U.S. Department of Defense, Education Activity, Arlington, Virginia (Agency) and Federal Education Association (Union)
[ v56 p1009 ]
56 FLRA No. 175
U.S. DEPARTMENT OF DEFENSE
FEDERAL EDUCATION ASSOCIATION
December 22, 2000
Before the Authority: Donald S. Wasserman, Chairman; Dale Cabaniss and Carol Waller Pope, Members. [n1]
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Timothy D.W. Williams 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 other arbitration cases involving these parties regarding payment of interest on arbitration awards. The underlying background is set forth in detail in United States Dep't of Defense, Education Activity, Arlington, Va., 56 FLRA 711 (2000) (DODEA, Arlington), and will be referred to where necessary in this decision.
Arbitrator Williams sustained a grievance finding that the Agency's failure to pay the four grievants in a timely manner constituted an unjustified and unwarranted personnel action pursuant to the Back Pay Act, and therefore ordered that the grievants be paid interest on the amounts due.
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 four grievants were teachers employed by the Agency. All four experienced various problems with their pay and other benefits which caused the Agency to owe each grievant varying amounts of backpay. The problems included: not being placed in the appropriate pay lane; non-payment of post allowances; improper withholding of insurance and retirement deductions; and unexplained deductions from Thrift Savings Plan Accounts. The Agency has paid some backpay to some grievants, but according to the Union, most were not full payment and none included interest.
When the parties were unable to resolve their differences, the Union filed grievances in all four cases, and subsequently arbitration was invoked. [n2]
B. Arbitrator's Award
The parties stipulated to 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 Grievants in a timely manner 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 the Grievant? If not, is interest due and if so, what are the Interest Accrual Dates?
b. Did the Agency's failure to take the necessary actions violate the collective bargaining agreement and constitute an Unjustified or Unwarranted Personnel Action[ ]?
c. Should the Agency be forced to comply with the Popular Arbitration Award?
d. Should the Agency be forced to pay correct backpay and/or interest, in accordance with the Back Pay Act, accompanied by an audit demonstrating correct payment?
e. Should the Arbitrator retain jurisdiction in order to ensure compliance and hear a motion for attorneys' fees and costs?
Award at 21. [ v56 p1010 ]
Arbitrator Williams first discussed the specifics of each individual grievant's case. See generally Award at 3-20. He noted that his description of the facts for each grievant was based mostly on the recitation of the facts contained in the Union's brief, and that these assertions were unrefuted by the Agency.
He next looked at the issue of whether the Agency had violated "laws, rules, regulations, past practice, the negotiated agreement, Agency decisions and/or earlier FLRA/arbitration decisions by failing to pay the Grievants in a timely manner and by failing to pay interest on the back pay?" Id. at 61. He noted that the primary law at issue was the Back Pay Act, 5 U.S.C. § 5596. He also noted that in order for the Back Pay Act to be implicated, an agency must commit an unjustified or unwarranted personnel action (UUPA), which the Act defines as "the omission or failure to take an action or confer a benefit." Id. at 66. Further, he noted that 5 C.F.R. § 550.803 defines a UUPA as "`an act of commission or an act of omission (i.e. failure to take an action or confer a benefit . . . Such actions include personnel actions and pay actions (alone or in combination).'" Id.
Arbitrator Williams next concluded that the Union's argument, based on Comptroller General precedent, that all of the Agency's actions were nondiscretionary, was persuasive and that the Agency had not refuted its obligation to pay the grievants. Id. at 68. He also found the Agency's argument, that the legislative history of the Back Pay Act indicates administrative delay alone cannot be a UUPA, unpersuasive. Id. at 68-69. He also noted that the regulations promulgated by the Office of Personnel Management (OPM) are not inconsistent with the actual language of the Back Pay Act and that it would be beyond the scope of his authority as an arbitrator to declare a government-wide regulation void. Id. at 69.
Arbitrator Williams next looked at the various cases cited by the Agency in its brief, including United States v. Testan, 424 U.S. 392 (1976) (Testan), Library of Congress v. Shaw, 478 U.S. 310 (1986), Bell v. United States, 23 Ct. Cl. 73 (1991) and various Comptroller General decisions. Award at 72-75. Arbitrator Williams disagreed with the Agency's interpretation of each case and concluded that none supported the Agency's position.
Arbitrator Williams also looked at the Union's argument that earlier awards by arbitrators Bloch, Hockenberry and Popular have "precedential value and are binding on the parties." Id. at 75. Arbitrator Williams noted that all three cases involved the same parties and dealt with the interpretation and application of the Back Pay Act in regard to the Agency's failure to timely pay employees. Id. He concluded that the fact that the Agency did not address any of these decisions in its brief and did not appeal any of them on the merits, left him "in the position of simply having to assume they constitute binding components of the [parties'] [c]ollective [b]argaining [a]greement." [n3] Id. at 76.
Arbitrator Williams next found that an unjustified or unwarranted personnel action had occurred, basing this determination on several grounds. He first found, based on the Bloch, Hockenberry and Popular awards, "in general that the Agency's failure to pay the Grievants in a timely manner constituted an unjustified or unwarranted personnel action and therefore constituted a violation of the Back Pay Act." Id. at 84. Arbitrator Williams next found that the Agency's failure to pay the grievants in a timely manner was a violation of the parties' past practice. Id. at 85-86. In this regard, Arbitrator Williams noted that "[w]hile the contract does not contain a precise statement that establishes a fixed pay day, it is apparent from these references in the contract documents, submitted by the Union, and the Agency's admissions that it did not pay the Grievants in a timely manner, that the Arbitrator concludes that the failure to pay constituted a violation of past practice." Id. at 86-87. Arbitrator Williams also found that the Agency violated the parties' collective bargaining agreement by not paying the grievants in a timely manner. He specifically cited Article 25 of parties' agreement, which states:
Section 2.B. - Completion of Higher Level Education.
A unit employee who completes the advanced education required to qualify for salary under a higher education salary schedule shall be assigned the higher salary rate effective on the first day of the first pay period following the date the education was completed. Such adjustment shall be made upon receipt of written documentation in which the college or university concerned specifies the date when the unit employee completed the advanced education, or the date when the unit employee met the requirements for a specific degree.
Id. at 91. He then found that the Agency did not meet the requirements of this section and that its failure to do so "constitutes an `omission' or `failure to confer a benefit' under the Back Pay Act and OPM regulations. It therefore constituted a UUPA." Id. [ v56 p1011 ]
In regard to one grievant, Arbitrator William also found that the Agency violated Article 45 of the parties' agreement. [n4] Id. at 100. This provision enumerates specific procedures, based on the Debt Collection Act, that the Agency must follow when it is attempting to recover a debt owed to it by an employee. Arbitrator Williams found that "[t]he record contains no evidence that the Agency followed any of these procedures in dealing with [the grievant]. Therefore, the [Agency's] actions violate the labor agreement in a manner not present in the other grievances." Id.
Finally, Arbitrator Williams found that under the Back Pay Act, interest was owed on the amounts due to the grievants. He then summarized each grievant's situation, sustained all four grievances and ordered the Agency to perform an audit to determine exactly what amounts are due. Arbitrator Williams retained jurisdiction in order to insure compliance with his award.
III. Positions of the Parties
A. Agency Exceptions
1. OPM Regulations
The Agency maintains that OPM's regulations defining an unjustified or unwarranted personnel action should be "approached with skepticism." Exceptions at 27, citing a Department of Justice, Office of General Counsel opinion dated May 31, 1994. Specifically, the Agency asserts that the definition of an unjustified or unwarranted personnel action appearing in OPM's regulations at 5 C.F.R. § 550.803 would allow every pay action standing alone to form the basis for finding an unjustified or unwarranted personnel action, a result not contemplated by the statutory language. [n5]
2. Contrary to Law
The Agency contends that it owes no interest payments to the grievants because it does not owe them "backpay." Instead, the Agency argues, the grievants are owed "unpaid salary for time actually worked," which, it asserts, does not fall within the coverage of the Back Pay Act. Exceptions at 5, citing Bradley, et. al. v. United States, 42 Fed. Cl. 333 (1998); Bell v. United States, 23 Cl. Ct. 73 (1991).
The Agency argues that the Arbitrator improperly found that it had committed an unjustified or unwarranted personnel action. Exceptions at 6, citing United States v. Testan, 424 U.S. 392, 405 (1976) (Testan). According to the Agency, the grievants were not subjected to any adverse personnel action as described in Testan, but rather, are only experiencing administrative delay in receiving their pay. Exceptions at 7. In this respect, the Agency generally argues that pay delays, per se, are not violations of the Back Pay Act.
The Agency further argues that the Back Pay Act's coverage of "omissions" is generally limited in scope to those very few circumstances where the omission of a personnel action is based on a mandatory action, such as where an Agency violates a "specific" law, rule, regulation or collective bargaining agreement. Exceptions at 14-16. Accordingly, it argues that a general duty to pay is not equivalent to a mandatory duty to pay by a specific date, and that the Arbitrator failed to show how the parties' agreement creates such a duty. Id. at 19-20. In this regard, the Agency asserts that there can be no "ministerial or mandatory" duty to pay by a date certain "[u]nless a CBA or other agency policy, law, rule or regulation specifies with particularity the terms and conditions of the duty to pay." Id. at 24. It further asserts that it is the Union's obligation to negotiate with the Agency, for inclusion in the parties' agreement, terms which establish conditions of pay which would make the Agency's omissions mandatory and thus invoke Back Pay Act jurisdiction. Id. at 21.
The Agency also argues that Arbitrator Williams' reliance on Arbitrator Bloch's award is in error because "the same critical elements of mandatory duty described . . . as missing from the CBA, policies and regulations, were missing there from when Bloch made his award." Id. It also argues that previous arbitration awards may serve as useful guidance to subsequent decisions, but they are not stare decisis. Id.
The Agency further contends that the errors made by the Agency in placing the grievants in improper pay lanes, improperly withholding pay, etc., were "pay actions" and therefore are outside the scope of the Back Pay Act. Id. at 27. The Agency also claims that provisions like Article 25 of the parties' agreement do not specify a date certain by which employees must be paid, but merely set an accrual date. Id. [ v56 p1012 ]
Finally, the Agency asserts that one grievant's claim, that the Agency improperly carried out administrative offsets to recover overpayments, does not establish a UUPA. Id. at 28. The Agency also argues that the parties did not address this issue at arbitration and its consideration on appeal is untimely. Id.
3. The Award Fails to Draw Its Essence from the Parties' Collective Bargaining Procedure
The Agency argues that the parties' agreement is not sufficiently specific to require payment of the amount owed the grievants by a date certain. Exceptions at 27. We construe this argument as an assertion that the Arbitrator's award fails to draw its essence from the parties' collective bargaining agreement.
4. The Arbitrator Exceeded His Authority
Finally, the Agency argues that the Arbitrator exceeded his authority when in the absence of a specific law, rule, regulation or provision in the parties' agreement that set forth a specific time for payment, he found payment to be mandatory by a specific date. In this respect, the Agency argues that the Arbitrator was bound to construe any of the above narrowly in favor of the Agency under the doctrine of sovereign immunity. Exceptions at 28-29. The Agency argues that this matter involves the concept of "restored pay" under Comptroller General decisions, as opposed to backpay under the Back Pay Act. Moreover, it argues that by awarding interest under the concept of "restored pay," the Arbitrator impermissibly waived sovereign immunity and, as such, exceeded his authority. Id.
B. Union's Opposition
1. OPM Regulations
The Union did not specifically address this exception in its opposition.
2. Contrary to Law
The Union first asserts that this case provides an opportunity for the Authority to clarify the law and force the Agency and the Defense Finance and Accounting Service to comply with the Debt Collection Act, 5 U.S.C. § 5514. Opposition at 1. The Union argues that Arbitrator Williams correctly found that the Agency violated the Debt Collection Act and that this violation constituted an unwarranted or unjustified personnel action. [n6] Id. at 2.
The Union next contends that despite Agency claims to the contrary, an Agency regulation requires it to pay its employees by a date certain. It argues that under the Department of Defense Financial Management Regulation (FMR), DOD 7000.14-R, the Agency is required to pay any pay or allowances owed in a "prompt and accurate" manner. Opposition at 9-10. As such, it maintains that there is no discretion or judgment on the part of the Agency to delay making these payments. Id. at 10-11. Therefore, it argues that the cases relied upon by the Agency actually support the Union's position, since matters involving discretion fall outside the Back Pay Act, while those matters not involving discretion do not. Id.
The Union also argues that the cases cited by the Agency clearly show that this is not a matter of unpaid salary for time actually worked, but rather falls under the Back Pay Act. Id. at 12-13. It states that, "the Pay Statute [n7] and Article 25 of the CBA mandate the payment of more money to the Grievants. There is no gap for the Back Pay Act to fill." Id. at 11.
Moreover, the Union argues to the extent the Agency is asserting that it never took the "last internal discretionary act" of having its pay agent approve payment, such action is not discretionary. Id. at 15.
3. The Award Fails to Draw Its Essence from the Parties' Collective Bargaining Procedure
The Union did not specifically address this exception.
4. The Arbitrator Exceeded His Authority
The Union did not specifically address this exception.
IV. Analysis and Conclusions
A. Office of Personnel Management Regulations Implementing the Back Pay Act May Not Be Challenged in this Proceeding
The Agency's arguments regarding 5 C.F.R. Part 550, the OPM regulations implementing the Back Pay Act, in effect ask the Authority to review these OPM regulations. The Agency suggests that the regulations go beyond the scope of the Back Pay Act in stating that the omission of a pay action is an unjustified or unwarranted personnel action. [ v56 p1013 ]
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; AFGE, 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 United States Dep't of Defense, Dependents Sch., Bulzbach Elementary Sch., Bulzbach, Germany, 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 NFFE, Local 1437, 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 NTEU, Chapter 50, 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 United States Dep't of Health and Human Serv., 54 FLRA 1210, 1218-19 (1998). A violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Back Pay Act. See United States Dep't of Defense, Dep't of Defense Dependents Sch., 54 FLRA 773, 785 (1998).
In this case, Arbitrator Williams found a violation of a contractual right to receive timely payment based on the past practice of the Agency paying its employees on the next scheduled payday after work is performed. 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 by it in DODEA, Arlington, 56 FLRA 711. Here, as in that case, 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 requires it to be made 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 the Arbitrator'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. This is so 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 in the present case that omission or delay is, per se, an unjustified or unwarranted personnel action. Rather, Arbitrator Williams made his finding of an unjustified or unwarranted personnel action based upon the Agency's failure to pay the grievant in a timely manner as established by the parties' past practices. The Authority has previously held that the finding of a past practice by an Arbitrator is a matter of contract interpretation. See United States Dep't of the Navy, Navy Public Works Center, San Diego, Ca., 48 FLRA 679, 684 (1993) (exception, which contended that the arbitrator's rejection of an alleged past practice was contrary to Authority precedent, was denied because it concerned the arbitrator's interpretation and application of the collective bargaining agreement). Therefore, based on Arbitrator Williams' finding of a past practice, the [ v56 p1014 ] Agency had a contractual obligation to pay the grievant in a timely manner.
Moreover, even if the Arbitrator's finding with respect to past practice did not rise to the level of a contractual violation, his findings that delay in payment of the various entitlements violated the parties' collective bargaining agreement provide a sufficient basis for his finding of an unjustified or unwarranted personnel action under the administrative error rule.
We have reviewed the other judicial precedent relied on by the Agency and find those decisions unpersuasive. [n8] As discussed above, Arbitrator Williams found that the Agency's failure to pay the grievants in a timely manner was a violation of past practice and constituted an unjustified or unwarranted personnel action such that backpay and interest were due the grievants. Consistent with the analysis of the above described Comptroller General cases, the grievants are entitled to back pay with interest in the situation presented here. Accordingly, the Agency's reliance on the other cited cases is misplaced.
As such, we find that the Arbitrator'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
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) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to "manifest an infidelity to the obligation of the arbitrator"; or (2) does not represent a plausible interpretation of the agreement; or (3) cannot in any rational way be derived from the agreement or evidences a manifest disregard of the agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990).
Here, the Arbitrator's conclusion that the Agency has a duty to pay the grievant in a timely manner is supported by the parties' past practice of routinely paying employees on the next scheduled payday after the work is performed. Award at 86. The Agency has not identified any contract language that would contradict the Arbitrator's conclusion. As such, the Agency has not demonstrated that the award is implausible, irrational, or in manifest disregard of the parties' collective bargaining 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. United States Dep't of Defense, Army and Air Force Exch. Serv., 51 FLRA 1371, 1378 (1996).
The Agency contends that the Arbitrator exceeded his authority by determining that interest was due in the absence of a specific law, rule, regulation or provision in the parties' agreement mandating the time for payment of the money owed. The Agency claims that the Arbitrator ignored sovereign immunity by awarding interest for a remedy based under the concept of "restored pay" as opposed to backpay under the Back Pay Act. However, this argument is little more than the Agency again seeking analysis of one of its contrary to law arguments. We have determined that the Arbitrator's award in this regard is not contrary to law. Accordingly, this exception is denied.
The Agency's exceptions are denied.
Footnote # 1 for 56 FLRA No. 175
Footnote # 2 for 56 FLRA No. 175
Footnote # 3 for 56 FLRA No. 175
Arbitrator Williams found the previous awards binding based on Article 12, Section 6.G. of the parties' agreement, which states that an arbitrator's award "will be binding on both parties unless an exception to the [a]ward is filed." Award at 76.
Footnote # 4 for 56 FLRA No. 175
Footnote # 5 for 56 FLRA No. 175
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 # 6 for 56 FLRA No. 175
The Authority does not find it necessary to reach this issue at this time as there are other, independent grounds on which to find a UUPA. We therefore and do not address this argument in the analysis portion of this decision.
Footnote # 7 for 56 FLRA No. 175
Footnote # 8 for 56 FLRA No. 175
Abramson v. United States, 42 Fed. Cl. 621 (1998) (addressed whether claim under Fair Labor Standards Act was required to be processed through negotiated grievance procedure instead of raising claim before the court); Brown v. Secretary of the Army, 918 F.2d 214 (D.C. Cir. 1990) (Back Pay Act waiver of sovereign immunity did not authorize prejudgment interest on backpay awards to federal employees denied promotions on basis of discrimination, where there was no proof that employees would have been selected for promotion); Hambsch v. United States, 857 F.2d 763 (Fed. Cir. 1988) (Claims Court did not have subject matter jurisdiction over employee's claim regarding sick leave); Spagnola v. Stockman, 732 F.2d 908 (Fed. Cir. 1984) (employee