U.S. Department of Defense, Education Activity, Arlington, Virginia (Agency) and Federal Education Association (Union)
[ v56 p762 ]
56 FLRA No. 127
U.S. DEPARTMENT OF DEFENSE
FEDERAL EDUCATION ASSOCIATION
September 27, 2000
Before the Authority: Donald S. Wasserman, Chairman and Dale Cabaniss, Member.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Maurice C. Benewitz 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.
This case is related to three prior arbitration awards (Arbitrators Bloch, Hockenberry and Popular), other issued decisions, and several other arbitration cases pending before the Authority regarding payment of interest on arbitration awards. Two of the underlying arbitration cases (Hockenberry and Popular) were also before the Authority regarding payment of attorney fees pursuant to the Back Pay Act. 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.
Arbitrator Benewitz sustained a grievance alleging that the Agency failed to pay the grievant for a pay rate change and failed to pay interest on the backpay. Although the Agency agrees that the grievant is entitled to unpaid salary for time actually worked, the Agency's exceptions claim that the Back Pay Act is not the proper source of authority for paying the grievant and that the grievant is not entitled to interest under the Act. [n1] For the reasons that follow, we conclude that the Agency has not established that the award is deficient under section 7122(a) of the Statute. Therefore, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
The grievant is a teacher who submitted her paperwork for a pay rate change for completion of 30 hours of academic training beyond the Masters degree, on June 18, 1997. The grievant had completed the academic work on June 30, 1987. Because of the statute of limitations, the grievant was entitled to only 6 years of backpay.
After the grievant submitted the application on June 18, 1997, the principal forwarded the papers on July 28, 1997. On November 20, 1997, the grievant was informed that the application was incomplete because the transcripts accompanying the application were not certified. The application, with certified transcripts attached, was resubmitted on January 20, 1998. The application for pay rate change was approved on March 31, 1998. The pay rate change scale for which the grievant had applied was approved on July 27, 1998 retroactive to June 21, 1997. According to an Agency official, numerous corrections to the official personnel folder were required, and mistakes made during the corrections also needed to be rectified. Backpay for 1997-98 was provided on August 13, 1998, but the payment was issued for the wrong step. The principal amount was corrected by a March 11, 1999 payment of $25,599.77, but no interest payment was made.
The grievant filed a grievance on December 15, 1997 after she did not receive the increase despite a number of inquiries. When the grievance was not settled, the matter was submitted to arbitration. The "gravamen" of the proceeding before the Arbitrator concerned whether the grievant was owed interest on the sum that had been paid to her by the government. Award at 2. [ v56 p763 ]
B. Arbitrator's Award
The parties stipulated the following issues for arbitration:
1. Did the Agency violate laws, rules, regulations, past practice, the negotiated agreement, Agency Decisions and/or earlier FLRA/Arbitration decisions by failing to pay the Grievant in a timely manner for a Pay [Rate] Change and by failing to pay interest on the back pay? If so, what shall the remedies be?
2. In regard to [the grievant]:
(a) Did the Agency fail to take necessary actions to timely and properly pay Grievant? If not, is interest due and if so, what is the interest accrual date?
(b) Did Agency's failure to take the necessary actions constitute an Unwarranted or Unjustified Personnel Action[ ]?
(c) Should the Arbitrator retain jurisdiction in order to hear a motion for attorney's fees and costs?
Award at 1-2.
Arbitrator Benewitz noted that this same dispute had been the subject of several prior arbitration awards, involving the same provision of the parties' agreement. He stated that:
[t]his arbitrator does not believe that prior awards have the force of binding precedent, i.e., must be followed. However, where the same contract language is at issue and the same type of controversy under that language has arisen, arbitrators have found that unless a prior award is "egregiously incorrect", those awards have great persuasion force and should be followed.
Award at 8 (emphasis in original).
Arbitrator Benewitz found that entitlement to a pay rate change for additional graduate credits is, "pursuant to [Article 25, Section 2A of the collective bargaining agreement, [n2] ] the Pay Statute and DoD Directive 1400.13, a personnel change over which the Agency has no discretion." [n3] Award at 28. Arbitrator Benewitz found that issuance of an SF-52 by the evaluator is a "ministerial act" in such cases, because the evaluator cannot deny the pay rate change if the credits required by the parties' agreement and the Pay Statute have been presented. Id. at 29. Therefore, according to Arbitrator Benewitz, delay in issuance of the SF-52 and the subsequent SF-50 becomes an "'omission or failure to take an action or confer a benefit[ ]' i.e., an 'unjustified or unwarranted personnel action'." Id. Arbitrator Benewitz concluded that the monies due and paid to the grievant were not simply unpaid salary for time actually worked, as the Agency claimed, but instead were backpay within the meaning of the Back Pay Act. The Arbitrator found that an award of such backpay is entitled to payment of interest.
As to the date by which the grievant should have been paid, Arbitrator Benewitz found that the SF-50 should have issued at once and the grievant should have been paid on the next pay day after March 31, 1998. The Arbitrator determined that all time periods subsequent thereto in which payment was not approved and remitted were violations of Agency "past practice which in the absence of contract language must prevail." Id. at 33.
Accordingly, Arbitrator Benewitz concluded that interest on the March 11, 1999 payment, compounded daily as the law provides, began to accrue on the first pay day after March 31, 1998. The Arbitrator also retained jurisdiction to hear and consider a motion for attorney's fees and costs.
III. Positions of the Parties
A. Agency Exceptions
1. 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. [n4] 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 an unjustified or unwarranted personnel action. [ v56 p764 ]
2. 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 violates the sovereign immunity of the United States. The Agency contends that the grievant is not entitled to backpay with interest, but to restoration of "'unpaid salary for time actually worked.'" Exceptions at 5.
The Agency argues that the Back Pay Act is a limited waiver of sovereign immunity that must be narrowly construed. As such, the Agency asserts, a narrow construction of the Back Pay Act would exclude pay delays, per se, as unjustified or unwarranted personnel actions. According to the Agency, the Back Pay Act generally excluded administrative error and pay delay 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 error or pay delay as the type of omission that would provide a basis for an unjustified or unwarranted personnel action. The Agency relies on an opinion from the Department of Justice and several court decisions, including United States v. Testan, 424 U.S. 392 (1976) (Testan).
The Agency contends that the Back Pay Act clearly and unambiguously requires a finding that there was an underlying unjustified or unwarranted personnel action. In this case, according to the Agency, 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. According to the Agency, it "fully restored her pay before this grievance was heard." Id. at 7. The Agency contends that the grievant did not suffer a personnel action that had deprived her of entitlement. Instead, what is at issue, according to the Agency, is when the payment will arrive. The Agency asserts that the Back Pay Act was not enacted to deal with this class of concerns. The Agency asserts that there is no basis for concluding that administrative delays in making payments, associated with the consolidation of the Agency's payroll function in DFAS, constituted an unjustified or unwarranted personnel action.
The Agency contends that Arbitrator Benewitz attempts to link Article 25 to Article 27 of the parties' agreement to establish a mandatory pay date for all pay. The Agency further asserts that the linkage is inappropriate. We construe the Agency's contention as an exception that the award fails to draw its essence from the parties' agreement.
4. Exceeds Authority
The Agency contends that Arbitrator Benewitz "exceeded his authority by weaving together unambiguous, independent and unique [articles in the parties' agreement], [A]gency past practice and [Agency] Directives to create a rule that works against the government." Exceptions at 24. According to the Agency, there is nothing in law or the agreement that mandates the method or time for processing pay rate changes, and there is nothing in the legislative history of the Back Pay Act, court cases or Comptroller General decisions that have construed the Back Pay Act to suggest that "delay" in processing or paying a salary change may constitute an unjustified or unwarranted personnel action. Id.
B. Union Opposition
1. OPM Regulations
The Union did not specifically address this exception in its opposition.
2. Contrary to Law
The Union states that the Agency's exception is merely an attempt to avoid paying interest on a Back Pay Act award for as long as possible. According to the Union, the exception amounts to a "mere disagreement with the clear meaning of and Arbitrator Benewitz's studied interpretation and application of the Back Pay Act." Opposition at 3. 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 one more time. 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, then it "is simply wrong [ ] [t]he clear [ v56 p765 ] intent of the [parties' agreement] is to the contrary." Id. at 2. The Union also states that the Back Pay Act contains no such requirement.
The Union asserts that cases relied on by the Agency were not decided based on the Back Pay Act. The Union contends that the Back Pay Act and 5 C.F.R. Part 550 are ambiguous only to the Agency. The Union further asserts that the Agency's reliance on an opinion issued by the Department of Justice is misplaced because that opinion does not constitute authority on which Arbitrator Benewitz could base his decision.
In response to the Agency's argument regarding discretionary actions, the Union states that certifying principal which is clearly due in accordance with the parties' agreement and the Defense Department Overseas Teachers Pay and Personnel Practices Act involves no discretion or exercise of judgment. Moreover, the Union notes that several of the cases relied on by the Agency distinguish between nondiscretionary actions and discretionary actions, and that the pay rate change involved here is a nondiscretionary action.
The Union did not specifically address this exception in its opposition.
4. Exceeds Authority
The Union did not specifically address this exception in its opposition.
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, 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 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.
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, 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). [n5] Here, Arbitrator Benewitz determined pursuant to law, regulation and the parties' agreement that monies were owed the grievant for the pay lane change, that the Back Pay Act was applicable, and that interest was due on any backpay under the Back Pay Act. As discussed below, this is a sufficient basis on which to determine that an unjustified or unwarranted personnel action occurred.
The Agency's Back Pay Act arguments in this case are encompassed by the Back Pay Act arguments made [ v56 p766 ] 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 the present matter, we have 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 Benewitz' award in this case is contrary to the Back Pay Act.
As noted in DODEA, Arlington, the administrative or clerical error rule is set forth in Comptroller General precedent. That rule specifically recognizes that an error or delay in making payment can constitute an unjustified or unwarranted personnel action under the Back Pay Act. Moreover, the rule recognizes that such error or delay may constitute an unjustified or unwarranted personnel action 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. The Back Pay Act has been amended to provide that omissions can constitute an unjustified or unwarranted personnel action, and OPM regulations and Comptroller General precedent permitted omissions to constitute an unjustified or unwarranted personnel action even before the statute was amended. See Turner-Caldwell, 61 Comp. Gen. 408, 411 (1982). [n6]
The basic administrative error rule is set forth in Butler, 58 Comp. Gen. 51, 53 (1978), and is discussed in the context of being an exception to the general rule that personnel actions may not be retroactive so as to increase employee compensation. The administrative error rule identifies three situations when an administrative error creates an unjustified or unwarranted personnel action under the Back Pay Act, thereby permitting a personnel action to be retroactive, when the administrative error: (1) prevents a personnel action from being effected as originally intended; (2) results in a nondiscretionary administrative regulation or policy not being carried out; or (3) deprives an employee of a right granted by statute or regulation. Later Comptroller General decisions confirm explicitly that these administrative errors constitute unjustified or unwarranted personnel actions under the Back Pay Act. See Bishop, Comp. Gen. Decision No. B-206,181 (May 5, 1982) (unpublished).
Also, as in DODEA, Arlington, there is no arbitral finding in the present case that omission or delay is, per se, an unjustified or unwarranted personnel action. Rather, Arbitrator Benewitz made his finding of an unjustified or unwarranted personnel action based upon a violation of law, regulation and a contractual obligation to pay the grievant the correct change in the rate of pay to which she was entitled 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.
We have reviewed the other judicial precedent relied on by the Agency and find those decisions unpersuasive. [n7] As discussed above, Arbitrator Benewitz found that the Agency's failure to correctly change the grievant's pay rate constituted an unjustified or unwarranted personnel action and that backpay and interest were due the employee. Consistent with the analysis of the above described Comptroller General cases, the grievant is entitled to backpay with interest in the situation presented here. Accordingly, the Agency's reliance on the other cited cases is misplaced.
Accordingly, we find that Arbitrator Benewitz' 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
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) [ v56 p767 ] 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 an 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, Maryland and American Federation of Government Employees, Local 1923, 55 FLRA 596, 599 (1999); United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 575 (1990).
Arbitrator Benewitz adopted Arbitrator Moore's reasoning on the period for computation of interest, including when pay was to begin. See Award at 31. Arbitrator Moore concluded that there are statutes, regulations, and practices, and provisions of the parties' agreement that require the Agency to pay its teachers salary, allowances, differentials and other remuneration "in a correct and timely manner." Moore Opinion at 4. In his analysis, Arbitrator Moore quoted Article 2, § 4(D) regarding the "established pay days", Article 25 concerning effective date of pay rate change as the first day of the first pay period following the date the education was completed, and Article 44 regarding bi-weekly dues withholding periods. Id. at 28; see also Award at 15. Arbitrator Moore's conclusion that the parties' agreement provides for established pay days and pay periods is based on his interpretation and application of the agreement.
The Agency's argument that Arbitrator Benewitz imposed a condition not provided by the agreement does not establish that the award fails to draw its essence from the collective bargaining agreement under any of the tests recognized by the Authority. Arbitrator Benewitz quoted Article 25, Section 2B of the parties' agreement and his interpretation of the agreement is consistent with its wording and does not manifest a disregard of the agreement. Accordingly, we find that the Agency has not demonstrated that the award fails to draw its essence from the parties' agreement and we deny the exception.
D. The Arbitrator Did Not Exceed His Authority
An arbitrator exceeds his or her authority when the arbitrator fails to resolve an issue submitted to arbitration, resolves an issue not submitted to arbitration, disregards specific limitations on his or her authority, or awards relief to persons who are not encompassed within the grievance. U.S. Department of Defense, Army and Air Force Exchange Service and American Federation of Government Employees, (Worldwide Consolidated Bargaining Unit), 51 FLRA 1371, 1378 (1996). Nevertheless, "the Authority, like the Federal courts, will accord an arbitrator's interpretation of a submission agreement and an arbitrator's formulation of the issue submitted in the absence of a stipulation the same substantial deference accorded an arbitrator's interpretation and application of the collective bargaining agreement." Air Force Space Division, Los Angeles Air Force Station, California and American Federation of Government Employees, AFL-CIO, Local 2429, 24 FLRA 516, 518-19 (1986).
In this case, as relevant here, the issues stipulated by the parties were whether the Agency violated laws, rules, regulations, past practice, the negotiated agreement, Agency decisions and/or earlier FLRA/arbitration decisions by failing to pay the grievant in a timely manner for a pay rate change and by failing to pay interest on the backpay. Therefore, it is apparent that the issues, as stipulated, did not specifically concern whether a delay, per se, constitutes an unjustified or unwarranted personnel action.
The Arbitrator Benewitz' interpretation of the issues before him--focusing on the grievant's pay rate change and payment of interest to the grievant on the monies owed her--was entirely reasonable and directly responsive to the issues as stipulated by the parties. Accordingly, the Arbitrator did not fail to resolve an issue submitted to arbitration, did not resolve an issue not submitted to arbitration, and did not disregard limitations on his authority. Based on the foregoing, there is no basis on which to conclude that the Arbitrator exceeded his authority. See National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, U.S. Army Armament Research Development and Engineering Center, Picatinny Arsenal, New Jersey, 55 FLRA 1166, 1170-71 (1999). Accordingly, we deny the exception.
The Agency's exceptions are denied.
Footnote # 1 for 56 FLRA No. 127
The Agency asserts that the award violates the Back Pay Act and the parties' agreement, but, if the award is found proper, the Agency agrees to and accepts the Arbitrator's calculation that interest does not begin to accrue until after March 31, 1998. See Exceptions at 3. Accordingly, this decision will not discuss the Arbitrator's method of calculating the interest period.
Footnote # 2 for 56 FLRA No. 127
According to Arbitrator Benewitz, Article 25, Section 2A of the parties' agreement specifies what kind of courses will qualify an employee for an increased salary academic pay rate and Section 2B sets forth when such a change will become effective and requires written documentation of when qualification was achieved.
Footnote # 3 for 56 FLRA No. 127
Footnote # 4 for 56 FLRA No. 127
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).
Footnote # 5 for 56 FLRA No. 127
Footnote # 6 for 56 FLRA No. 127