U.S. Department of Defense, Education Activity, Arlington, Virginia (Agency) and Federal Education Association (Union)
[ v56 p744 ]
56 FLRA No. 124
U.S. DEPARTMENT OF DEFENSE
FEDERAL EDUCATION ASSOCIATION
September 27, 2000
Before the Authority: Donald S. Wasserman, Chairman; Dale Cabaniss, Member.
I. Statement of the Case
This case is before the Authority on exceptions to an award of Arbitrator Robert T. Moore filed by the Agency under section 7122(a) of the Statute and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions. [n1]
This case is related to three prior arbitration awards (Arbitrators Bloch, Hockenberry and Popular), other issued decisions (56 FLRA 208 issued on March 29, 2000 and 56 FLRA No. 119 issued on September 26, 2000), and several other arbitration cases pending before the Authority regarding payment of interest on arbitration awards. Two of the underlying arbitration cases were also before the Authority regarding payment of attorney fees pursuant to the Back Pay Act, in 54 FLRA 514 and 54 FLRA 773. The payment of interest on the award of backpay was not at issue in those cases. The underlying background is set forth in detail in U.S. Department of Defense, Education Activity, Arlington, Virginia and Federal Education Association, 56 FLRA No. 119 (September 26, 2000) (DODEA, Arlington) and will be referred to where necessary in this decision.
In this case, Arbitrator Moore sustained a grievance alleging that the Agency failed to pay interest (and in some cases the principal amounts) on backpay and allowances that were due to twelve employees. For the reasons that follow, we deny the exceptions.
II. Background and Award
The twelve employee grievances were similar to those initially resolved by the earlier Bloch, Popular, and Hockenberry arbitration awards. The grievances were submitted to arbitration when the Agency refused to pay interest on the backpay and allowances owed the grievants under the Back Pay Act. The Agency did not dispute that the monies claimed were owed to the employees. See Award at 5. [n2] The Arbitrator awarded interest on the backpay due the employees. Because no exceptions were filed regarding the merits of the grievances, only the remedy portion of the award will be discussed.
The Arbitrator stated that:
[t]hrough its post-hearing assertions and arguments, [the Agency] has transformed this case from one over the proper application of the ground rules of the Bloch, Popular and Hockenberry awards, to a dispute over the meaning of the Back Pay Act. It not only renounces any binding precedent value of those awards, but also disclaims its prior positions, stipulations, and agreements. It also challenges OPM guidance provided at 5 CFR [Part] 550 Subpart H for the proper implementation of the Back Pay Act.
Opinion at 10.
Arbitrator Moore examined the Back Pay Act, the prior arbitration awards, and OPM's regulations afresh. Arbitrator Moore determined that many of the cases relied on by the Agency pre-dated amendments to the Back Pay Act that permit backpay liability for failures to act, i.e., omissions, and provide for the payment of interest on sums owed. He concluded that these cases were "deprived of relevance by their dates." Id. at 12. Arbitrator Moore also found that other cases relied on by the Agency "suffer from not involving the Back Pay [ v56 p745 ] Act, or statutes which make the necessary specific reference to interest." Id.
Arbitrator Moore concluded that an intent to deprive an employee of pay or other benefit is not a requirement of any provision of the Back Pay Act. Arbitrator Moore also found that the Agency's reliance on United States v. Testan, 424 U.S. 392 (1976) (Testan) was misplaced for two reasons. First, Testan was decided before the Back Pay Act was amended by the Civil Service Reform Act of 1978, to include acts of omission. Second, Testan concerned a reclassification action and the Court found that no provision of the Classification Act made the United States liable for pay lost through allegedly improper classification. Arbitrator Moore also noted that classification actions involved discretionary acts, but that "[h]ere, none of the alleged [unjustified or unwarranted personnel actions] involve discretionary actions by [the Agency]." Opinion at 19.
Arbitrator Moore determined that the interest provision of the Back Pay Act cannot be separated from the backpay liability provisions of that same statute and that the Authority has rejected an arbitrator's refusal to order interest on backpay. Arbitrator Moore also found that pay actions cannot be separated from personnel actions in this arbitration. Arbitrator Moore noted that the Agency failed to cite any statute or regulation that would sever the Agency's responsibility to its employees once a personnel action passed from the Agency to its pay agent, the Defense Finance and Accounting Service (DFAS). Id. at 24.
As to the period when interest would be owed to the affected employees, Arbitrator Moore determined that interest accrues on a late payment beginning the date it should have been paid and ending not more than 30 days before it is actually paid, consistent with 5 U.S.C. § 5596(b)(2)(B)(i) and (ii).
In response to the Agency's argument that there is no method by which a mandatory date for receipt of pay can be determined in this case, Arbitrator Moore determined that the Defense Department Overseas Teachers Pay and Personnel Act, 20 U.S.C. §§ 901-907 (the Act), grants each Agency teacher the "'right to be paid a certain amount'" and "'commands recompense.'" Opinion at 28. Arbitrator Moore stated the Act commands the Secretary of Defense to prescribe and issue regulations governing the establishment of teaching positions, the fixing of basic teacher compensation, the entitlement of the teachers to such compensation, the payment of the compensation, and for establishing "'quarters, allowances, and additional compensation for teachers.'" Id.
Arbitrator Moore concluded that:
[t]his is all the Back Pay Act needs to invoke its authority where [an unjustified or unwarranted personnel action] has "resulted in the withdrawal or reduction of all or part of the pay, allowances, of differential of the employee." Once invoked, the relief available is not dependent upon specific authority. That is the fair reading of the [Back Pay Act]. 5 U.S.C. § 5596(b)(1)(A)(i) sets relief at "an amount . . . which the employee normally would have earned or received during the period if the personnel action had not occurred . . . .[emphasis added]."
Id. Arbitrator Moore also noted that several provisions of the parties' collective bargaining agreement confirm that there are established pay days. Arbitrator Moore found that the provisions of the parties' agreement are sufficient to establish specific dates by which payments should have been made, such that under section 5596(b)(2)(A)(i) the "'effective date of the withdrawal or reduction'" can be set for each of the claims in this arbitration. Id. at 29. As to the individual determinations for the period when interest is due, Arbitrator Moore ordered the parties to follow the plan established in Arbitrator Popular's award.
III. Positions of the Parties
A. Agency's Exceptions
1. Contrary to Law
The Agency asserts that the Arbitrator's award exceeds the scope of the Back Pay Act, 5 U.S.C. § 5596, and therefore violates the sovereign immunity of the United States and requires the Agency to use its appropriations for purposes for which they were not appropriated.
The Agency argues that the Back Pay Act is a limited waiver of sovereign immunity that must be narrowly construed. The Agency asserts that a narrow construction of the Back Pay Act precludes treating pay delays, per se, as unjustified or unwarranted personnel actions, and that the Back Pay Act generally excludes administrative errors and pay delays from the definition of an unjustified or unwarranted personnel action. The Agency contends that the 1978 amendment to the Back Pay Act, which provided for coverage of omissions, did not include administrative errors or pay delays where the issue of entitlement is not in question and the claim arises from some law other than the Back Pay Act. Rather, the Agency asserts that the Back Pay Act is limited [ v56 p746 ] to claims arising from wrongful personnel actions that affect an employee's entitlements.
The Agency contends that the 1978 amendment to the Back Pay Act "limited 'omissions' to the failure to carry out 'nondiscretionary agency regulation or policy.'" Exceptions at 6 (emphasis in original). The Agency asserts that the "omissions" referenced in the Back Pay Act were of "actions" that otherwise were required by law, rule, regulation or collective bargaining agreement to be carried out. The Agency argues that no such mandatory or nondiscretionary actions were involved in this case, and that no evidence was presented establishing that the last discretionary action had been taken in each of the grievances involved in this case. [n3]
The Agency also asserts that there is no basis for concluding that administrative delays by DFAS in making payments constituted an unjustified or unwarranted personnel action. According to the Agency, even though some pay was withheld, there was no evidence that it was the result of an unjustified or unwarranted personnel action. Accordingly, the Agency asserts that there is no evidence of any personnel action that was not taken or that was taken which was unjustified or unwarranted and that resulted in the withholding of pay. [n4]
2. OPM Regulations
The Agency maintains that the OPM regulations implementing the Back Pay Act are invalid to the extent they overreach the scope of the Act. The Agency contends that the definition of an unjustified or unwarranted personnel action promulgated in OPM's regulations at 5 C.F.R. § 550.803 expands the scope of the Back Pay Act beyond Congressional intent. [n5] The Agency asserts that there is no justification within the Act for OPM's extension of the definition to pay actions as an independent basis for finding an unjustified or unwarranted personnel action.
Additionally, the Agency argues that the OPM guidance is susceptible to a permissive interpretation that permits pay actions to be considered personnel actions under the Back Pay Act, but only where the matter had been sufficiently processed to the point that entitlement to payment was nondiscretionary. In the present matter, however, the grievants' entitlement to payment had not become nondiscretionary in nature. Accordingly, payment would be inconsistent with the OPM regulations.
The Agency contends that Arbitrator Moore imposes on the parties a provision of "'mutual accord'" that was clearly never negotiated at the bargaining table. Exception at 7.
The Agency argues that Arbitrator Moore finds a contractual duty to pay in a timely manner by construing the parties' agreement together with the Overseas Teachers Pay and Personnel Practices Act. According to the Agency, Arbitrator Moore informs the parties of "this much hidden agreement," and then informs the Agency that it is in breach of its duty to pay. The Agency asserts that Arbitrator Moore's decision "to impose this duty on management without having taken evidence of intent is arbitrary, capricious, and reaches a conclusion about a 'mutual agreement' without facts to support the conclusion. Id. [n6]
The Agency challenges Arbitrator Moore's award on the basis that there was a lack of evidence of any personnel action that was taken, a lack of any evidence regarding whether the pay action had become ministerial, and that he did not take any evidence as to what the parties intended by the agreement regarding timely payment. [ v56 p747 ]
B. Union's Opposition
1. Contrary to Law
The Union states that the Agency's exception is merely an attempt to avoid paying interest on Back Pay Act awards for as long as possible. According to the Union, the exception amounts to a "mere disagreement with the clear meaning of and Arbitrator Moore's studied interpretation and application of the Back Pay Act." Opposition at 4. The Union asserts that this disagreement does not constitute a basis for reviewing the award and that the exception is nothing but an effort to relitigate the issue. As such, the Union contends, the exception should be summarily dismissed.
As to the Agency's contention that there is no established day on which the Agency is required to pay employees, the Union states that a "past practice" exists of regularly scheduled pay days after the work is performed. The Union asserts that if the Agency deviates from this practice, it violates the parties' agreement.
In response to the Agency's argument regarding discretionary actions, the Union states that certifying sums clearly owed in accordance with the parties' agreement and the Defense Department Overseas Teachers Pay and Personnel Practices Act involves no discretion or exercise of judgment.
2. OPM Regulations
The Union does not specifically address this exception in its opposition. However, in its opposition to the first exception, the Union contended that the Back Pay Act and 5 C.F.R. Part 550 are ambiguous only to the Agency.
The Union does not respond to this exception.
The Union states that if a nonfact exception is to be advanced, the party filing the exception must identify the nonfact and provide sufficient elaboration on its assertion to permit the Authority to ascertain the validity of the exception. The Union asserts that the Agency has not in its exception identified, much less elaborated on, "the or even a fact" upon which the award is based. Opposition at 12 (emphasis in original). The Union maintains that a legal conclusion based on interpretation of an OPM issuance does not constitute a "fact" underlying the award.
IV. Analysis and Conclusions
A. Office of Personnel Management Regulations Implementing the Back Pay Act May Not Be Challenged in this Proceeding
The effect of the exception regarding the OPM regulations implementing the Back Pay Act, set forth at 5 C.F.R. Part 550, is to request that the Authority review and nullify those regulations.
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; American Federation of Government Employees, AFL-CIO 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 implementing the Back Pay Act, the Authority is not the correct forum. See U.S. Department of Defense, Dependents Schools, Bulzbach Elementary School, Bulzbach, Germany and Federal Education Association, 56 FLRA 208, 212 (2000). If the validity of these OPM regulations is in question, the issue must be raised by an interested party in another forum. Therefore, we deny the exception.
B. The Award Is Not Contrary to Law, Regulation or Sovereign Immunity
When a party's exception challenges an arbitration award's consistency with law, rule, or regulation, the Authority reviews the questions of law raised in the exception and the arbitrator's award de novo. See National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1709 (1998). When applying a de novo standard of review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. Id. at 1710. In making that assessment, the Authority defers to the arbitrator's factual findings. See National Treasury Employees Union, Chapter 50 and U.S. Department of the Treasury, Internal Revenue Service, Carolina District, Charlotte, North Carolina, 54 FLRA 250, 253 (1998).
Under the Back Pay Act, 5 U.S.C. § 5596(b)(1)(A)(i), an award of backpay is authorized only when an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action resulted in the withdrawal or reduction of the employee's pay, [ v56 p748 ] allowances or differentials. See U.S. Department of Health and Human Services and National Treasury Employees Union, 54 FLRA 1210, 1218 (1998). A violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Back Pay Act. See, U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 785 (1998).
Here, Arbitrator Moore found a violation of a contractual right to receive timely payment for the sums owed the grievants. This is sufficient to constitute an unjustified or unwarranted personnel action. Id.
The Agency's Back Pay Act arguments in this case are encompassed by the Back Pay Act arguments made by it in DODEA, Arlington. Here, as there, three interrelated and overlapping arguments are being made: (1) the Back Pay Act does not come into play where the obligation to pay the underlying amount is not in question; (2) delay or omission does not fall under the Back Pay Act unless there is some law, rule or regulation that makes the payment nondiscretionary and by a specific date; and (3) omission or mere delay is not per se an unjustified or unwarranted personnel action.
In DODEA, Arlington, after thoroughly examining the Agency's Back Pay Act arguments, legal precedent cited, and the arbitral record, we concluded that the exceptions there provided no basis for finding the underlying award contrary to the Back Pay Act. In the present matter, we have again examined the Agency's Back Pay Act arguments, the legal precedent cited in support thereof, and the underlying arbitral record. We conclude, for the same reasons set forth in DODEA, Arlington, that the Agency has not shown that Arbitrator Moore's award in the present case is contrary to the Back Pay Act.
As noted in DODEA, Arlington, the administrative or clerical error rule set forth in Comptroller General precedent specifically recognizes that an error or delay in making payment can constitute an unjustified or unwarranted personnel action under the Back Pay Act, even where the obligation to pay the underlying amount is not in question, and even where there is no nondiscretionary law, rule, or regulation mandating action in accordance with specific criteria or by a specific date. Also, as in DODEA, Arlington, there is no arbitral finding that omission or delay is, per se, an unjustified or unwarranted personnel action. Rather, Arbitrator Moore made his finding of an unjustified or unwarranted personnel action based upon a violation of a contractual obligation to make the required payments to these employees in a timely manner. The Authority has found the violation of such a contractual obligation to constitute an unjustified or unwarranted personnel action. See 56 FLRA at 212.
Accordingly, we find that Arbitrator Moore's award is not contrary to law and deny the Agency's exception.
C. The Award Does Not Fail to Draw Its Essence from the Parties' Agreement
The Agency contends that Arbitrator Moore imposes on the parties a provision of "'mutual accord'" that was clearly never negotiated at the bargaining table. Exception at 7. We construe this contention as an exception that the award fails to draw its essence from the parties' agreement.
In order for an award to be found deficient as failing to draw its essence from the collective bargaining agreement, it must be established that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purpose of the collective bargaining agreement as to "manifest an infidelity to the obligation of the arbitrator"; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. U.S. Department of the Navy, Naval Surface Warfare Center, Indian Head, Maryla