U.S. Department of the Treasury, Internal Revenue Service (Agency) and National Treasury Employees Union (Union)

[ v57 p444 ]

57 FLRA No. 81

U.S. DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
(Agency)

and

NATIONAL TREASURY EMPLOYEES UNION
(Union)

0-AR-3351

_____

DECISION

August 17, 2001

_____

Before the Authority: Dale Cabaniss, Chairman; Carol Waller Pope and Tony Armendariz, Members [n1] 

I.     Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Samuel A. Vitaro filed by the Agency 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.

      The Arbitrator sustained the Union's grievance alleging that the Agency violated the parties' collective bargaining agreement (agreement) by failing to compensate employees for increased commute time that resulted from a temporary assignment to an alternate office. As a result, the Arbitrator ordered the Agency to comply with the agreement. For the reasons that follow, we deny the Agency's exceptions.

II.     Background and Arbitration Award

      Starting in Fiscal Year 1998, the Agency decided to increase staffing at its District Headquarters in Seattle, Washington. As part of its decision, the Agency temporarily assigned Revenue Officers and Revenue Agents from the Tacoma, Everett, and Bellevue, Washington offices to work at the Seattle headquarters, where the employees were to assist with customer walk-in and telephone functions. The Tacoma, Everett, Bellevue, and Seattle headquarter offices are all located within the official duty station of the Officers and Agents assigned to work at the Seattle Headquarters. The official duty station is defined as a forty mile radius around Seattle. Award at 2. At the time of submission of this case to the Authority, the temporary assignments to the Seattle headquarters were continuing. See Stipulated Facts at 2, attached to Agency's exceptions. The Revenue Officers in this case are covered by the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, while the Revenue Agents are covered by the Federal Employees' Pay Act ("FEPA"), 5 U.S.C. § 5542. However, the temporary duties performed by both groups of employees are considered non-exempt duties and, therefore, are subject to the FLSA. See Stipulated Facts at 4-5.

      The Agency ordered that the employees arrive at the Seattle headquarters by the beginning of their daily tour of duty and depart no sooner than the completion of their tour of duty. As a result of the greater distance involved in travel to Seattle, the time it takes some employees to commute from home to headquarters and back has been considerably lengthened. Additionally, some employees incurred extra child care expenses. The Agency denied the Union's request to compensate employees for any increased travel time.

      In pertinent part, the Union's grievance alleged that the Agency violated the last sentence of Article 29, Section 3E of the parties' agreement when it failed to compensate bargaining unit employees, who had been temporarily assigned to the Seattle headquarters, for their increased commute time. [n2]  As a remedy, the Union sought "'overtime, credit hours, and/or compensatory time and any other remedies that are deemed appropriate.'" Award at 4 n.2. The Agency denied the grievance, and the matter was forwarded to arbitration.

      At arbitration, the parties stipulated the issues as follows:

1.     Does Article 29, Section 3E apply to the temporary assignment of Revenue Officers and Revenue Agents from their normal duty stations to perform Customer Service Staffing Support work at the Jackson Federal Building in Seattle, Washington? [ v57 p445 ]
2.     If Article 29, Section 3E applies to the Customer Service Staffing Support, would its application violate Federal law, rule, or regulation specifically 29 U.S.C. Sections 201, 203, 207; 5 U.S.C. Section 5542, 5544, 6121, 6122; 5 CFR Section 550.112(g); and/or 5 CFR Section 551.422?
3.     If Article 29, Section 3E applies to Customer Service Staffing Support and does not violate Federal law or regulation, what should the remedy be?

Id. at 6.

      First, the Arbitrator found that "the final sentence of Article 29, Section 3E covers the temporary assignment of Revenue [o]fficers and Agents . . . to the Seattle Headquarters." Id. at 8. Specifically, the Arbitrator rejected the Agency's argument that, although the intent of the provision is to allow employees to maintain their same commuting time, it applies "only to a temporary change (i.e., of one day) and not to employees who are assigned another site on a recurring basis, as was the situation with the [g]rievants." Id. at 4. Instead, the Arbitrator agreed with the Union that the language of Article 29, Section 3E is not qualified or limited to one day temporary assignments, and therefore applied the provision to the commute travel being undertaken in this case.

      As to the parties' intent in negotiating the agreement, the Arbitrator found that Article 29, Section 3E "would allow compensation" for commute time. Id. at 15. Addressing the Agency's position that "Article 29, Section 3E, however characterized, would involve . . . prohibited compensation" for commute time within the official duty station, id. at 13, the Arbitrator stated that, "absent compliance with the exceptions in the Portal-to-Portal Pay Act," his interpretation and application of Article 29, Section 3E would be inconsistent with law. Id. at 15. [n3] 

      As to that Act, the Arbitrator found that "Article 29, Section 3E constitutes an `express provision' permitting compensation for commute travel under the Portal-to-Portal Act." Id. at 20. Therefore, the Arbitrator ruled that the Agency "violated the FLSA by not permitting employees to travel to and from the [Seattle headquarters] in accordance with the procedure required by Article 29, Section 3E." Id.

      The Arbitrator summarized his findings and ordered as follows: (1) the employer violated Article 29, Section 3E of the parties' agreement by requiring Revenue Officers and Revenue Agents, who were temporarily assigned to work at the Seattle headquarters, "to arrive at the commencement of their daily tour of duty and not depart before completion of their daily tour of duty" (id. at 22); (2) the Agency "shall cease and desist from failing or refusing to implement Article 29, Section 3E, as to covered employees" (id.); (3) the Agency shall identify the employees who were assigned to work at the Seattle headquarters, and for purposes of any remedy for Revenue Agents, the Agency "shall also identify the length of the temporary duties, and provide that information to the Union within 45 days" of the date of receipt of the award (id.); (4) the Agency has failed to compensate Revenue Officers and Revenue Agents who meet the standards of 5 C.F.R. § 551.208(c) in accordance with the parties' agreement and the FLSA; (5) the Agency's action "constitutes an unjustified or unwarranted personnel action, resulting in a loss of pay to the covered [g]rievants . . . [b]ut for the [Agency's] actions, the [g]rievants would not have suffered such a loss in pay" (id. at 23); (6) in accordance with the parties' agreement, the Union is liable for 25% of the regular fees and expenses; and (7) the Arbitrator retained jurisdiction to assure compliance with the award and to provide the Union the opportunity to request attorney fees.

III.     Positions of the Parties

A.     Agency's Exceptions

      The Agency claims that the award is contrary to law because 5 C.F.R. § 551.422(b) prohibits federal employees from being compensated for commute time. [n4]  In support, the Agency cites United States Dep't of the Air Force v. FLRA, 952 F.2d 446 (D.C. Cir. 1991) (Dep't of the Air Force). The Agency cites several other cases for the general proposition that employees may not be compensated for their commute time between their homes and places of work. See, e.g., Barth v. United States, 568 F.2d 1329 (Ct. Cl. 1978); Panama Canal Comm'n, B-240,657 (Comp. Gen. February 6, 1991); William Carragher, B-231,475 (Comp. Gen. August 12, 1988); United States Dep't of the Treasury, IRS Northeast Region, New York, N.Y., 55 FLRA 356 (2000).

      Next, the Agency contends that, because Article 29, Section 3E of the parties' agreement stops short of expressly providing payment for the travel at issue[,] the language of that provision does not fall under the "the `express' provision exception found in 254(b)(1) of the [ v57 p446 ] Portal-to-Portal Act." Exceptions at 20. In support, the Agency relies on the definition of "express" set forth in Black's Law Dictionary (6th Ed. 1990) p. 580:

Clear; definite; explicit; plain; direct; unmistakable; not dubious or ambiguous. Declared in terms; set forth in words. Directly and distinctly stated.

Id. at 18. The Agency also cites as support Ralph v. Tidewater Construction Co., 361 F.2d 806 (4th Cir. 1966), cert. denied, 385 U.S. 931 (1966) (Ralph); and Spencer v. Commonwealth of Kentucky, 928 F.2d 405, 1991 WL 32361 (6th Cir. 1991) (Spencer) (unpublished). The Agency concludes that the award is contrary to law because the Arbitrator "misinterpreted, as a matter of law," the Portal-to-Portal Act. Exceptions at 20. The Agency further claims that the Act's exception applies only to legal and enforceable contract provisions and that Article 29, Section 3E is void and unenforceable as contrary to government-wide regulation.

      Finally, the Agency contends that the award fails to draw its essence from the parties' agreement. In particular, the Agency claims that the "plain wording of Article 29, Section 3E, that employees `should not be required to leave their residences any earlier or arrive home any later when traveling to a point of destination within their official duty station', can hardly be read as a clear statement of an agreement to make payment for commute time." Id. The Agency also argues that the Arbitrator's interpretation of the provision is not based on evidence of any bargaining history between the parties. As a result, the Agency asserts that the award should be set aside.

B.     Union's Opposition

      The Union contends that the Arbitrator was authorized to interpret and apply the FLSA as part of the parties' negotiated grievance procedure, and that the Arbitrator correctly determined that § 254(b) allows employees to contract for compensation from their employer for commute time. Specifically, the Union notes that, while § 254(a) "eliminates employer liability for, inter alia, compensating employees for time spent in ordinary commuting," § 254(b) provides an exception to that restriction. Opposition at 14 n.6.

      The Union further claims that 5 C.F.R. § 551.422(b) cannot be construed as a bar to compensation for commute time because that provision "is silent with respect to contractual provisions[,]" "and therefore does not prohibit" them. Id. at 3. In this connection, the Union states that "the OPM regulations expressly recognize the applicability of the Portal-to-Portal provisions[,]" and cites 5 C.F.R. § 551.101 as support. Id. at 20. The Union also cites United States Dep't of the Navy, Navy Public Works Center, Pearl Harbor, Haw., 55 FLRA 487, 490 (1999) (Dep't of the Navy), for the proposition that the Authority has recognized and applied the exception created by § 254(b). In this regard, the Union claims that OPM "is obliged to exercise its authority in a manner that is consistent with the Fair Labor Standards Act." Opposition at 21, citing American Fed'n of Gov't Employees v. OPM, 821 F.2d 761, 770-71 (D.C. Cir. 1987). The Union concludes that, because the FLSA allows the parties to negotiate compensation for commute time, if OPM regulations are interpreted to prohibit such contractual provisions, the OPM regulations would be invalid.

      In addition, the Union claims that "the Agency did not rely on or cite to" Dep't of the Air Force before the Arbitrator and, therefore, the Arbitrator did not have the opportunity to address its applicability. Id. at 27-28. In any event, the Union claims that "proper analysis of [Dep't of the Air Force] demonstrates that it does not impair the validity of the Arbitrator's decision." Id. at 28.

      Finally, the Union contends that the Arbitrator properly interpreted Article 29, Section 3E to be an express provision of the parties' agreement which allows compensation under authority of § 254(b).

IV.     Analysis and Conclusions

A.     The Award Draws its Essence From the Parties' Agreement.

      In reviewing an arbitrator's interpretation of a collective bargaining agreement, the Authority applies the deferential standard of review that Federal courts use in reviewing arbitration awards in the private sector. See 5 U.S.C. § 7122(a)(2); American Fed'n of Gov't Employees, Council 220, 54 FLRA 156, 159 (1998). Under this standard, the Authority will find that an arbitration award is deficient as failing to draw its essence from the collective bargaining agreement when the appealing party establishes that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990) (OSHA). The Authority and the courts defer to arbitrators in this context "because it is [ v57 p447 ] the arbitrator's construction of the agreement for which the parties have bargained." Id. at 576.

      The Agency contends that the Arbitrator erroneously interpreted Article 29, Section 3E to require the Agency to compensate bargaining unit employees for commute time. Although the Agency is correct that Article 29, Section 3E does not use the word "payment," we find that the Arbitrator's determination that Article 29, Section 3E would allow compensation for commute time draws its essence from the agreement. Award at 15. The Arbitrator based his determination, in part, on the Agency's statement that the "`intent of the Article is to allow employees to maintain their same commuting time, if the duty station changes only temporarily' [,]" which the Arbitrator found "serves as an acknowledgment that the provision can be interpreted to apply to commute travel." Id. at 8. The Arbitrator's further finding that compensation was warranted for increased travel time is a plausible interpretation of the agreement. As such, the Agency has failed to establish that the arbitrator's interpretation of the parties' agreement is irrational, implausible, or unfounded, or that it otherwise disregards the agreement. See OSHA, 34 FLRA at 574-77 (agency's argument that the arbitrator imposed a condition not provided by the agreement did not establish that the award failed to draw its essence from the agreement). We deny the exception.

B.     The Award Is Not Contrary to Law.

      The Authority reviews the questions of law raised by the award and the Agency's exceptions de novo. See Nat'l Treasury Employees Union, Chapter 24, 50 FLRA 330, 332 (1995) (citing Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying a standard of de novo review, the Authority assesses whether the Arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. See Nat'l Fed'n of Fed. Employees, Local 1437, 53 FLRA 1703, 1710 (1998). In conducting that assessment, the Authority defers to the Arbitrator's underlying factual findings. See id.

      The Agency argues that the Arbitrator could not have enforced Article 29, Section 3E as an "express provision" under § 254(b) of the Portal-to-Portal Act.

      The FLSA was amended by the Portal-to-Portal Act, 29 U.S.C. § 254. Section 254(a) provides that no employer is liable for minimum wages, or overtime compensation, for time employees spend walking, riding, or traveling to and from the actual place of performance of work which the employees are entitled to perform. However, § 254(b) sets forth an exception that provides that an employer shall not be relieved from compensating employees if such activity is compensable by either "an express provision of a written or nonwritten contract . . . between [the employee's] collective-bargaining representative and his employer[,]" or "a custom or practice in effect, at the time of such activity." 29 U.S.C. § 254(b); Dep't of the Navy, 55 FLRA at 490 (Authority found that, pursuant to § 254(b), agency's established practice of transporting employees to the job site after they started their shift, and subsequently transporting employees from the job site before quitting time, entitled employees to be paid for transportation time).

      Nothing in § 254(b) requires that a contract, custom or practice be set forth with any particular degree of precision or specificity. Further, we find nothing in judicial opinions involving the Portal-to-Portal Act that set forth a standard by which contracts, customs or practices are to be evaluated for purposes of determining an employer's liability for claims of compensation. Indeed, neither Ralph nor Spencer, the decisions the Agency relies on for support, states, much less requires, that a contract, custom or practice must satisfy a prescribed standard or definition.

      In Ralph, 361 F.2d 806, the parties negotiated agreements that provided employees with a daily allowance for time spent getting to and from their place of employment. The employees claimed that such travel time was compensable overtime under the FLSA. The United States Court of Appeals for the Fourth Circuit disagreed. As relevant here, the court found that the employees' travel time fell within the prohibition on compensation under § 254(a). The court then held, after addressing whether the negotiated agreements rendered the travel time compensable "as allowed by § [25]4(b)," that "the only reasonable construction was that the [travel time] did not comprise compensable work hours." Id. at 809. Nowhere in this decision is there any description of particular wording or specificity that an agreement must contain in order to constitute an express provision of a written contract.

      The same applies to Spencer, 1991 WL 32361, in which the court held that an employer's policy of compensating some travel expenses did not amount to a custom or contract for payment of all travel time pursuant to § 254(b). There is no discussion of any precision or specificity that is required in assessing whether a policy authorizes compensation consistent with § 254(b).

      Like the decisions in Ralph and Spencer, in which compensation was not authorized under § 254(b), decisions holding employers liable for compensation under [ v57 p448 ] § 254(b) also did not set forth any standard that a contract, custom or practice had to satisfy. For example, in Wirtz v. Sherman Enter., 229 F. Supp. 746 (1964), the court analyzed whether the employer's practice of paying employees $1.00 for each forty miles of travel time from job site to job site should be included in calculating the amount of overtime due the employees. Based upon the evidence of that practice, the court concluded that there was an express provision of the employment contract in effect between the parties and that, under § 254(b), the employer was liable for compensation. Similarly, in Smith v. Superior Casing Crews, 299 F. Supp. 725 (1969), the court credited testimony, which established that the employer agreed to pay employees for time that they traveled in boats to and from offshore oil rigs. Neither of these decisions required any particular precision or specificity in the practice or contract.

      In this case, the Arbitrator found that the parties' intent in negotiating Article 29, Section 3E, was to authorize compensation for employee commute time. On this basis, the Arbitrator held that the provision constitutes an "express provision" under the Portal-to-Portal Act. Award at 20. Neither the Agency's arguments nor the decisions on which it relies persuades us that the Arbitrator's award is incorrect, as a matter of law. Consequently, we deny the exception.

C.     Section 2429.5 of the Authority's Regulations Bars the Agency's Remaining Claim.

      The Agency argues that the award is contrary to 5 C.F.R. § 551.422, and as such, was not enforceable under 29 U.S.C. § 254(b). However, the Agency did not raise this claim before the Arbitrator.

      Under section 2429.5 of the Authority's Regulations, the Authority will not consider any issue that could have been, but was not, presented to the arbitrator. [n5]  See, e.g., United States Dep't of Defense, Defense Commissary Agency, Fort Lee, Va., 56 FLRA 855, 857-58 (2000) (Authority held § 2429.5 barred agency's claim that award violated provisions of 5 C.F.R. § 335.103(c)). Here, the Agency argued before the Arbitrator that bargaining unit employees could not be compensated for travel time pursuant to 29 U.S.C. § 254 solely because Article 29, Section 3E of the parties' agreement was not an "express provision" as set forth by § 254(b). The Agency now argues, based upon the District of Columbia Circuit's decision in Dep't of the Air Force, that even if the requirements of § 254(b) were satisfied, enforcement of the disputed provision in this case would be contrary to 5 C.F.R. § 551.422(b), which precludes compensation for commute time.

      These arguments present different -- indeed, inconsistent -- claims. The Agency's position that § 254(b) does not apply to this case was predicated on the view that § 254(b) is the proper standard to apply in assessing Article 29, Section 3E. The Agency's new argument is that, even if the requirements of § 254(b) were met, that provision itself does not apply to that Article. As the Agency has raised an argument that could have been, but was not, raised before the Arbitrator, we are barred from considering it in this proceeding. See id.; Panama Area Maritime/Metal Trades Council, AFL-CIO (M/MTC), 55 FLRA 1199 (1999) (Authority held § 2429.5 barred union's claim that award was contrary to 29 C.F.R. § 29.5).

V.     Order

      The Agency's exceptions are denied.


APPENDIX

29 U.S.C § 254 Portal-to-Portal Pay

(a)     Activities not compensable

Except as provided in subsection (b) of this section, no employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938, as amended [29 U.S.C.A. § 201 et. seq.], the Walsh-Healey Act [41 U.S.C.A. § 35 et. seq.], or the Bacon-Davis Act [40 U.S.C.A. § 276 et. seq.], on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any of the following activities of such employee engaged in on or after May 14, 1947 --

      (1)     walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and

      (2)     activities which are preliminary to or postliminary to said principal activity or activities,

which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities. For purposes of this subsection, the use of an employer's vehicle [ v57 p449 ] for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee's principle activities if the use of such vehicle for travel is within the normal commuting area for the employer's business or establishment and the use of the employer's vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.

(b)     Compensability by contract or custom

Notwithstanding the provisions of subsection (a) of this section which relieve an employer from liability and punishment with respect to any activity, the employer shall not be so relieved if such activity is compensable by either --

(1)     an express provision of a written or nonwritten contract in effect, at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer; or

(2)     a custom or practice in effect, at the time of such activity, at the establishment or other place where such employee is employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity, between such employee, his agent, or collective bargaining representative and his employer.

5 C.F.R. § 551.422 Time spent traveling

(b)     An employee who travels from home before the regular workday begins and returns home at the end of the workday is engaged in normal home to work travel; such travel is not hours of work. When an employee travels directly from home to a temporary duty location outside the limits of his or her official duty station, the time the employee would have spent in normal home to work travel shall be deducted from hours of work as specified in paragraphs (a)(2) and (a)(3) of this section.


Concurring Opinion of Chairman Cabaniss:

      I write separately to more fully discuss an argument raised by the Agency, although I agree with the finding that the argument based upon 5 C.F.R. § 551.422(b) was not raised to the Arbitrator, thereby precluding it from consideration by the Authority in these proceedings. In that regard, the Agency untimely asserted as a defense in the present matter the legal analysis set out in United States Dep't of the Air Force v. FLRA, 952 F.2d 446 (D.C. Cir. 1991) (Dep't of the Air Force).

      The court's decision in Dep't of the Air Force addresses sufficiently analogous facts and arguments to warrant it being dispositive, had it been timely argued. In that decision, the court found that § 4(b) of the Portal-to-Portal Act (29 U.S.C. § 254(b)), with its provision for recognizing collective bargaining provisions that otherwise would be in conflict with 29 U.S.C. § 254(a), does not override Office of Personnel Management (OPM) regulations which, in interpreting 29 U.S.C. § 254(a), prohibit certain conduct from being considered hours of work for compensation purposes. Id. at 450-51. The court noted that, while such collective bargaining provisions were recognizable by the statute, the OPM regulations acted to "rule out such bargaining" for federal employees. Id. at 451. The OPM regulation at issue in the court decision was 5 C.F.R. § 551.412(b), dealing with the pay status of preliminary and postliminary activities: in the present case the OPM regulation at issue is 5 C.F.R. § 551.422(b), dealing with the pay status of time spent traveling. However, and as already noted, the Agency's failure to make this argument to the Arbitrator precludes its consideration in these exceptions, no matter how meritorious the argument might be.



Footnote # 1 for 57 FLRA No. 81 - Authority's Decision

   Chairman Cabaniss' concurring opinion is set forth at the end of the decision. Member Armendariz did not participate in this decision.


Footnote # 2 for 57 FLRA No. 81 - Authority's Decision

   The disputed part of Article 29, Section 3E provides as follows:

When an employee travels from his/her residence to a point of destination within his/her official duty station, he/she should not be required to leave home any earlier or arrive home any later than he/she does when he/she travels to and from his/her usual assigned place of business.

Award at 2.


Footnote # 3 for 57 FLRA No. 81 - Authority's Decision

   The relevant portions of the Portal-to-Portal Act, 29 U.S.C. § 254, are set forth at the appendix to this decision.


Footnote # 4 for 57 FLRA No. 81 - Authority's Decision

   5 C.F.R. § 551.422(b) is set forth at the appendix to this decision.


Footnote # 5 for 57 FLRA No. 81 - Authority's Decision

   Section 2429.5 of the Authority's Regulations provides in pertinent part: