United States Department of Health and Human Services, Centers For Medicare and Medicaid Services (Agency) and American Federation of Government Employees, Local 1923 (Union)

[ v57 p924 ]

57 FLRA No. 194

UNITED STATES DEPARTMENT OF HEALTH
AND HUMAN SERVICES, CENTERS FOR
MEDICARE AND MEDICAID SERVICES
(Agency)

and

AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 1923
(Union)

0-AR-3497

_____

ORDER DISMISSING EXCEPTIONS

July 9, 2002

_____

Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members

I.     Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Ira F. Jaffe 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.

      We conclude that the Agency's exceptions are interlocutory and that immediate review is not warranted. Accordingly, we dismiss the exceptions.

II.     Background and Arbitrator's Award

      Article 7, Section 2 of the parties' collective bargaining agreement, effective March 8, 1998, provides, in pertinent part, as follows:

Section 2. Duration of Agreement
This Agreement will remain in full force and effect for a period of three (3) years after its effective date. It will be automatically renewed for one (1) year periods unless either Party given [sic] the other Party notice of its intention to renegotiate this Agreement no less than sixty (60) nor more than one hundred twenty (120) days prior to its termination date. . . . If renegotiation of an Agreement is in progress but not completed upon the terminal date of this Agreement, this Agreement will be automatically extended until a new Agreement is negotiated.

On March 7, 2001, by letter, the Agency notified the Union of its intent to terminate its adherence to specified provisions of the agreement upon the agreement's expiration, which it had identified as concerning permissive subjects of bargaining. In an "Attachment B," the Agency listed 45 provisions in 16 articles. The Agency placed these provisions in three categories: (1) those which interfered with the exercise of one or more of the rights reserved by § 7106(b)(1) of the Statute; (2) those which addressed matters which do not concern conditions of employment, as defined by § 7103(a)(14) of the Statute; and (3) those which constituted waivers of the Agency's statutory rights.

      In an "Attachment A," the Agency listed agreement provisions that the Agency had identified as inconsistent with law or government-wide regulation or excluded from negotiations by § 7103(a)(14) of the Statute. As to these provisions, the Agency advised that effective immediately, it would no longer adhere to these provisions and that it was ready to negotiate with the Union on the impact of this action.

      The Union filed a grievance challenging the Agency's actions. The Union claimed that

the parties' MLA [Master Labor Agreement] specifically provides that the existing MLA will be automatically extended until a MLA is negotiated. By agreeing to this provision in the 1998 MLA, the Agency expressly waived its right to terminate unilaterally permissive MLA provisions until the MLA terminal date.

Id. at 3-4 (quoting grievance). The grievance was not resolved and was submitted to arbitration.

      At the outset of the arbitration hearing, the Arbitrator met with the parties' representatives "off the record to establish a sensible manner for proceeding in this case. . . . After extensive discussion, the case was divided into a number of sequential phases." Id. at 4. The Arbitrator described the initial phase, as follows:

Phase 1 consisted of the question of whether the MLA barred the Agency from unilaterally discontinuing the "Attachment B" provisions of the Agreement during the pendency of negotiations for a successor Agreement.

Id. He noted that the following questions were "[d]eferred for later resolution:"

(1)     the Agency's right to unilaterally discontinue adherence to the "Attachment A" provisions of the [ v57 p925 ] Agreement during the pendency of negotiations for a successor Agreement;
(2)     whether the Agency's statement of discontinuance with respect to Attachment A, Attachment B, and/or certain "past practice" issues were, in fact implemented;
(3)     whether any or all of Attachment "A" provisions and/or identified past practice issues involved commitments to take action which was violative of law and/or government wide rule or regulation;
(4)     whether any or all of the Attachment "B" provisions, in fact, involved permissive subjects of bargaining; and (5) questions related to the appropriate remedy with respect to any improper abrogation by the Agency of contractual provisions and/or past practices.

Id. at 4-5. The Arbitrator explained that as to these issues,

some . . . were set for determination based upon briefing and the record developed at the [initial] hearing. Others were deferred for arbitral determination pending the introduction of additional relevant record evidence.

Id.

      In what he termed his "Phase One Interim Award," the Arbitrator ruled that the Agency had violated Article 7, Section 2 of the agreement by attempting to discontinue adherence to certain contract provisions, which it viewed to be permissive subjects of bargaining, during the period when bargaining for a successor agreement was in progress. With respect to a remedy, the Arbitrator determined that "[i]mmediate partial relief . . . is appropriate in terms of directing the Agency to adhere to Article 7, Section 2, and to adhere to those contract provisions and practices during the period that bargaining for a successor Agreement remains in progress and has not been completed." Id. at 13. The Arbitrator specifically ruled that any issues pertaining to monetary or other specific compensatory relief for this violation "are deferred to a subsequent phase of this arbitration." Id.                         

III.     Threshold Issue

      The Agency's exceptions raise a threshold issue of whether the exceptions are interlocutory and, if so, whether immediate review is warranted.

A.     Positions of the Parties on Threshold Issue

      The Agency contends that its exceptions are not interlocutory because

[t]he Arbitrator's ruling in this matter was a final decision on solely a question of law, and his Award completely resolved the legal issue submitted to him.

Exceptions at 6. The Agency maintains that the issue before the Arbitrator was whether the agreement prevented the Agency from terminating, during the pendency of negotiations for a successor agreement, adherence to contractual provisions constituting permissive subjects of bargaining. The Agency further maintains that the Arbitrator issued a final order on that issue by directing the Agency to adhere to those provisions until renegotiation is completed. The Agency asserts that this award is final and binding because it is "on a single question of law," and because "no subsequent award would alter the directives or effect of this Award." Id. at 7.

      Alternatively, the Agency contends that if the Authority determines that its exceptions are interlocutory, extraordinary circumstances warrant interlocutory review. The Agency notes that in United States Dep't of the Treasury, Internal Revenue Service, Los Angeles District, 34 FLRA 1161 (1990) (IRS), the Authority recognized that federal courts depart from their policy of discouraging fragmentary appeals "where cases involve a controlling question of law and where an immediate appeal may materially advance the ultimate termination of the litigation." Exceptions at 8. On the basis of this recognition, the Agency argues that interlocutory review is warranted in this case because the Arbitrator answered a controlling question of law and because the answer "has the practical effect of allowing the union in this matter to continue and stall bargaining for a lengthy period of time for the sole purpose of depriving the Agency of its legal right to terminate permissive subjects of bargaining contained in the parties' MLA." Id. at 9.

      The Union contends that the Agency's exceptions are interlocutory and that immediate review is not warranted. The Union maintains that with the Agency's express concurrence, this dispute has been divided into at least three phases and the award concerns only the [ v57 p926 ] first phase. The Union argues that even the first phase remains open to the extent of determining the following: "(i) whether the Agency in fact repudiated several subjects; (ii) whether the subjects repudiated by the Agency were genuinely permissive; and (iii) what the appropriate remedy for the Agency's repudiation of permissive contract provisions might be." Opposition at 5 (emphasis in original). The Union further asserts that the resolution of a legal claim does not make an award final for review purposes. Citing United States Dep't of the Interior, Bureau of Indian Affairs, Wapato Irrigation Project, Wapato, Wash., 55 FLRA 1230 (2000) (BIA), the Union argues that extraordinary circumstances are not presented that warrant immediate review.

B.     Analysis and Conclusions

      Section 2429.11 of the Authority's Rules and Regulations provides: "The Authority . . . ordinarily will not consider interlocutory appeals." In arbitration cases, this means that ordinarily, the Authority will not resolve exceptions filed to an arbitration award unless the award constitutes a complete resolution of all of the issues submitted to arbitration. See, e.g., AFGE Nat'l Council of EEOC Locals No. 216, 47 FLRA 525, 530 (1993) (Nat'l Council); AFGE Local 12, 38 FLRA 1240, 1246 (1990); Navy Public Works Ctr., San Diego, Cal., 27 FLRA 407, 408 (1987) (Navy Public Works Ctr.). In other words, the Authority ordinarily will not resolve exceptions to an arbitration award until the arbitrator has issued a final decision on the entire proceeding. See Navy Public Works Ctr., 27 FLRA at 408.

      Consequently, an arbitration award that postpones the determination of an issue submitted does not constitute a final award subject to review. See AFGE Local 12, 38 FLRA at 1246 (citing Millmen Local 50 v. Wells Exterior Trim, 828 F.2d 1373 (9th Cir. 1987)). Exceptions are considered interlocutory when the arbitrator has declined to make a final disposition as to a remedy. See, e.g., Navy Public Works Ctr., 27 FLRA at 408. Similarly, an agreement to conduct a separate hearing on a threshold issue does not operate to convert the arbitrator's threshold ruling into a final award subject to exceptions being filed under the Statute. See IRS, 34 FLRA at 1163; Dep't of the Army, Oakland Army Base, 16 FLRA 829, 830 (1984).

      We conclude that the Agency's exceptions are interlocutory. The Arbitrator's "Phase One Interim Award" clearly is not a complete resolution of all the issues submitted to arbitration and a final decision on the complete proceeding, including the issue of remedy. Moreover, there is no support for concluding that the Arbitrator's resolution of a legal question made the award final and binding.

      We also conclude that interlocutory review is not warranted. As the Authority recently ruled, "interlocutory review should be reserved for those extraordinary situat