U.S. Department of Commerce, National Oceanic and Atmospheric Administration, Office of Marine and Aviation Operations, Marine Operations Center, Virginia (Agency) and International Brotherhood of Electrical Workers, Local 80 (Union)
[ v57 p430 ]
57 FLRA No. 77
U.S. DEPARTMENT OF COMMERCE
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, OFFICE OF MARINE
AND AVIATION OPERATIONS
MARINE OPERATIONS CENTER, VIRGINIA
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL 80
July 24, 2001
Before the Authority: Dale Cabaniss, Chairman; Carol Waller Pope and Tony Armendariz, Members. [n1]
Decision by Chairman Cabaniss for the Authority
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Walter J. Gernshenfeld filed by both the Agency and the Union under § 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 and the Agency filed an opposition to the Union's exceptions.
Two grievances were filed concerning whether the Agency improperly exempted the grievant from overtime coverage under the Fair Labor Standards Act (FLSA). [n2] The Arbitrator sustained the first grievance and ordered, as a remedy, overtime pay for two years retroactively from the date of the grievance and prospectively (until such time as the grievant's duties are changed) at the rate of time and one-half less previous payments. He also awarded reasonable attorney fees under the Back Pay Act; but he determined that interest and liquidated damages were not appropriate. The Arbitrator found the second grievance to be untimely and thus nonarbitrable.
For the reasons that follow, we remand the attorney fees, liquidated damages, and interest portions of the award to the parties for resubmission to the Arbitrator, absent settlement, for clarification and/or reconsideration consistent with this decision.
II. Background and Awards
The grievant is a Lead Electronic Technician, GS-12, who works in an area known as The Depot. He works with electronic equipment used on shore and by seagoing vessels. On March 15, 1999, a grievance was filed alleging that the Agency had improperly classified the grievant's status as exempt from overtime under the FLSA. Award at 2. Later, a second grievance was filed alleging that the grievant's work while on an extended detail was nonexempt. This grievance was denied by the Agency as untimely.
The Arbitrator stated the issues as follows:
First Grievance. Is the grievant non-exempt under the [FLSA]? If non-exempt, what shall be the remedy?
Second Grievance. Is the grievance arbitrable? If arbitrable, was the grievant's work while on detail non-exempt work under the [FLSA]. If so, what shall the remedy be.
A. First Grievance
In response to the first grievance, the Agency assigned the Human Resources Division (HRD) to perform a desk audit of the grievant's job. The HRD concluded that the grievant managed The Depot, including the work of two GS-11 Rotating Electronic Technicians. Thereafter, the grievance was denied and the matter was submitted to arbitration.
Before the Arbitrator, relying on 5 C.F.R. § 551.202(i), [n3] the Union suggested that the most important [ v57 p431 ] factor in the case is what is actually done by [the grievant] in the way of work duties. Award at 2-3. The Arbitrator also found this to be a key determination. Id. at 3. The Agency argued that, under 5 C.F.R. § 551.206, the grievant met the definition of an exempt administrative employee in that he met the three tests provided under the regulation concerning primary duty, nonmanual work, and exercise of discretion and independent judgment. [n4] The parties agreed that the grievant spent about one month a year in sea-going duty and that the work done during this time is nonexempt. The parties also agreed that the grievant is not paid nonexempt overtime for this work unless it extends for more than thirty days.
According to the Arbitrator, the parties differed sharply as to the nature of the grievant's other duties. Id. Based on testimony and documentary evidence, the Union argued that the grievant spent more than 50 percent of his work day on nonexempt work. The Agency argued that the grievant's performance plan . . . makes clear that [the grievant] manages the depot and coordinates its repair and maintenance function. Id. at 4. The Agency also questioned the appropriateness of relying upon a Union-generated list detailing certain work responsibilities handled by the grievant. Notwithstanding the Agency's assertions, the Arbitrator found the grievant's overall testimony and that of his colleagues persuasive [in demonstrating] that [the grievant] spends the major portion of his time on non-exempt work. Id. at 5.
The Arbitrator again noted that the key factor for determination is what the grievant actually does. Id. at 6. The Arbitrator found that the grievant did substantially less coordination in the way of work assignments and decisions about repair or buy than anticipated by his performance plan. Id. at 5. The Arbitrator also found that the grievant is spending more time in manual work than the type of activity typically associated with exempt status. Id. at 6.
Even after examining the grievant's actual duties, however, the Arbitrator stated that this does not mean [the grievant] is to be reclassified as a Grade 12, non-exempt employee. Id. Rather, according to the Arbitrator, the Union had demonstrated adequately for the period in question that the grievant's work was more non-exempt than exempt.
In so finding, the Arbitrator stated [t]here is nothing which precludes the Agency from assigning [the grievant] prospectively to duties which require the oversight responsibilities found in his performance plan [more than the] hands-on assignments found listed in his job description and which have dominated his recent work activity. Id. at 7. Noting that there was an expectation by the Agency that the grievant's duties require more coordination than he presently does, the Arbitrator stated that this could be made a specific assignment which, if performed as expected by management, could result in the correct assignment of exempt FLSA status to him.
The Arbitrator then determined that retroactivity was limited to a two-year period from the date of the grievance [because] the Union ha[d] not demonstrated that the Agency['s] response involved improper willful behavior. Id. The Arbitrator further accepted the Agency's argument with regard to interest and awarded no interest. He determined that reasonable attorney fees were appropriate because the Union prevailed in this portion of the case.
He further found that: (1) the application of an arbitrator's award involving compensation for standby duty that was appealed to the Authority and relied on by the Union here concerned a matter that was not included in the grievance before him; [n5] (2) the retention of jurisdiction was conditional on the grievant's position being found nonexempt, which did not occur; instead, the grievant's work, which is subject to change, was found nonexempt. Consequently, the Arbitrator determined that he would not retain jurisdiction as it concerned the standby issue, related matters of liquidated damages, and the two-thirds rule. [n6]
Accordingly, as his award, the Arbitrator found, in pertinent part, that:
1. During the two-year period prior to his March 15, 1999 grievance, [the grievant's] work was primarily that of a non-exempt employee. He has continued to perform non-exempt work for the majority of the time since his grievance. [ v57 p432 ]
2. [The grievant] is awarded the difference between the statutory overtime rate he received and time and one-half for the overtime hours.
Id. at 8.
B. Second Grievance
The grievant was assigned to two 120-day details that extended from November 1998 to July 18, 1999. The grievant filed a grievance alleging that his FLSA exemption status for the work performed while on detail was improper and that he should have been classified as non-exempt during that period. The Agency denied the grievance, finding that it was untimely under the parties' agreement. The Arbitrator found that the grievance was not arbitrable because it was not timely under the agreement.
In addressing the Union's request for attorney fees on this portion of the case, the Arbitrator stated [i]nasmuch as the period of the detail, other than standby duty, is covered by the remedy in the earlier case, I find no basis for award of attorney fees in this portion of the case. Id. at 11.
III. First Grievance
A. Positions of the Parties
1. Agency's Exceptions
First, the Agency contends that the portion of the award finding the grievant's position to be FLSA non-exempt is contrary to 5 C.F.R. § 551.206, a Government-wide regulation. The Agency asserts that the Arbitrator made conclusory findings that the [g]rievant's position should be designated as non-exempt and failed to cite to OPM's regulations or spell out any of the [three applicable] standards set forth in the administrative exemption criteria. Agency's Exceptions at 11 n.13.
The Agency contends that, as to possible restructuring of the grievant's job, to the extent that the award purports to regulate the Agency's right to make future work assignments, it is deficient. Specifically, the Agency contends that its right to make future work assignments under section 7106(a)(2)(B) of the Statute is not subject to the Arbitrator's approval or infringement. According to the Agency, insofar as the award concerns future assignments of work, it is not a remedy for a violation of a contract provision or applicable law and is deficient under United States Dep't of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 53 FLRA 146 (1997) (BEP).
Concerning future work assignments, the Agency also contends that the award exceeds the Arbitrator's authority because it concerns matters that were not submitted to, or defined by the Arbitrator. Further, insofar as the award provides that any future job restructuring, should such occur, would be subject to the grievance procedure, the Agency claims that it exceeds the Arbitrator's authority because this issue was not submitted to the Arbitrator.
As to the award of attorney fees under the Back Pay Act, the Agency asserts that this case was brought under the FLSA and, therefore, under Authority and court precedent, the grievant's remedy is limited to those provided in the FLSA.
2. Union's Opposition
The Union asserts that the award is not contrary to any regulation. According to the Union, consistent with 5 C.F.R. § 551.202(i), the Arbitrator found that the grievant performed nonexempt work based on the testimony of the grievant and other electronic technicians as to the actual work performed by the grievant.
As to the Agency's exceptions claiming that the Arbitrator improperly regulated future work assignments and defined future grievance rights, the Union asserts that the award is merely advisory and does not furnish a basis for Authority review. Id. at 11.
The Union contends that the Agency's exception concerning attorney's fees is premature. Id. at 12. According to the Union, although the Arbitrator determined that the grievant is entitled to attorney fees, the amount is yet to be determined. The Union states that this matter will be decided by the Arbitrator after the exceptions are resolved.
Citing Social Security Administration v. FLRA, 201 F.3d 465 (D.C. Cir. 2000) (SSA v. FLRA), the Union also contends that attorney fees are appropriate under either section 216(b) of the FLSA or the Back Pay Act.
3. Union's Exceptions
The Union contends that the grievant is entitled to liquidated damages pursuant to 29 U.S.C. § 216(b) or, in the alternative, interest under the Back Pay Act for the time period beginning two years before the date on which the grievance was filed through the present. [n7] Union's Exceptions at 4.
As to liquidated damages, citing FDIC, the Union claims that the Agency did not establish, and has presented no evidence to show, that the act or omission giving rise to its violation of the FLSA was in good faith. According to the Union, the sole basis for the Arbitrator's [ v57 p433 ] decision to deny liquidated damages was that he found the grievant's work rather than his position to be non-exempt. Id. at 6. The Union asserts that this finding is irrelevant to a determination of whether the grievant is entitled to liquidated damages. Consequently, the Union argues that the Arbitrator's denial of liquidated damages is legally insufficient.
Alternatively, the Union argues that, assuming that liquidated damages are not appropriate, the grievant is entitled to interest under the Back Pay Act. The Union asserts that courts have recognized the Back Pay Act as a waiver of sovereign immunity with respect to interest claims on awards arising under other statutes, such as the FLSA. The Union further asserts that although liquidated damages and interest cannot be awarded for the same period, where the Authority determines liquidated damages do not apply, interest is required under the Back Pay Act.
4. Agency's Opposition
The Agency asserts that the award is not contrary to 29 U.S.C. § 216(b).
According to the Agency, at the beginning of the hearing the Arbitrator stated that he would bifurcate the proceeding and, if he found a FLSA violation, he would reopen the case for further proceedings on whether liquidated damages would be awarded. The Agency contends that the Arbitrator acted within the discretion afforded by 29 U.S.C. § 260 and found that it was not liable for liquidated damages. The Agency asserts that the Union has not pointed to any evidence to show that the Agency acted unreasonably or in bad faith.
Noting that the Arbitrator stated that he would bifurcate the case, the Agency acknowledges that neither party addressed the issue of liquidated damages at the hearing. The Agency requests that if the Authority grants the Union's exceptions on this matter that the Authority remand the case for resubmission to the Arbitrator, with an instruction that the Agency be permitted to produce evidence on liquidated damages. [n8]
With respect to the Back Pay Act, the Agency asserts that this case is brought under the FLSA, which does not contain a waiver of sovereign immunity for awards of interest against the United States. Citing NTEU, 53 FLRA 1469, 1485-88 (1998) (FDIC), the Agency argues that grievant's remedy is limited to that provided under the FLSA. The Agency notes SSA v. FLRA, where the court stated, [w]e have recognized the Back Pay Act as a congressional waiver of sovereign immunity from interest claims on awards arising under other statutes, such as the FLSA. 201 F.3d at 468 (citations omitted). However, the Agency argues that SSA v. FLRA is not binding here because this case arose in the Fourth Circuit and not the D.C. Circuit of the Unites States Court of Appeals.
B. Analysis and Conclusions
1. The Arbitrator's Finding that the Grievant Is Nonexempt Under the FLSA Is Not Contrary to 5 C.F.R. § 551.206
Under § 7122(a)(1) of the Statute, an arbitration award will be found deficient if it conflicts with any law, rule or regulation. Overseas Education Association, 51 FLRA 1246, 1251 (1996). As the Agency's exceptions involve the award's consistency with law, the Authority reviews questions of law raised by the award and the Agency's exceptions de novo. NTEU, Chapter 24, 50 FLRA 330, 332 (1995). In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id. An arbitrator's failure to apply a particular legal analysis "does not render [an] award deficient because, . . . in applying the standard of de novo review, the Authority assesses whether the arbitrator's legal conclusions are consistent with law, based on the underlying factual findings." AFGE, Nat'l Border Patrol Council, 54 FLRA 905, 910 n.6 (1998).
Section 551.206 of title 5 of the Code of Federal Regulations establishes the criteria used to determine an employee's status under the FLSA. However, under OPM's regulations implementing the FLSA for Federal employees, the designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee. 5 C.F.R. § 551.202(i). See United States Dep't of the Navy, Naval Explosive Ordinance Disposal Tech. Div., Indian Head, Md., 56 FLRA 280, 284 (2000) (citing Berg v. Newman, 982 F.2d 500 (Fed. Cir. 1992) and other cases). [ v57 p434 ]
The Arbitrator specifically recognized that the grievant's exemption status required the application of 5 C.F.R. § 551.202(i) to the three criteria set forth in 5 C.F.R. § 551.206, namely the primary duty test[;] nonmanual work test[;] and discretion and independent judgment test. Award at 3. Applying these criteria to the grievant's actual duties, the Arbitrator found that the grievant spends the major portion of his time on non-exempt work. Id. at 5. He found that: (1) the grievant did substantially less coordination in the way of work assignments and decisions about repair or buy than anticipated by his performance plan; (2) the grievant is spending more time in manual work than the type of activity typically associated with exempt status; and (3) in actuality his duties were more on the order of the rotating electronic technicians he was supposed to be leading. Id. at 5 and 6.
Under 5 C.F.R. § 551.206, an employee must meet all . . . of the criteria . . . [,] to be exempted from FLSA overtime based on the administrative exemption. The Arbitrator's factual findings, to which we defer, demonstrate that the grievant does not perform predominantly nonmanual work, and thus does not meet the nonmanual work test under 5 C.F.R. § 551.206. Award at 6; 5 C.F.R. § 551.206(b). Consequently, it is not necessary to address the other two parts of the three-part test. The Agency's arguments fail to establish that the Arbitrator's conclusion that the grievant is nonexempt is contrary to the requirements of 5 C.F.R. § 551.206.
2. The Arbitrator's Comments that the Agency Is Free to Restructure Grievant's Duties, and that the Effect of Such Restructuring Is subject to the Grievance Procedure In the Future: (1) Are Not Contrary to the Right to Assign work; and (2) Do Not Exceed the Arbitrator's Authority
As to the arguments concerning future work assignments for the grievant and the grievability and arbitrability of any such assignments, the issue in the first grievance, as framed by the Arbitrator, concerned whether the grievant was nonexempt under the FLSA. There is no indication that the Arbitrator's comments concerning the Agency's future assignment of work, and the grievability and arbitrability of such assignments, played a part in his determinations of whether the grievant was non-exempt based on the work currently performed. Therefore, we conclude that those statements constitute dicta and do not provide a basis on which to conclude that the award is contrary to law or in excess of the Arbitrator's authority. See, e.g., NFFE, Local 1827, 52 FLRA 1378, 1384-85 (1997) (citing AFGE, Local 1668, 51 FLRA 714, 719 (1995) (comments or dicta are statements separate from the award and provide no basis for finding the award deficient). Accordingly, the Agency's arguments provide no basis for finding the award deficient.
3. A Remand Is Necessary to Clarify the Award of Attorney Fees
The Arbitrator found that the Agency improperly determined that the grievant's work was exempt rather than nonexempt under the FLSA and awarded the grievant overtime pay under the FLSA and "[r]easonable attorney fees as permitted under the Back Pay Act." Award at 8. Relying on FDIC, the Agency asserts that the Arbitrator's award of attorney fees is deficient because the grievant's remedy is limited to that provided by the FLSA.
The Back Pay Act, 5 U.S.C. § 5596, provides that an employee affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of the employee's pay, allowances or differentials is entitled on correction of the personnel action to reasonable attorney fees related to the personnel action[.] 5 U.S.C. § 5596(b)(1)(A)(ii).
Apart from any entitlement to attorney fees under the Back Pay Act, the FLSA, section 216(b), provides that the court shall, in addition to any judgment awarded to the plaintiff . . . allow a reasonable attorney's fee to be paid by the defendant, and costs of the action. 29 U.S.C. § 216(b). [n9] In FDIC, 53 FLRA 1469, the Authority held that the FLSA itself is a waiver of sovereign immunity, and independently provides a statutory right to money damages . . . . Id. at 1488.
In this case, the Arbitrator did not set forth specific findings or provide any reasons as to why the grievant was entitled to reasonable attorney fees under the Back Pay Act, nor did the Arbitrator, in light of his determination that the grievant was entitled to statutory overtime under the FLSA, explain why attorney fees were not appropriate under the FLSA. Absent such findings, we are unable to assess the legal sufficiency of the award of reasonable attorney fees. In these circumstances, we remand the award to the parties for resubmission to the Arbitrator, absent settlement, for the purpose of clarifying his award of reasonable attorney fees. See, e.g., Alabama ACT, 54 FLRA 229, 233 (1998) (award remanded where arbitrator's one-sentence award failed to set forth findings necessary for the Authority to assess the legal sufficiency of the award). On remand, the Arbitrator [ v57 p435 ] should explain the statutory and factual basis for any award of reasonable attorney fees. [n10]
We reject the Union's contention that, as further proceedings are contemplated, the issue raised by this exception is premature. The Arbitrator specifically awarded reasonable attorney fees as indicated by his statement that [r]easonable attorney fees as permitted under the Back Pay Act are awarded. Award at 8. See, e.g., United States Dep't of the Navy, Naval Aviation Depot, Norfolk, Va., 40 FLRA 154, 157 (1991).
4. A Remand Is Necessary For the Arbitrator To Address the Issue of Liquidated Damages
Section 216(b) of title 29 of the United States Code provides that an employer who violates the provisions of section 206 of the FLSA shall be liable to the employee or employees affected in the amount of . . . their overtime compensation . . . and in an additional equal amount as liquidated damages . . . . The standard for when an award of liquidated damages is appropriate is set forth in 29 U.S.C. § 260, which provides, in pertinent part:
if the employer shows . . . that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA] . . . the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title.
The Authority has held that Section 260, in effect, "establishes a presumption that an employee who is improperly denied overtime . . . be awarded liquidated damages, unless the employer shows that `the act or omission giving rise [to the violation of the FLSA] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA].' FDIC, 53 FLRA at 1481 (citations omitted). An employer who has violated the FLSA bears `a substantial burden of proving that he acted in good faith and on a reasonable belief he was in compliance.' Id. (citations omitted).
In this case, the Arbitrator found that the Agency violated the FLSA by failing to pay the grievant the proper overtime based on his performance of nonexempt work. Although the Arbitrator determined that the Agency's action was not willful as it concerned the appropriate statute of limitation for the recovery of back pay, as the Agency acknowledges, he did not address the issue of liquidated damages. Agency's Opposition at 7 n.4. Rather, the Arbitrator related the Union's request for liquidated damages in this case to the issue concerning standby duty involved in NOAA and determined that as the standby issue was not before him, he would take no action . . . with regard to liquidated damages. Award at 8. This view of the circumstances under which liquidated damages might be awarded, however, was too limited.
Section 260 establishes a presumption that an employee who is improperly denied overtime is entitled to liquidated damages, unless the employer rebuts the presumption as discussed above. Therefore, the Arbitrator erred by concluding that he could not take any action with respect to liquidated damages in this case. Because the Arbitrator did not address liquidated damages for the period covered by his award as to the first grievance, he did not make any findings as to whether the Agency's actions were in good faith and whether the Agency had reasonable grounds for believing that its actions did not violate the FLSA. See, e.g., FDIC, 53 FLRA at 1481-82. Consequently, we remand the issue of liquidated damages to the parties for resubmission to the Arbitrator, absent settlement, to determine whether such liquidated damages should be awarded to the grievant for the period at issue in the first grievance, and whether such liquidated damages, if any, should be limited or reduced based on the Agency's conduct.
5. Interest May Be Awarded
According to the Union, even if liquidated damages are not appropriate, the grievant is entitled to interest under the Back Pay Act. The Agency argues that the FLSA, under which the Arbitrator ordered payment of overtime to the grievant, does not contain a waiver of sovereign immunity for awards of interest against the government.
The Arbitrator did not provide any reasons for not awarding interest. The Arbitrator simply stated, I accept the Agency['s] argument with regard to interest, and no interest is awarded. Award at 7. In the Agency's post-hearing brief, the Agency argued to the Arbitrator that interest was not appropriate because the FLSA does not contain a waiver of sovereign immunity for awards of pre-judgment or post-judgment interest against the United States. Agency's Exceptions, Attachment C. In support, the Agency cited Zumerling v. Marsh, 783 F.2d 1032 (Fed. Cir. 1986). Based on the Arbitrator's statement, we view the Agency's argument as the basis for the Arbitrator's decision. [ v57 p436 ]
In a previous case which involved an interest claim and the FLSA, the Authority stated:
As correctly argued by the [agency], an allowance of interest on a claim against the United States requires an explicit waiver of sovereign immunity by Congress. See Zumerling v. Marsh, 783 F.2d 1032, 1034 (Fed. Cir. 1986) (Zumerling). See also Library of Congress v. Shaw. The court in Zumerling held that the FLSA contained no such explicit waiver, and found no other federal statute that would permit the payment of post-judgment interest in that case. . . . Zumerling [did not] consider whether the Back Pay Act, which was amended in 1987, provides a waiver of sovereign immunity. It is well established that the requisite express waiver of sovereign immunity not contained in a given statute can be supplied by a separate statute. Brown v. Secretary of Army, 918 F.2d 214, 216 (D.C. Cir. 1990), cert. denied, sub nom. Brown v. Stone, 502 U.S. 810 (1991), citing Loeffler v. Frank, 486 U.S. 549 (1988).
Soc. Sec. Admin., 55 FLRA 246, 250 (1999) (footnotes omitted), rev'd on other grounds, SSA v. FLRA, 201 F.3d 465 (D.C. Cir. 2000) (an unfair labor practice case involving compliance with arbitration awards finding violations of the FLSA, wherein the Authority considered whether interest was payable under the Back Pay Act).
On appeal, the court in SSA v. FLRA, like the Authority, recognized the Back Pay Act as a congressional waiver of sovereign immunity from interest claims on awards arising under other statutes, including the FLSA. SSA v. FLRA, 201 F.3d at 468 (citations omitted). However, the court found, contrary to the Authority, that the Back Pay Act does not authorize the FLRA to require an agency to pay interest on liquidated damages awarded under the [FLSA] because liquidated damages do not constitute `pay, allowances, or differentials.' Id. at 473. The court found that the Back Pay Act's allowance of interest against the government is effective only as to awards that come within the scope of the statute, that is, meet the requirements of the Back Pay Act.
Based on SSA v. FLRA, we find that the Back Pay Act operates as a waiver of sovereign immunity permitting interest on awards arising under the FLSA, if the award satisfies the requirements of the Back Pay Act. [n11] However, because an award of both liquidated damages and prejudgment interest . . . would amount to compensating an employee twice for a delay, in payment of monies due under the FLSA, an employee may not recover the full amount of both liquidated damages and interest. Parker v. Burnley, 703 F. Supp. 925 (N.D. Ga. 1988) (citing Spagnuolo v. Whirlpool Corp., 641 F.2d 1109, 1114 (4th Cir. 1981), cert. denied, 454 U.S. 860 (1981)). Accordingly, an employee may not recover both liquidated damages and interest.
Turning to the instant case, the Arbitrator found that the Agency improperly determined that the grievant's work was exempt rather than nonexempt under the FLSA and awarded the grievant overtime pay. Based on the Arbitrator's award, the Agency's action constituted an unjustified or unwarranted personnel action which resulted in the withdrawal or reduction of the grievant's pay, allowances or differentials within the meaning of the Back Pay Act because overtime pay is pay, allowances, or differentials and the failure of the Agency to timely pay such overtime constituted a withdrawal or reduction of compensation. See, e.g., United States Dep't of Veterans Affairs, Med. Ctr., Coatesville, Pa., 56 FLRA 829, 834 (2000). Consequently, interest could, and should, be awarded if the Arbitrator denies liquidated damages.
We find, therefore, that the award is deficient to the extent that the Arbitrator determined that he could not award interest under the Back Pay Act. However, because an employee may not recover both liquidated damages and interest, we remand this part of the award to the parties to resubmit to the Arbitrator. On remand, if the Arbitrator finds that liquidated damages are appropriate, interest may not be awarded. However, if the Arbitrator determines that liquidated damages may not be awarded, the Arbitrator should award interest. [ v57 p437 ]
IV. Second Grievance
A. Position of the Parties
1. Agency's Exceptions
According to the Agency, the portion of the award that grant[ed] relief for a grievance found to be non-arbitrable[,] is deficient. Agency's Exceptions at 12. In this regard, the Agency refers to the Arbitrator's finding that `the period of the detail . . . is covered by the remedy in the earlier case.' Id. (quoting Award at 11). The Agency contends that this portion of the award is contrary to Authority law which stands for the proposition that where a grievance is not arbitrable, no relief can be awarded. The Agency asserts that by awarding relief for a grievance found to be non-arbitrable, the Arbitrator exceeded his authority. The Agency also contends that the award fails to draw its essence from the parties' agreement because there is nothing in the agreement that could form the basis for the Arbitrator's decision to award relief for this grievance.
The Agency further asserts that, even if the Arbitrator could reach the merits of this grievance, this part of the award is contrary to OPM's regulation in that it awards relief without resolving factual issues concerning the grievant's FLSA exemption status while on detail. According to the Agency, a detail by definition envisions the performance of duties different from those in the employee's position of record. Citing 5 C.F.R. § 551.208(b)(1), the Agency asserts that the Arbitrator was required to make a reasoned determination as to whether the primary duties that [g]rievant actually performed while on detail constituted exempt work before he could conclude that the detail position was non-exempt. [n12] Id. at 14.
2. Union's Opposition
According to the Union, the fact that the Arbitrator found the second grievance to be untimely in no way affects the relief awarded for the first grievance. The Union contends that the second grievance was entirely unnecessary and overlapped the timely filed grievance. Union's Opposition at 10. The Union asserts that, based on the FLSA, the grievant's remedy for the first grievance filed on March 15, 1999, extends back two years to March 15, 1997, and forward from that date, based on the non-exempt duties the grievant was actually performing. Therefore, according to the Union, the first grievance encompassed the period of the detail, which was November 22, 1998 to July 18, 1999.
The Union contends that in order to defeat the grievant's statutory entitlement to overtime pay under the FLSA for worked performed while on detail, the Agency was required to prove that the duties performed by the grievant constituted exempt work. The Union asserts that the Agency provided no evidence that the work performed by the grievant was anything other than nonexempt. Id. at 9.
B. Analysis and Conclusions
The Arbitrator's Award on the Second Grievance Does Not Exceed his Authority or Fail to Draw its Essence from the Parties' Agreement; and Is Not Contrary to Law
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. See United States Dep't of the Navy, Naval Base, Norfolk, Va., 51 FLRA 305, 307-08 (1995). In the absence of a stipulated issue, the arbitrator's formulation of the issue is accorded substantial deference. See United States Dep't of the Army, Corps of Engineers, Memphis District, Memphis, Tenn., 52 FLRA 920, 924 (1997).
In this case, the Arbitrator framed the second issue as, Is the grievance arbitrable? If arbitrable, was the grievant's work while on detail non-exempt under the [FLSA]. If so, what shall the remedy be? Award at 2. The Arbitrator specifically found that the grievance is not arbitrable. Id. at 11. Thus, the award is directly related to the issue as framed by the Arbitrator. Before reaching this conclusion, however, the Arbitrator stated that, [i]nasmuch as the period of the detail, other than standby duty, is covered by the remedy in the earlier case, I find no basis for award of attorney fees in this portion of the case. Id. The Agency argues that by this statement the Arbitrator reached the merits of this grievance and awarded relief despite finding that the grievance was not arbitrable.
Contrary to the Agency's argument, the Arbitrator did not address the merits or provide any remedy with respect to the second grievance. The Arbitrator's remedy in the first grievance includes a period of time (during which the grievant was on detail) that a remedy could have been provided for under the second grievance. However, the fact that the second grievance was found untimely does not invalidate the award for the [ v57 p438 ] first grievance. Thus, although the Arbitrator's statement, as set forth above, is somewhat confusing, there is no basis in the record to find that this statement constituted a determination on the merits of the second grievance or an award of relief. Accordingly, we find that the Agency has not established that the Arbitrator exceeded his authority with respect to the second grievance. We also find that, as the Arbitrator did not address the merits or provide any remedy with respect to the second grievance, the Agency's contentions that the award fails to draw its essence from the agreement or is inconsistent with 5 C.F.R. § 551.208 provides no basis for finding the award deficient.
The portions of the award concerning reasonable attorney fees under the Back Pay Act, interest, and liquidated damages are remanded to the parties for resubmission to the Arbitrator, absent settlement, for further findings consistent with this decision. All other exceptions concerning the award are denied.
1. 5 C.F.R. § 551.202 provides in relevant part, as follows:
§ 551.202 General principles governing exemptions.
In all exemption determinations, the agency must observe the following principles:
(a) Each employee is presumed to be FLSA nonexempt unless the employing agency correctly determines that the employee clearly meets one or more of the exemption criteria of this subpart and such supplemental or instructions issued by OPM.
(b) Exemption criteria must be narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption.
. . . .
(d) An employee who clearly meets the criteria for exemption must be designated FLSA exempt. If there is a reasonable doubt as to whether an employee meet the criteria for exemption, the employee should be designated FLSA nonexempt.
. . . .
(i) The designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee.
2. 5 C.F.R. § 551.206 provides, in pertinent part,:
§ 551.206 Administrative exemption criteria.
An administrative employee is an advisor or assistant to management, a representative of management, or a specialist in a management or general business function or supporting service and meets all four of the following criteria:
(a) Primary duty test. The primary duty test . . . is met if the employee's work--
(1) Significantly affects the formulation or execution of management programs or policies; or
(2) Involves management or general business functions or supporting services of substantial importance to the organization serviced; or
(3) Involves substantial participation in the executive or administrative functions of a management official. [ v57 p439 ]
(b) Nonmanual work test. The employee performs office or other predominantly nonmanual work which is--
(1) Intellectual and varied in nature; or
(2) Of a specialized or technical nature that requires considerable special training, experience, and knowledge.
(c) Discretion and independent judgment test. The employee frequently exercises discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.
(d) 80-percent test. [This criteria is applicable to GS employees in positions classified at GS-5 or GS-6 and is not applicable to the employee in this case who is a GS-12].
3. 5 C.F.R. § 551.208 provides, in relevant part, as follows:
§ 551.208 Effect of performing temporary work or duties on FLSA exemption status.
(1) When applicable. This section applies only when an employee must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of the employee's official position description. The period of temporary work or duties may or may not involve a different geographic duty location. The FLSA exemption status of employees during a period of temporary work or duties must be determined as described in this section.
(2) When not applicable. This section does not apply when an employee is detailed to an identical additional position as the employee's position or to a position of the same grade, series code, basic duties, and FLSA exemption status as the employee's position.
(b) Effect on nonexempt employees.
(1) A nonexempt employee who must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of the employee's official position description remains nonexempt for the entire period of temporary work or duties unless all three of the following conditions are met:
(i) 30-day test. The period of temporary work or duties exceeds 30 calendar days; and
(ii) Exempt work or duty. The employee's primary duty for the period of temporary work or duties is exempt work or duty as defined in this part; and
(iii) Positions at GS-7 or above . . . .
. . . .
4. 29 U.S.C. § 216(b) provides, in pertinent part, as follows:
(b) Damages; right of action; attorney's fees and costs; termination of right of action
Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. . . . An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer ( including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated . . . . The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action . . . .
Footnote # 1 for 57 FLRA No. 77
Footnote # 2 for 57 FLRA No. 77
The FLSA of 1938, as amended, 29 U.S.C. 201 et seq. and its implementing regulations issued by the Office of Personnel Management (OPM), codified at 5 C.F.R. pt. 551, provide minimum standards for both wages and overtime entitlements, and delineate administrative procedures by which covered work time must be compensated. As relevant here, the FLSA provides that an agency must compensate an employee for all hours of work in excess of 40 hours a week at a rate equal to one and one-half times the employee's hourly regular rate of pay. See 5 C.F.R. § 551.501. The FLSA also provides that an employee meeting the "administrative exemption criteria" is exempt from the overtime provisions of the FLSA. See 5 C.F.R. § 551.206.
Footnote # 3 for 57 FLRA No. 77
Footnote # 4 for 57 FLRA No. 77
Footnote # 5 for 57 FLRA No. 77
The Union had referred to an Authority decision that involved the same parties and a number of grievants with respect to an issue concerning standby duty, and asked that the Arbitrator increase the requested overtime backpay remedy in this case consistent with the decision in that case. See United States Dep't of Commerce, Nat'l Oceanic and Atmospheric Admin., Office of NOAA Corps Operations, Atlantic Marine Center, Norfolk, Va., 55 FLRA 816 (1999) (NOAA).
Footnote # 6 for 57 FLRA No. 77