U.S. Department of Defense, Dependents Schools, Bulzbach Elementary School, Bulzbach, Germany (Agency) and Federal Education Association (Union)
[ v56 p208 ]
56 FLRA No. 24
U.S. DEPARTMENT OF DEFENSE
DEPENDENTS SCHOOLS, BULZBACH ELEMENTARY SCHOOL, BULZBACH, GERMANY
FEDERAL EDUCATION ASSOCIATION
March 29, 2000
Before the Authority: Donald S. Wasserman, Chairman; Phyllis N. Segal and Dale Cabaniss, Members.
Decision by Member Cabaniss for the Authority.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Robert Herzog 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 Arbitrator sustained a grievance and directed the Agency to pay the grievant 4 days of back pay with interest, plus interest for 1 day previously paid, for the grievant's attendance at a 5-day education training workshop. For the reasons that follow, we conclude that the award is not deficient under section 7122(a) of the Statute. Accordingly, we deny the exceptions.
II. Background and Arbitrator's Award
The Federal Education Association (FEA or Union) represents the grievant, an overseas teacher for the Department of Defense Dependents Schools (DoDDS or Agency). In June 1997, the grievant attended a 5-day summer education training workshop, after which she properly submitted a request for payment for $1151.95. In July 1997, the grievant attended a second summer workshop and again properly submitted a payment request for her attendance.
On September 25, 1997, the grievant filed a grievance because the Agency had not paid her for attending the June workshop. The school principal denied the grievance as a "budgetary matter . . . outside the grievance process at the local school level." Award at 4. On October 9, 1997, the grievant filed a second grievance, this one concerning the July 1997 workshop. On October 11, 1997, the Agency paid the grievant, in full, for the July workshop.
From July 1997 through October 1998, the grievant, her school principal, and others inquired or supplied documentation to the Agency "[o]n nearly forty occasions" regarding the grievant's pay request for the June workshop. Id. at 8. The Agency's lead personnel management specialist advised the grievant that her SF-50 was being processed through the personnel office "for payment for [the grievant's] participation at the June 16-21, 1997 workshop." [n1] See Opposition at Attachment 12, Union Exhibit 8.
On October 22, 1998, the grievant received payment for 1 day of the 5-day, June 1997 workshop. Because the Agency did not remunerate the grievant in full, however, the initial grievance was not resolved and the parties proceeded to arbitration.
At arbitration, the parties stipulated to the following:
(1) Grievant attended a workshop from June 16-20, 1997;
(2) Time card submitted by principal on September 9, 1997;
(3) One day was paid on October 10, 1998;
(4) No interest was paid on the five days compensation for attendance at the June 16-20, 1997 workshop;
(5) The 266th TFC [Army Finance Command] was the former pay agent for DoDDS;
(6) DFAS (Defense Finance Accounting Service) assumed responsibility as pay agent for DoDDS in July 1997.
Award at 7.
The parties did not dispute that the grievant was entitled to payment for all 5 days of the June workshop, [ v56 p 209 ] but were unable to agree on an issue to submit to the Arbitrator. The Arbitrator framed the issue as follows:
Did the Agency violate laws, rules, regulations, the Collective Bargaining Agreement and/or authoritative decisional precedent by:
(a) failing to pay the Grievant in a timely manner for a June 16-20, 1997 workshop;
(b) failing to pay the Grievant interest on said back pay?
If so, what shall the remedies be?
Id. at 2.
B. Arbitrator's Award
The Arbitrator analyzed the parties' collective bargaining agreement and concluded that the agreement incorporated, by reference, the Back Pay Act. [n2] Id. at 9. The Arbitrator also analyzed the Back Pay Act and related Office of Personnel Management (OPM) regulations. [n3] Id. at 16-17.
The Arbitrator was not persuaded by the Agency's argument that nonpayment for 16 months was only a delay and that under Article 2, Section 4.D. of the parties' agreement there was no certain date by which the Agency had to pay the grievant. [n4] Id. at 11-12, 14. The Arbitrator applied the language of a Memorandum of Understanding (MOU) within Article 27 of the parties' agreement requiring timely payment to teachers for "extracurricular" activities. [n5] The Arbitrator considered the grievant's attendance at the summer workshop to be an example of such an "extracurricular" activity. Id. at 12. The Arbitrator found that "nonpayment for sixteen months . . . violates the intent of the parties concerning timeliness of payment to employees when the collective bargaining agreement is construed in its entirety." Id. at 13.
The Arbitrator also was not persuaded by the Agency's argument that the nonpayment resulted from a transfer of payroll responsibilities between two different pay agents during this time. Id. at 14. The Arbitrator reasoned that "[s]uch an argument might have had credence when the Grievant submitted her first pay inquiry . . . [but] is totally rejected in view of the approximately forty pay inquiries and communications that followed." Id. The Arbitrator cited the testimony of the Senior Analyst in the Civilian Pay Directorate who stated "If all had worked correctly, she [the Grievant] should have been paid in June or July 1997." Id. The Arbitrator also cited the testimony of the Agency's own personnel advisor who stated that "the conversion doesn't give anyone the excuse not to pay." [n6] Id. at 15. Finally, the Arbitrator rejected the Agency's argument that United States v. Testan, 424 U.S. 392 (1976) (Testan), precluded the Arbitrator from classifying the Agency's conduct as an action falling within the scope of the Back Pay Act. Award at 16.
The Arbitrator concluded that "[t]he Agency violated laws, rules, regulations, the Collective Bargaining Agreement and authoritative decisional precedent by failing to pay the Grievant in a timely manner for a . . . June 16-20, 1997 workshop". Id. at 19. The Arbitrator further concluded that the Agency's "failure to timely pay the Grievant" was an "unjustified and unwarranted personnel action which deprived the Grievant of pay due her." Id. [ v56 p210 ]
The Arbitrator sustained the Union's grievance and directed the Agency "[to] correct the unjustified and unwarranted personnel action" by paying the grievant for the remainder of the June 1997 workshop. Id. at 19. The Arbitrator also directed the Agency to pay the grievant interest, in accordance with the Back Pay Act, as follows:
(a) interest on two hundred thirty dollars and thirty-nine cents ($230.39) for the period June 20, 1997 through to October 10, 1998, less thirty days;
(b) interest on nine hundred twenty-one dollars and fifty-six cents ($921.56) for the period June 20, 1997 through to the implementation date of [payment of the remaining June 1997 workshop days], less thirty days.
Id. at 19-20.
The Arbitrator declared that his award was in complete accord with prior arbitration awards involving the parties. [n7] Id. at 17. The Arbitrator retained jurisdiction through implementation of the award. Id. at 20.
III. Positions of the Parties
A. Agency's Exceptions
The Agency's first claim is that the award is deficient because it is based on a nonfact. Exceptions at 4. According to the Agency, the Arbitrator's characterization of the Agency's conduct as a "denial action" was erroneous. Since the Agency had paid the grievant for one of the five days of the June 1997 workshop, the Agency's delay fully remunerating the grievant could not be a "denial action." Id. at 5.
Next, the Agency cites Library of Congress v. Shaw, 478 U.S. 310, 318 (1986) (Shaw), and argues that the Arbitrator's award is contrary to law because it violates sovereign immunity. Id. at 6. The Agency cites Testan, 424 U.S. at 405, arguing that the Arbitrator wrongfully "stretched" the Back Pay Act beyond its scope by including administrative delay within the definition of "unwarranted and unjustified personnel actions." Id. at 7. According to the Agency, the Back Pay Act contains no language, either within the Act itself or within its legislative history, to support the premise that a pay action or administrative delay in payment of an entitlement would qualify as a personnel action for purposes of the Back Pay Act. Id. Rather, the Agency claims, "[t]he legislative history . . . establishes that Congress intended to compensate employees monetarily only for mistakes resulting from traditional personnel actions, such as demotions, suspensions and separations." Id. [n8]
The Agency also cites a 1986 Comptroller General case and a 1972 Court of Claims case for the proposition that the U.S. Government's delay in payment, no matter how unreasonable, does not create an entitlement to interest on the payment. Exceptions at 9-10 (citing Matter of: Charles Wener, 65 Comp. Gen. 541 (1986) (Wener); and Economy Plumbing and Heating Co. v. United States, 470 F.2d 585, 594 (Ct. Cl. 1972) (Economy Plumbing)). Finally, the Agency contends that the OPM regulations to the Back Pay Act overreach Congressional intent and the scope of the Act. Id. 11-12.
B. Union's Opposition
The Union asserts that the Agency's exceptions reflect "mere disagreement" with the Arbitrator's interpretation and application of the Back Pay Act and are simply attempts to relitigate the issue and to avoid paying interest on a Back Pay Act award as long as possible. Opposition at 2-3.
The Union cites United States Department of Justice, Federal Bureau of Prisons, Correctional Institute, McKean, Pennsylvania and American Federation of Government Employees Council of Prison Locals, Local 3974, 49 FLRA 45, 51 (1994), and contends that the Agency has not properly advanced its assertion of nonfact, because the Agency has neither identified the nonfact nor elaborated on the validity of the assertion of nonfact. Id. at 27. The Union cites Federal Deposit Insurance Corporation, Chicago Region and National Treasury Employees Union, Chapter 242, 45 FLRA 437, 450-52 (1992), [ v56 p211 ] and argues that since the Arbitrator's award was based upon the Arbitrator's conclusion of law, there exists no support for the Agency's nonfact claim. Opposition at 28.
The Union also cites American Federation of Government Employees, Local 3302 and U.S. Department of Health and Human Services, Social Security Administration, 52 FLRA 677, 679 (1996) and American Federation of Government Employees, Local 3295 and U.S. Department of the Treasury, Office of Thrift Supervision, Washington, D.C., 51 FLRA 27, 31-32 (1995), to discount the Agency's challenge that the Arbitrator's erroneous characterization of a "delay" as a "denial action" constituted a nonfact resulting in a deficient award. Id. Finally, the Union cites American Federation of Government Employees, Local 2204 and U.S. Department of the Army, Fort Hamilton, New York, 46 FLRA 688, 691 (1992), arguing that the Agency's allegation that the award was contrary to evidence is not a sufficient basis for rendering the Arbitrator's award deficient. Id.
Finally, the Union contends that the Agency's reliance on Testan to support its claim that the award is contrary to law is misplaced because the Supreme Court decided the case prior to 1978 congressional amendments to the Back Pay Act. Opposition at 21. Similarly, the Union claims the Agency's reliance upon Shaw, 478 U.S. 310 (1986), is inappropriate because the Court decided that case prior to Congress' 1988 amendments to the Act. Opposition at 22.
A. The Award is Not Based on a Nonfact
To establish that an award is based on a nonfact, the appealing party must show that a central fact underlying the award is clearly erroneous, but for which the arbitrator would have reached a different result. See U.S. Department of the Air Force, Lowry Air Force Base, Denver, Colorado and National Federation of Federal Employees, Local 1497, 48 FLRA 589, 593 (1993). The Authority will not find an award deficient on the basis of an arbitrator's determination on any factual matter that the parties disputed at arbitration. U.S. Department of the Interior, Bureau of Mines, Pittsburgh Research Center and American Federation of Government Employees, Local 1916, 53 FLRA 34, 40 (1997). Moreover, an arbitrator's interpretation of a contract provision is not a fact that can be challenged as a nonfact. American Federation of Government Employees, AFL-CIO, Local 3615 and U.S. Department of Health and Human Services, Social Security Administration, Office of Hearings and Appeals, 44 FLRA 806, 818 (1992).
In this case, the Agency's exception challenges the factual determination made by the Arbitrator that the Agency had not paid the grievant and had thus engaged in a "denial action." The Agency argues that, because it had already paid the grievant for one of the five days requested, it should not be considered to have engaged in a "nonpayment" for the rest of the amount requested and it was error for the Arbitrator to find otherwise. Exceptions at 5.
It is clear from the record that the parties made the Arbitrator aware of the one day's payment and that the parties disputed before the Arbitrator the question of whether the Agency had engaged in a "denial action" or nonpayment of money due the grievant, with the Arbitrator finding in the grievant's favor. Award at 8 and 11. Therefore, because the alleged nonfact was disputed by the parties and resolved by the Arbitrator, and because the Agency has neither established nor demonstrated that the central fact underlying the award was clearly erroneous, but for which a different result would have been reached, the Agency's exception does not support a conclusion that the award is based on nonfact. See American Federation of Government Employees, Local 4042 and U.S. Department of Defense, Army Air Force Exchange Service, Waco Distribution Center, Waco, Texas, 51 FLRA 1709, 1713 (1996).
B. The Award is Not Contrary to the Back Pay Act
1. Standard of Review
The Authority's role in reviewing arbitration awards depends upon the nature of the appealing party's exceptions. U.S. Customs Service v. FLRA, 43 F.3d 682, 686 (D.C. Cir. 1994) (U.S. Customs). Where a party's exception challenges an award's consistency with law, the Authority reviews the question of law raised by the exception and the arbitrator's award de novo. See 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, 43 F.3d at 686-87). In applying a de novo standard of review, the Authority assesses whether the arbitrator's legal conclusions are consistent with the applicable standard of law. See National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id. If an award fails to contain the factual findings necessary to enable the [ v56 p212 ] Authority to assess the arbitrator's legal conclusions, and the findings cannot be derived from the record, the award will be found deficient and the case will be remanded to the parties for submission to the arbitrator so that the requisite findings can be made. See id.
2. The Award Meets the Requirements of the Back Pay Act
In order to be eligible for relief under the Back Pay Act, the grievant must be found by an "appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, [finds the employee] . . . to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee[.]" 5 U.S.C. § 5596(b)(1); See also Social Security Administration, Office of Hearings and Appeals, Falls Church, Virginia and American Federation of Government Employees, Local 3615, 55 FLRA 349, 353 (1999) (citing U.S. Department of Health and Human Services and National Treasury Employees Union, 54 FLRA 1210, 1218 (1998)). Such an individual is then entitled to receive, among other things, "an amount equal to all or any part of" the pay, allowances, or differentials the employee would have earned or received if the improper personnel action had not taken place. 5 U.S.C. § 5596 (b)(1)(A)(i). These amounts are payable with interest.
The Agency's challenge to liability under the Back Pay Act is limited to the issue of whether its delay in making payment to the grievant amounts to an "unwarranted and unjustified personnel action." The various precedent the Agency cites stands for the proposition that a "delay" in making a payment of money owed does not constitute an action for which relief under the Back Pay Act may be provided.
Notwithstanding the Agency's arguments, the record clearly establishes that the Arbitrator satisfied the requirements of the Back Pay Act. With respect to showing that an agency committed an "unjustified or unwarranted personnel action," Authority precedent holds that a violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action. See, e.g., U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 785 (1998) (citing Department of Health and Human Services, Health Care Financing Administration, Region IV, Atlanta, Georgia and National Treasury Employees Union, Chapter 210, 21 FLRA 910, 913 (1986) (collective bargaining agreement violation triggers entitlement under Back Pay Act)). The Arbitrator concluded that "[t]he Agency violated laws, rules, regulations, [and/or] the Collective Bargaining Agreement" by failing to pay the grievant in a timely manner. Award at 19. While the precedent that the Agency relies on reaffirms that there is no inherent right to be paid in a timely manner, that precedent does not preclude an arbitrator from enforcing a contractual requirement to make payment in a timely manner. Accordingly, the award is not contrary to the Back Pay Act.
3. Interest is Warranted Under the Back Pay Act
The Agency cites the 1986 Comptroller General decision, Wener, 65 Comp. Gen. 541, and Economy Plumbing, 470 F.2d 585, in support of its argument that regardless of how unreasonable the U.S. Government's delay in payment, the grievant in this case is not entitled to interest on the back pay. However, the Arbitrator awarded the grievant back pay based on the Agency's violation of the parties' collective bargaining agreement, not mere delay. Because the Arbitrator properly awarded the grievant back pay under the Back Pay Act, the payment of interest on that back pay is warranted. As the Agency did not contest the amount of interest to be paid, the issue is not discussed herein.
C. The Authority is Not the Proper Forum for Agency Challenges to OPM Regulations
The Agency's final argument is that the OPM regulations to the Back Pay Act overreach Congressional intent and the scope of the Act by including pay actions. We find no basis in this argument for overturning the Arbitrator's award.
Section 7105 of the Statute enumerates the powers and duties of the Authority, none of which relate to passing judgment on rules or regulations that OPM or any other federal agency has enacted. See 5 U.S.C. § 7105; and American Federation of Government Employees, AFL-CIO, National Council of Grain Inspection Locals, v. FLRA, 794 F.2d 1013, 1015 (5th Cir. 1986) (Congress did not intend for the Authority to sit in review of other agencies' regulations). If the Agency wishes to challenge the validity of the OPM regulations to the Back Pay Act, the Authority is not the correct forum . See National Treasury Employees Union v. Devine, 577 F. Supp. 738 (D.C.D.C. 1983), aff'd, 733 F.2d 114 (D.C. Cir. 1984) (union challenge of OPM regulations is a matter for district court).
The Agency's exceptions are denied. [ v56 p213 ]
5 U.S.C. § 5596 Back pay due to unjustified personnel action.
(a) For the purpose of this section, "agency" means-
(1) an Executive agency;
. . . .
(b)(1) An employee of an agency who, on the basis of a timely appeal or an administrative determination (including a decision relating to an unfair labor practice or a grievance) is found by appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee--
(A} is entitled, on correction of the personnel action, to receive for the period for which the personnel action was in effect--
(i) an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred, less any amounts earned by the employee through other employment during that period; and
. . . .
(2)(A) An amount payable under paragraph (1)(2)(I) of this subsection shall be payable with interest.
(B) Such interest--
(i) shall be computed for the period beginning on the effective date of the withdrawal or reduction involved and ending on a date not more than 30 days before the date on which payment is made;
(ii) shall be computed at the rate or rates in effect under section 6621(a)(1) of the Internal Revenue Code of 1986 during the period described in clause (I); and
(iii) shall be compounded daily.
. . . .
(4)(c) the Office of Personnel Management shall prescribe regulations to carry out this section . . .
5 C.F.R. Subpart H
§ 550.803 Definitions.
. . . .
Appropriate authority means an entity having authority in the case at hand to correct or direct the correction of an unjustified or unwarranted personnel action, including
. . . .
(i) an arbitrator in a binding arbitration case, and
(j) the head of the employing agency or another official of the employing agency to whom such authority is delegated.
. . . .
Unjustified or unwarranted personnel action means an act of commission or an act of omission (i.e., failure to take an action or confer a benefit) that an appropriate authority subsequently determines, on the basis of substantive or procedural defects, to have been unjustified or unwarranted under applicable law, Executive order, rule, regulation, or mandatory personnel policy established by an agency or through a collective bargaining agreement. Such actions include personnel actions and pay actions (alone or in combination).
§ 550.804 Determining entitlement to back pay.
(a) When an appropriate authority has determined that an employee was affected by an unjustified or unwarranted action, the employee shall be entitled to back pay under section 5596 of title 5, United States Code, and this subpart only if the appropriate authority finds that the unjustified or unwarranted personnel action resulted in the withdrawal, reduction, or denial of all or part of the pay, allowances, and differentials otherwise due the employee.
. . . .
§ 550.806 Interest computations.
(a) Interest begins to accrue on the date or dates (usually one or more pay dates) on which the employee would have received the pay, allowances, and differentials if the unjustified or unwarranted personnel action had not occurred.
. . . .
Footnote # 1 for 56 FLRA No. 24
Footnote # 2 for 56 FLRA No. 24
Relationship to Laws and Government-Wide Regulations
A. In the administration of all matters covered by this Agreement, the parties shall be governed by laws and Government- wide regulations in effect on September 18, 1989 . . . .
Award at 9.
Footnote # 3 for 56 FLRA No. 24
Footnote # 4 for 56 FLRA No. 24
Article 2, Section 4.D. of the parties' agreement provides that "the Agency will request of the servicing finance office, that a check be furnished as soon as possible when payment is not received on a regularly scheduled pay day." Award at 12. The Arbitrator found this provision pertains to a missed paycheck when an employee is transferred or reassigned and finance records are lost, destroyed, or otherwise delayed in reaching the new unit. Id. The Arbitrator noted that none of the Article 2, Section 4.D. conditions applied in the instant case and that the Agency was thus relying on "unclear and ambiguous" language. Id.
Footnote # 5 for 56 FLRA No. 24
As soon as the [extracurricular] activity is completed, [the employee attending the activity] will notify the Principal and he/she shall arrange that [the employee attending the activity] be paid by separate check not later than the next regular pay period for employees. (Emphasis added by Arbitrator)
Award at 12-13.
Footnote # 6 for 56 FLRA No. 24
The Arbitrator found that "[a]s late as October 13, 1998, the Agency was not even acknowledging the existence of the June 1997 workshop pay claim . . . the Agency responded on October 13, 1998 that [the] Grievant had been fully paid for the July 1997 workshop and, by so doing, perpetuated the denial of payment for the June 1997 workshop." Award at 11.
Footnote # 7 for 56 FLRA No. 24
The Authority has addressed previous disputes between this Agency and Union regarding application of the Back Pay Act and the remedies available under the Act. See generally, e.g., U.S. Department of Defense, Department of Defense Dependents' Schools and Federal Education Association, 54 FLRA 773, 787 (1998) (employees found to be entitled to an award of back pay under the Back Pay Act are entitled to consideration of other remedies of the Act, even if such consideration occurs in a later proceeding); U.S. Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 514, 518-19 (1998) (under the Back Pay Act, back pay is computed "with interest").
Footnote # 8 for 56 FLRA No. 24
According to the Agency, the 1975 amendment to the Back Pay Act addressed the restoration of annual leave after an unjustified or unwarranted personnel action and distinguished such a personnel action from "administrative error." Exceptions at 8. The Agency also asserts that the 1978 amendment, while broadening the definition of an unjustified or unwarranted personnel action to include "acts of commission as well as omission with respect to nondiscretionary provision of law," does not support that an "administrative delay" constitutes an unjustified or unwarranted personnel action. Id. at 8-9.