this case, therefore, a make whole remedy is appropriate to the extent that the Respondent's improper repudiation of the MOU caused unit employees to suffer the loss of monetary awards they otherwise would have received but for such improper conduct on the part of the Respondent.

1.     The Respondent's Objection, Based on the Fort Benjamin Harrison Case, to a Make Whole Remedy Lacks Merit

      We reject the Respondent's objection, based on Fort Benjamin Harrison[n8]  to make whole relief in this case. As discussed above, the Statute's broad remedial provisions and the Back Pay Act provide an ample foundation for such a remedy. [n9] 

      The Fort Benjamin Harrison case, upon which the Respondent relies, does not apply. In Fort Benjamin Harrison, the court disapproved an Authority order that an agency compensate bargaining unit employees for "all monies lost or interest charged as a result" of a change in the agency's pay-lag policy. Fort Benjamin Harrison, 56 F.3d at 276 (quoting the Authority's order, 48 FLRA at 26). The court held that the remedy constituted "`money damages,' a legal rather than an equitable remedy." Id.

      Fort Benjamin Harrison does not apply for two reasons. First, in contrast to the remedy ordered by the Authority in Fort Benjamin Harrison, the make whole remedy at issue in this case is within the scope of the Back Pay Act. Second, the make whole remedy recom- [ v55 p1277 ] mended by the Judge here is a monetary award of an equitable nature, which Fort Benjamin Harrison specifically approved, not a monetary award of a legal nature, which the court held to be beyond the Authority's power. As the court stated (56 F.3d at 276), equitable monetary relief "is `the very thing to which [the plaintiff] is entitled'" (citation omitted). In this case, the reimbursement to which an eligible bargaining unit employee would be entitled would be "the very thing" improperly withheld, i.e., the money that the bargaining unit employee would have received as an appraisal-linked award, but for the Respondent's improper repudiation. Thus, the reimbursement would not be, as in Fort Benjamin Harrison, merely "a substitute for something lost in consequence of the defendant's act." Id. Therefore, Fort Benjamin Harrison is distinguishable and does not bar a make whole remedy of the type ordered by the Judge in this case.

2.     The Make Whole Remedy Ordered by the Judge Is Supported by a Preponderance of Evidence in the Record

      The Respondent's objection to the amount of the make whole relief ordered by the Judge raises an evidentiary issue. The Respondent contends that the Judge did not have a proper basis in the record for predicating a reimbursement remedy on an award budget of 0.43% of unit employees' base salary for each of the years to which the remedy would apply. Thus, the Respondent argues, the remedy that the Judge ordered does not satisfy the Back Pay Act's "but for" test.

      Contrary to the Respondent's contentions, and as discussed below, the make whole remedy ordered by the Judge is supported by a preponderance of evidence in the record. Relying upon record evidence, the Judge found that the Respondent had established an award budget that was 0.43% of base salary for 1994 and 1995, the two years in which the Respondent had made awards under the MOU. On this basis, and in the absence of the Respondent's reliance on any other specific evidence on the point, the Judge determined that it would be appropriate to use the same percentage of base salary to determine the award budget for years to which the make whole remedy would apply.

      The Respondent's objections to the Judge's determination do not identify an evidentiary basis for a make whole remedy in a different amount. In this connection, although the Respondent disagrees with the Judge's finding concerning the percent of base salary that the Respondent would have allocated to the award budget had it not repudiated the MOU, it does not present an alternative that finds support in the record. The Respondent's only alternative suggestion is that the Authority adopt the "zero" budget figure the Respondent used to effectively delink ratings and awards. In this regard, as discussed previously in section II.A.2, the Respondent had stated in a July 1996 letter to the Union that "[s]ince it is the FAA's intent to delink awards from performance assessment, the Administrator determined . . . that the percentage of total PMS pay to be used for awards would be zero." However, as this passage makes evident, the letter ties the zero budget figure exclusively to the Respondent's intent to delink ratings and awards. The Respondent's zero budget figure therefore is not probative of what the Respondent would have done had it not determined to repudiate the MOU. Furthermore, although there is evidence in the record of congressional interest in awards expenditures, nothing in that regard suggests that a continuation in future years of the award budget base from 1994 and 1995 had been prohibited.

      Conversely, record evidence convincingly supports the Judge's recommendation that a make whole remedy be based on the same award pool of 0.43% of base salary that the Respondent used for awards in 1994 and 1995. This evidence indicates that the Respondent's award budget for the years during which no awards were given remained substantially the same as the Respondent's award budget for 1995. Specifically, this evidence indicates that Congress capped the Respondent's award budget for FY 1996 at the same level at which it was capped for FY 1995, $20.957 million; and that Congress capped the FY 1997 award budget at $20.8 million. See, e.g., G.C. Ex. 12 at 1,3; G.C. Ex. 14 at 2.

      Respondent's award pool guidance for FY 1996 provides further support for at least the 0.43% figure used by the Judge. That guidance recommended that agency components establish an awards pool of between 0.5% and 1% of base salary, a range actually in excess of the 0.43% award pool ordered by the Judge. G.C. Ex. 13 at 1.

      In these circumstances, we find that a preponderance of the evidence supports the 0.43% figure used by the Judge to calculate a make whole remedy under the Back Pay Act in this case. Accordingly, we find that but for the Respondent's repudiation of the MOU, unit employees would have received performance awards linked to their appraisals, calculated based on an award budget equating to 0.43% of the base salaries of the employees in the affected unit. The make whole remedy set forth in our order shall be predicated on a yearly award budget calculated on that basis. [ v55 p1278 ]

V.     Order

      Pursuant to section 2423.41 of our Regulations and section 7118 of the Federal Service Labor-Management Relations Statute, the Federal Aviation Administration shall:

      1.     Cease and desist from:

           (a) Failing and refusing to honor the May 12, 1994 Memorandum of Understanding negotiated with the National Association of Government Employees, Local R3-10, SEIU, AFL-CIO, the bargaining unit employees' exclusive representative, by failing and refusing to link performance ratings with performance awards.

           (b) In any like or related manner interfering with, restraining, or coercing bargaining unit employees in the exercise of rights assured them by the Federal Service Labor-Management Relations Statute.

      2.     Take the following affirmative actions in order to effectuate the purposes and policies of the Statute:

           (a) Upon request of the National Association of Government Employees, Local R3-10, SEIU, AFL-CIO, the bargaining unit employees' exclusive representative, link performance ratings with performance awards as required by the May 12, 1994 Memorandum of Understanding.

           (b) Reimburse any bargaining unit employee for the loss of pay and benefits that he/she suffered as a result of the Agency's repudiation of the May 12, 1994, Memorandum of Understanding negotiated with the National Association of Government Employees, Local R3-10, SEIU, AFL-CIO. Back pay will be made in accordance with the Back Pay Act, 5 U.S.C. § 5596, as amended, and will include the payment of interest.

           (c) Post at all of its facilities nationwide where bargaining unit employees are located, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Administrator and shall be posted and maintained for 60 consecutive days thereafter, in conspicuous places, including all bulletin boards and other places where notices to bargaining unit employees are customarily posted. Reasonable steps shall be taken to ensure that such notices are not altered, defaced, or covered by any other material.

           (d) Pursuant to section 2423.41(e) of the Authority's Regulations, notify the Regional Director, Washington Regional Office, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply.


NOTICE TO ALL EMPLOYEES
POSTED BY ORDER OF THE
FEDERAL LABOR RELATIONS AUTHORITY

The Federal Labor Relations Authority has found that the Federal Aviation Administration, Washington, D.C., violated the Federal Service Labor-Management Relations Statute and has ordered us to post and abide by this notice.

We hereby notify bargaining unit employees that:

WE WILL NOT, fail or refuse to honor the May 12, 1994 Memorandum of Understanding negotiated with the National Association of Government Employees, Local R3-10, SEIU, AFL-CIO, the bargaining unit employees' exclusive representative, by failing and refusing to link performance ratings with performance awards as required by the Memorandum of Understanding.

WE WILL NOT, in any like or related manner interfere with, restrain, or coerce bargaining unit employees in the exercise of their rights assured them by the Federal Service Labor-Management Relations Statute.

WE WILL upon request of the National Association of Government Employees, Local R3-10, SEIU, AFL-CIO, the bargaining unit employees' exclusive representative, link performance ratings with performance awards as required by the parties' May 12, 1994 Memorandum of Understanding.

WE WILL reimburse any bargaining unit employee for the loss of pay and benefits that he/she suffered as a result of our failure to honor the May 12, 1994 Memorandum of Understanding negotiated with the National Association of Government Employees, Local R3-10, SEIU, AFL-CIO. Back pay will be made in accordance with the Back Pay Act, 5 U.S.C. § 5596, as amended, and will include the payment of interest.

      ________________________