File 2: Opinion of Member Wasserman
[ v57 p270 ]
Member Wasserman, dissenting in part:
I disagree with the determination to find the award deficient under prong II of the BEP test. Since the development of the two prong test in BEP in 1997, the Authority has automatically required that arbitration awards that affect management rights pass muster in two respects: contract language must have been negotiated pursuant to section 7106(b) or applicable law, and the action ordered must be a reconstruction of what the agency would have done in the absence of a violation of law or contract.
The facts of this case and the terms of this award prompt me to reevaluate the application of prong II in circumstances where reconstruction is not feasible. In this case, the Arbitrator found that the supervisor's search of the grievant's desk and related actions violated various contractual provisions, by failing to treat the grievant with dignity and respect; by failing to obtain written permission to search the desk; and by failing to communicate with the grievant about her performance. Once the desk was searched and the violations occurred, there really was no possibility of reconstructing what would have happened in the absence of such violations. Once an indignity occurs, it cannot be undone. Ordering an apology, as arbitrators often do, or ordering a reassignment, as was done in this case, do not really reconstruct history, but such awards certainly constitute appropriate remedial relief.
Upon reexamination of situations such as presented here and the applicable law, I now conclude that the requirement of reconstruction in all situations is one that was not dictated by the Statute or the Supreme Court decision in IRS v. FLRA, 494 U.S. 922 (1990) (IRS). Indeed, it has become apparent to me that a mechanical, rigid and unquestioned application of the reconstruction framework that calls for its mandatory use in every instance leads to outcomes that can only be described as bad law. It has little to do with a question of policy as the majority opinion suggests. See slip op. at 15.
It is clear to me that we have, at the very least, overstated the significance, as well as the requirement, of reconstruction. In many cases, and certainly in this one, application of prong I of BEP properly and adequately protects management prerogatives under the Statute. It is prong I that reflects the language and structure of § 7106 of the Statute. The first two clauses of § 7106 really set the structure of management rights. There is a broad prohibition with a specified exception: subject to subsection (b), nothing in the Statute shall affect the authority of management to exercise the rights enumerated in subsection (a). In addition, there is the [ v57 p271 ] list of § 7106(a)(2) rights with the additional condition that they must be exercised in accordance with applicable laws. Prong I sets forth basic principles that are expressly based on the language of § 7106(a). The basic principle of § 7106(a)(1) is that an arbitration award may permissibly affect the exercise of a management right only when remedying the violation of a contract provision negotiated under § 7106(b). The basic principle with respect to § 7106(a)(2), is that with a limited exception for § 7131(d) of the Statute, an arbitration award may permissibly affect the exercise of a management right in only two circumstances. Those circumstances are: (1) as a remedy for the violation of a contract provision negotiated under § 7106(b); or (2) as a remedy for the violation of applicable law. Consistent with these principles and the language and structure of § 7106, prong I of BEP examines whether the award provides a remedy for the violation of a contract provision negotiated under § 7106(b) or, as to § 7106(a)(2) rights, an applicable law.
The focus of the Authority's analysis in BEP was on prong I, primarily in response to the ruling in IRS. In IRS, the Supreme Court overturned the Authority and D.C. Circuit Court of Appeals when it determined that a proposal was non-negotiable which would, in effect, subject an agency's contracting out decisions to arbitral review. As the Authority described in BEP:
First, the Court held that the "nothing in this chapter" language of section 7106 means that nothing in the entire Statute, including grievance arbitration under section 7121, can affect the authority of management officials to exercise, in accordance with applicable laws, the management rights enumerated in section 7106(a)(2) of the Statute. 494 U.S. at 928. Second, in construing the "in accordance with applicable laws" language of section 7106(a)(2), the Court ruled that the Statute does not empower unions to enforce all external limitations on the enumerated rights, but only those limitations contained in applicable laws. Id. at 931. Third, the Court rejected a construction of the Statute that would equate the term "applicable laws" with the phrase "any law, rule, or regulation" in section 7103(a)(9) of the Statute. [Footnote omitted.]
BEP, 53 FLRA at 151-52.
Based upon the Supreme Court's assessment of the relevant statutory provisions, the Authority established an approach to reviewing arbitration awards that was thought to avoid treading on the statutory mandate that nothing shall affect the authority of any management official to exercise the rights enumerated in section 7106(a). In our effort to follow the instruction of the Court, I think we - certainly I -- lost sight of some aspects of the Statute and the decision in IRS that would moderate or conceivably eliminate the reconstruction analysis.
First, IRS was based in large part upon the Court's assessment of the phrase applicable law. Of particular importance was the Court's determination that applicable law could only refer to laws outside the Act. IRS, 494 U.S. at 930. The Court noted that the Authority had the mistaken assumption that § 7106(a) [wa]s irrelevant. Id. at 933. In BEP, the Authority did not assess the effects of the wording of § 7106(a) itself, which makes all of the enumerated management rights subject to subsection (b) of this section. By hanging on to the reconstruction requirement in every case, BEP ignores what the Authority and courts had been stating in connection with the relationship of § 7106 (a) and (b) in other cases. See NAGE, Local R5-184, 51 FLRA 386 (1995); Association of Civilian Technicians, Montana Air Chapter No. 29 v. FLRA, 22 F.3d 1150, 1155 (D.C. Cir. 1994) ("§ 7106(b) is indisputably an exception to § 7106(a)"). In other words, management rights may be affected by negotiated provisions under § 7106(b). As more fully explained below, provided that an arbitrator enforces such language, and does so consistent with generally accepted legal tenets regarding arbitral authority, management rights are protected. [n1]
Second, BEP applied the teachings of IRS, a negotiability case, without reference to the unique aspects of arbitration that Congress intended to preserve in the federal sector. In particular, the Authority has held that there are fundamental differences under the Statute between negotiation of, and arbitration concerning, a collective bargaining agreement. Dep't of the Treasury, United States Customs Serv., 37 FLRA 309, 313 (1990) (Customs Serv.). These differences were not fully considered in BEP.
The prong II reconstruction requirement of BEP was essentially a reiteration of the Authority's explanation of the concept in Soc. Sec. Admin., 30 FLRA 1156 (1988) (SSA). BEP, 53 FLRA at 151, citing United States Dep't of Health and Human Services, Soc. Sec. Admin., 34 FLRA 323, 328 (1990). In SSA, the Authority held that when an arbitrator knows from the record [ v57 p272 ] what performance rating a grievant should have had, the arbitrator may award that rating. Id. at 1160. This approach has been labeled reconstruction, borrowing from the terminology of early cases where the Authority discussed arbitrators' authority to order the agency to reconstruct unlawful selection actions or contracting out decisions to conform with legal requirements. See, e.g., Def. Contract Admin. Serv. Mgmt. Area (DCASMA), Cedar Rapids, Iowa, 10 FLRA 547 (1982); Headquarters, 97th Combat Support Group (SAC), Blytheville Air Force Base, Ark., 22 FLRA 656 (1986).
Where the Authority (including me) misconceived the earlier cases is to adopt reconstruction as a constraint on the remedial authority of arbitrators rather than as an expansion of remedial authority, as the Authority did in the earlier cases, and to apply it indiscriminately to all management right cases. The earlier cases all involved instances of making the grievants whole. Moreover, the earlier cases all involved arguments by the agencies claiming that the awards conflicted with management rights because the arbitrators substituted their judgment for that of management. Accordingly, the acknowledgment by the Authority of the reconstructive nature of the awarded remedies served to deny that there was any substitution of judgment involved in such remedies. Consequently, if the focus is going to be on bad law, I suggest the focus begin with the indiscriminate application of a framework that does not fit all cases and has no basis in the Statute. Although in BEP, the Authority suggested that prong II is compelled by the language and structure of § 7106, I find nothing in the language or structure of that section that addresses remedies much less compels reconstruction.
Here, the majority attempts to mask this lack of statutory support for the prong II standard by asserting that such a standard is necessary to ensure that an agency's § 7106(a) rights are limited only to the extent bargained by the parties. Long ago, it seems to me, Customs Service made clear that such issues are not management rights issues, but are issues of the interpretation and application of the parties' collective bargaining agreement.
My predecessors on the Authority have stated:
We expect that, as part of their negotiation process in reaching agreement on the provision, including it in their collective bargaining agreement, and subjecting the agreement to agency head review for legal sufficiency under section 7114(c) of the Statute, the parties will have assessed the effect of the provision on management's rights and the benefits to employees from the provision.
. . . .
We believe that when the provision enforced by the arbitrator is within the range of matters that can be bargained, application of considerations that are part of the negotiation process in resolving exceptions to arbitration awards is unwarranted. Application of such considerations is not compelled by any of the principles of section 7106, including the principle that management rights are not waivable, and disserves the purposes and policies of the Statute. Section 7106 prohibits an agency from agreeing to a provision that abrogates management's rights.
. . . .
Of course, the arbitrator's interpretation and application must draw its essence from the parties' collective bargaining agreement and cannot simply reflect the arbitrator's own notions of industrial justice. Paperworkers v. Misco, 484 U.S. 29, 38 (1987). The arbitrator may not ignore the plain language of the agreement. Id.
Customs Serv., 37 FLRA at 314-17. Thus, it is by means of an essence challenge that impositions of contractual constraints never agreed to are addressed.
The majority assumes without deciding that the award complies with prong I of the BEP analysis. I have no such hesitancy in reaching that result. Clearly, the Arbitrator was enforcing a provision that was negotiated pursuant to § 7106(b) and the Agency does not contest that the provisions at issue were negotiated pursuant to § 7106(b)(2) and/or (b)(3) of the Statute.
Without a doubt, if a supervisor has been found to violate a requirement to treat an employee with courtesy, dignity and respect, ordering the agency to transfer the employee or to change the supervisory reporting lines is a responsive award. It may not have been the exact action that the Agency would have taken as a first step after the grievance was filed, but when the Agency agreed to live by the terms of Article 3, it is deemed to have known that an arbitrator could enforce the language and to order a remedy that responds to the violation. Here, the award is grounded in contract language that has been negotiated as an exception to management rights. No more is necessary. If more were necessary, however, I would emphasize that the Agency's action in reassigning the supervisor well before issuance of the award demonstrates what little effect the award had on [ v57 p273 ] the exercise of management's rights. The Arbitrator simply reaffirmed the Agency's own decision on this point.
In sum, I would modify the BEP standard to state that in cases where a management right is affected, reconstruction is not a requirement where an arbitrator finds a violation of a collective bargaining agreement negotiated pursuant to § 7106(b) and reconstruction is not feasible. I would discard the mandatory use of the second prong of BEP in such situations. It misapprehends the relationship between the negotiation of an agreement provision and an arbitrator's award issued to remedy a violation of that provision. In my view, when Congress authorized negotiations on matters covered in § 7106(b), that authorization included arbitration awards which give effect to those § 7106(b) matters the parties agree to negotiate. However, those remedies must bear a reasonable and direct relationship to the provision being effectuated. Collective bargaining is a single on-going process, a continuum if you will: the parties' negotiating a provision; the interpretation of that provision by an arbitrator; and the arbitrator's remedy for a violation of the provision. I believe this was established by the Supreme Court in United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599 (1960). In short, when Congress authorized bargaining on § 7106(b) matters, it also authorized arbitrators to issue awards to remedy violations of those provisions. This means that arbitrators' awards must be responsive to the violation.
I would leave for another case the question of whether reconstruction is necessary in any case where an arbitrator enforces contract terms that were negotiated as exceptions to management rights. [n2]
File 1: Authority's Decision in 57 FLRA No. 55
File 2: Opinion of Member Wasserman
Footnote # 1 for 57 FLRA No. 55 - Opinion of Member Wasserman
My colleagues both misstate and go too far in suggesting that my views regarding the scope of arbitral authority somehow trump the management rights clause of the Statute. My views simply recognize, as have the Authority and the courts, that there are permissible effects on the exercise of management rights. As I explain, management rights are protected, not constrained. See slip op. at 14 n.6.
Footnote # 2 for 57 FLRA No. 55 - Opinion of Member Wasserman
As a final point, I note that where an award is found deficient because it does not represent a proper reconstruction, the Authority's practice is to remand the award for resubmission to the arbitrator to determine an appropriate remedy, if the parties are unable to agree on one. See, e.g., United States Dep't of Defense, Dep'ts of the Army and the Air Force, Ala. Nat'l Guard, Northport, Ala., 55 FLRA 37, 42 (1998). While I agre