U.S. Department of Veterans Affairs, Eastern Kansas Health Care System (Agency) and National Federation of Federal Employees, Local 1765 (Union)

[ v57 p440 ]

57 FLRA No. 78

U.S. DEPARTMENT OF VETERANS AFFAIRS
EASTERN KANSAS HEALTH CARE SYSTEM
(Agency)

and

NATIONAL FEDERATION OF FEDERAL
EMPLOYEES, LOCAL 1765
(Union)

0-AR-3366

_____

DECISION

July 31, 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 a supplemental award of Arbitrator Lawrence H. Pelofsky filed by the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute), 5 U.S.C. § 7100 et seq., and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions.

      The Arbitrator issued an underlying award and subsequently sent a bill for his services to the parties, split equally. [n2]  The Union did not pay its share and when contacted by the Arbitrator, claimed that the parties' agreement mandated that an arbitrator's fees be paid by the losing party. More than 9 months after the initial assessment of fees, the Arbitrator issued a supplemental award titled "Proportional Assessment of Fees," to which the Agency excepts. [n3] 

      For the reasons that follow, we set aside the Arbitrator's supplemental award.

II.     Background and Arbitrator's Supplemental Award

1.     Background

      The Arbitrator issued a decision sustaining the grievance in the underlying case on January 22, 2000; the Arbitrator did not retain jurisdiction. In the cover letter accompanying the decision, the Arbitrator advised the parties that a statement regarding his fee would follow. On January 31, 2000, the Arbitrator sent the parties a statement billing each party one-half of the fee. The Agency paid its half share, the Union did not.

      In response to a request for payment from the Arbitrator, the Union sent the Arbitrator a letter dated July 5, 2000, advising him that the parties' agreement required an apportionment of the costs. [n4]  The Arbitrator asked each party to submit a letter outlining its position on the payment of the Union's share of the fee. The Union's position was that there had been no apportionment of the costs and, because it prevailed at arbitration, the Agency was responsible for the entire Arbitrator's fee. The Agency argued that there had been an apportionment and that the Union's failure to file an exception to the apportionment had resulted in a waiver of any objection to the Arbitrator's determination of the fee allocation. On September 24, 2000, the Arbitrator issued his supplemental award.

2.     Arbitrator's Supplemental Award

      The Arbitrator found that Article 7, Section 3 of the parties' agreement requires an arbitrator to determine the extent to which a party does or does not prevail in a grievance and assess his costs proportionately. The Arbitrator further found that use of the word "'shall'" makes this proportional assessment mandatory. Award at 3. The Arbitrator noted that he was unaware of this particular provision and thus did not make any determination of the extent to which either party did or did not prevail on the issues and did not apportion the costs pursuant to that determination. For this reason, the Arbitrator concluded that "the doctrine of functus officio is not applicable." Id.

      In this regard, the Arbitrator found that the billing statement he submitted to the parties "was not an award." Id. at 4. The Arbitrator made further distinctions between his billing statement and other situations found [ v57 p441 ] in Authority precedent. The Arbitrator noted that the statement was not based upon the terms of the parties' agreement. Additionally, the statement was written on the Arbitrator's stationery and contained no case caption. The Arbitrator concluded that there is no language in the statement "that would lead one to believe that the Arbitrator had made a determination pursuant to Article 7, Section 3A." Id. The Arbitrator also concluded that the assessment of the Arbitrator's costs does not draw its essence from the terms of the parties' agreement. The Arbitrator found that to "relieve the Agency of its legitimate obligation here would defeat the reasonable expectations of the Union and would undermine the clear terms of the collective bargaining agreement." Id. at 5.

      The Arbitrator found that although the "Union might have been prudent" to have raised the issue before the Authority, "failure to do so does not prejudice its rights" under the agreement or pursuant to § 7122. Id. The Arbitrator further found "that the Agency acted in less than good faith." Id.

      Accordingly, the Arbitrator found that the Agency is responsible for the Arbitrator's entire fee. In addition, the Arbitrator calculated the additional time he spent on the supplemental award and split the additional cost in thirds, assigning one-third of the additional cost to each party and one-third to himself.

III.     Positions of the Parties

A.     Agency's Exceptions

      The Agency asserts that the Arbitrator exceeded his authority in issuing the supplemental award. The Agency contends that the Arbitrator lacked jurisdiction to reconsider the issue of apportionment of his fee. According to the Agency, the Union made a unilateral request for reconsideration of that portion of the award ordering each party to pay half of the Arbitrator's fee. The Agency asserts that the Authority has long upheld the doctrine of functus officio, under which an official has no further authority once that official has fulfilled the designated purpose of the office. The Agency further contends that once an arbitrator has issued an award, that arbitrator's power is exhausted, unless both parties request further action by the arbitrator.

      The Agency argues that the Arbitrator's description of his original fee allocation as not a "'real' award" is "specious" because there is no required format that an arbitrator must observe in transmitting his fee assessment to the parties. Exceptions at 5. The Agency contends that once an award becomes final and binding, an arbitrator is without power to change it.

      The Agency argues that if the Union wished to raise any objections to the award, including that portion of the award concerning apportionment of the Arbitrator's fee and expenses, it was required to do so by filing an exception to the award with the Authority within 30 days of service of the award. The Agency contends that because the Union failed to do so, the award became final and binding upon the parties, pursuant to § 7122(b) of the Statute. [n5]  According to the Agency, the Authority has held that failure to timely raise such exceptions renders the award final and binding and that the parties must thereafter take the actions required by the award.

B.     Union's Opposition

      The Union argues that the doctrine of functus officio is not applicable because the Arbitrator did not adjudicate the issue of fees as required by the parties' agreement. According to the Union, where an arbitrator's award has failed to address an issue submitted to the arbitrator, the arbitrator's power and function remain open until he renders an award on that issue. In this case, the Union asserts that the Arbitrator "freely admitted" that he had neglected to consider the agreement provision on mandatory proportional allotment of the arbitrator's fee. Opposition at 3. The Union argues that because the proportional allotment of his fee had not been assessed, the Arbitrator's authority to comply with the mandatory agreement provision had not been exhausted. In sum, the Union contends that the Arbitrator retained jurisdiction because the award was incomplete.

      According to the Union, the allocation of fees is mandatory under Article 7, Section 3A of the parties' agreement. The Union contends that because its interpretation of the agreement prevailed in the underlying grievance, appropriate relief was awarded. The Union asserts that the Arbitrator recognized that the proportional assessment of the arbitration fee and expenses is not discretionary under the parties' agreement and, therefore, the Arbitrator made the "correct assessment of fees because he made the assessment according [to] the mandatory language" of the parties' agreement. Opposition at 2.

IV.     Analysis and Conclusions

      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 [ v57 p442 ] 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).

      There is no contention that the matter of the allocation of the Arbitrator's fees was submitted to the Arbitrator for resolution. In fact, the Arbitrator did not address the allocation of his fees in his award on the merits, and the Arbitrator states in the supplemental award that he was unaware of the requirement that the Arbitrator's fees be proportionally assessed. Supplemental Award at 3. The Union provides no support for its assertion that the issue of the allocation of fees was appropriate for the Arbitrator's resolution because "it was a mandatory determination under the [parties' agreement]." Opposition at 4. Accordingly, as the issue of the allocation of arbitral fees was never submitted to the Arbitrator for resolution, we find that the Arbitrator exceeded his authority by issuing a supplemental award reapportioning his fees. [n6]  See United States Dep't of Veterans Affairs, Med. Ctr., St. Albans, N.Y., 37 FLRA 1092, 1094-95 (1990). Cf. Social Sec. Admin., Baltimore, Md., 57 FLRA 181, 183 (2001) (arbitrator did not exceed authority by addressing issue necessary to decide a stipulated issue).

V.     Decision

      The Arbitrator exceeded his authority in issuing the supplemental award on an issue that had not been submitted to arbitration. Therefore, the supplemental award is deficient and we set it aside.



Footnote # 1 for 57 FLRA No. 78

   Member Armendariz did not participate in this decision.


Footnote # 2 for 57 FLRA No. 78

   The substance of the underlying award is not at issue.


Footnote # 3 for 57 FLRA No. 78

   For purposes of this decision, and in the absence of any argument to the contrary by the parties, we assume that the proportional assessment of fees constitutes an award within the meaning of § 7122(a) of the Statute.


Footnote # 4 for 57 FLRA No. 78

   Article 7, Section 3 of the parties' agreement provides:

     A.     the arbitrator's fees and expenses shall be propo