United States, Department of Energy, Rocky Flat Field Office, Golden, Colorado (Agency) and American Federation of Government Employees, Local 1103 (Union)

[ v59 p159 ]

59 FLRA No. 31

UNITED STATES
DEPARTMENT OF ENERGY
ROCKY FLAT FIELD OFFICE
GOLDEN, COLORADO
(Agency)

and

AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES
LOCAL 1103
(Union)

0-AR-3651

_____

DECISION

September 23, 2003

_____

Before the Authority: Dale Cabaniss, Chairman, and
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 Robert E. Allen 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 found that the Agency did not violate the parties' agreement by rescinding its approval of the grievants' training requests or by failing to reimburse one of the grievants for training costs. However, the Arbitrator found that the Agency failed to comply with an Administrative Judge's (AJ) decision finding that the grievants were not indebted to the Agency for training costs already paid by the Agency. As a remedy, the Arbitrator ordered the Agency to cease its collection efforts against the grievants. For the reasons that follow, we conclude that the award is not deficient, and we deny the Agency's exceptions.

II.      Background and Arbitrator's Award

      The Agency is scheduled to shut down its Rocky Flats facility by 2006. In order "to keep the employees with skills needed to complete the closure process while shrinking the work force as other skills become obsolete[,]" the parties negotiated a training plan. Award at 3. Under Article 24 of that plan, a training advisory committee was created. [n2]  Based on the committee's recommendation, the Agency adopted a process for approving training requests, in which employees were required to request training by submitting an individual development plan. If an employee's training request was approved, then the employee was required to pay for the training and submit a claim for reimbursement.

      The grievants submitted individual development plans for pilot training, which showed that the training "would have allowed them to meet minimum qualifications for . . . pilot positions [within the Agency] by the time their [current] positions will be eliminated." Id. at 37. The Agency approved the grievants' requests.

      Subsequently, the Agency conducted an internal review of the program and concluded that the training program "did not have a proper legal foundation[.]" Id. at 13. As a result, the Agency notified the grievants that they would be required to reimburse the Agency for the training costs for which they had received reimbursement, explaining that "Congress had not appropriated funds for the type of training the [g]rievants had received." Id. The Agency also denied one grievant's request to be reimbursed for training that he had already completed. The grievants appealed the Agency's debt collection efforts to the Agency's Board of Contract Appeals, where the AJ found that the Agency "did not establish by a preponderance of the evidence that the [g]rievants . . . owed a debt to the treasury." Id. In this connection, the AJ concluded that "there can be no debt assessed against the employees [because] the training [was] properly allowed by the Agency under [its] regulations." Id. (quoting the AJ's Decision, Joint Exhibit 9 at 5).

      Subsequently, the grievants filed separate grievances challenging the Agency's collection efforts and decision to discontinue their pilot training. The unresolved grievances were consolidated and submitted to arbitration on these stipulated issues:

Did the Agency properly follow the negotiated training procedures and treat the [g]rievants . . . fairly and equitably when the Agency discontinued [ v59 p160 ] allowing the [g]rievants to participate in their previously approved and future pilot's training programs and fail[ed] to reimburse [one of the grievants] . . . and if not, what should the remedy be?
Has the Agency complied with the [AJ's] decision . . . and if not, what should the remedy be?

Id. at 1-2.

      With respect to the first issue, the Arbitrator concluded that the Agency did not violate the parties' agreement by rescinding its approval of the grievants' pilot training or by failing to reimburse one of the grievants for training costs. See id. at 50. However, as to the second issue, the Arbitrator found that the Agency had not complied with the AJ's decision because the Agency had not ceased its collection efforts against the grievants. See id.

      In reaching the latter conclusion, the Arbitrator rejected the Agency's claim that its approval of the grievants' training requests was unlawful. In this connection, noting that the Agency is permitted to use appropriated funds for training, the Arbitrator explained that the Agency has discretion to establish means of achieving its retention goals during the pending closure. See id. at 33. According to the Arbitrator, the Agency's discretion was limited by the "necessary expense doctrine," which provides that expenditures must: (1) bear a logical relationship to the appropriation to be charged; (2) not be prohibited by law; and (3) not be otherwise provided for in some other appropriation. Id. at 33-34. The Arbitrator determined that the Agency's approval of the grievants' pilot training satisfied these requirements.

      The Arbitrator also rejected the Agency's claim that the training program itself was unlawful. In this regard, the Arbitrator explained that the Agency's training approval standard was "very liberal" and "quite broad" at the time of the grievants' training requests, as compared to the more rigorous standard it later adopted. Id. at 33, 35. According to the Arbitrator, the former policy had been to approve training so long as it would "prepare[] employees for positions found elsewhere in the [Agency]." Id. at 36. Because the grievants had demonstrated that their requested training would minimally qualify them for pilot positions with the Agency, the Arbitrator concluded that the Agency's approval of the pilot's training was appropriate under its policy. Moreover, the Arbitrator found that the Agency did not abuse its discretion by implementing the training policy, given its need to retain employees during the closure of its Rocky Flat facility.

      Finally, the Arbitrator rejected the Agency's allegations that its collection efforts were proper because of misbehavior and collusion on the part of the grievants and certain management officials. See id. at 40-41. The Arbitrator found no evidence supporting these allegations. According to the Arbitrator, the grievants' training requests were properly submitted by the grievants and approved by the Agency.

      Based on the foregoing, the Arbitrator concluded that the Agency violated Article 10 of the parties' agreement and the AJ's decision by continuing its collection efforts against the grievants. [n3]  Therefore, the Arbitrator ordered the Agency to "cease the collection efforts against the [g]rievants[.]" Id. at 50.

III.      Positions of the Parties

A.     Agency's Exceptions

      The Agency excepts to the award as contrary to law on several grounds. First, the Agency asserts that the award is contrary to federal appropriations law because it violates 31 U.S.C. § 1301. [n4]  In this connection, the Agency asserts that the expenditures for pilot training do not satisfy the "necessary expense doctrine" because the expenditures advanced no Agency purpose. Exceptions at 6. Next, the Agency asserts that the award is contrary to 5 U.S.C. § 4103 and § 4118 because the training did not help the employees "meet the qualification requirements of another position in the [A]gency." [n5]  Id. at 11. According to the Agency, there is no reasonable belief that the grievants would ever qualify for a pilot position with the Agency. The Agency further asserts that the Energy and Water Development Appropriations Act for fiscal year 2001 [ v59 p161 ] (Pub. L. 106-377) does not authorize the pilot training. [n6]  In this connection, the Agency adds that "training is not a separate statutory purpose set out in the DOE Organization Act." Id. at 6 (citing 42 U.S.C. § 7101, et seq.). [n7] 

      The Agency further asserts that the award's order to cease collection efforts against the grievants is contrary to law. According to the Agency, the order conflicts with Office of Personnel Management v. Richmond, 496 U.S. 414 (1990) (OPM), in which the U.S. Supreme Court held that estoppel cannot be used to compel unauthorized expenditures of funds. Also, the Agency asserts that the award is contrary to the Agency's regulations because it confers more authority on the AJ than authorized. According to the Agency, its regulations permit AJs to determine the existence of a debt solely for the purpose of salary offsets and do not prohibit the Agency from taking other measures to collect a debt.

      The Agency also excepts to the award as failing to draw its essence from the parties' agreement. Specifically, the Agency asserts that the award "evidences a manifest disregard of" Article 10 of the parties' agreement. Id. at 16. In this connection, the Agency asserts that requiring the grievants to repay the Agency for the cost of the pilot lessons does not constitute "unfair" or "inequitable" treatment under Article 10 because the grievants were not similarly situated with other employees whose approved training "was proper under law." Id. The Agency further asserts that the award conflicts with Article 4 of the parties' agreement, which provides that "all the obligations between the parties are subject to and governed by applicable law." Id. at 15. Finally, the Agency asserts that the award conflicts with Article 21 of the parties' agreement. According to the Agency, Article 21 is the same as § 7106(a) of the Statute, which gives the Agency the right to determine its mission. The Agency argues that its right to determine its mission includes the "power to correct errors it has made that would otherwise result in the unlawful expenditure of appropriated funds." Id.

B.     Union's Opposition

      According to the Union, "[n]o procedural matters were raised by either party as threshold issues" before the Arbitrator. Opposition at 2. Therefore, according to the Union, the Agency's argument "that the Arbitrator is somehow precluded from ruling on the issue of an employee's alleged debt owed to the [g]overnment . . . is frivolous." Id. at 3. Also, according to the Union, the Agency raises arguments in its exceptions regarding payment to the grievants that were not raised below. In this connection, the Union asserts that the Agency made only two arguments before the Arbitrator: (1) the Arbitrator could not legally order the Agency to reimburse the grievants for training; and (2) the money previously reimbursed to the grievants did not satisfy the requirement of the necessary expense doctrine. See id. at 2-3. In any event, the Union disputes the Agency's claims that the award is deficient.

IV.      Analysis and Conclusions

A.     Preliminary Matters

      The Authority will not consider arguments that could have been, but were not, raised below. See 5 C.F.R. § 2429.5. Based on our review of the record, we find that all of the arguments raised in the Agency's exceptions were raised before the Arbitrator and, therefore, are properly before the Authority. In this regard, the Agency does not argue, as the Union claims, that the Arbitrator lacked jurisdiction. Rather, the Agency argues that the award is deficient because it is contrary to federal appropriations law, the Supreme Court's precedent, and management's right to determine its mission, and because it fails to draw its essence from the parties' agreement. Moreover, contrary to the Union's claim, the record demonstrates that all of the Agency's arguments on exceptions were raised before the Arbitrator. Specifically, the award shows that the Agency argued before the Arbitrator that "reimbursement for pilot lessons are prohibited by federal appropriations law[,]" Award at 22, which encompasses the Agency's claim on exceptions that the award is contrary to 31 U.S.C. § 1301. Similarly, the award expressly shows that the Agency raised claims under 5 U.S.C. § 4103 and § 4118, 5 C.F.R. Pt. 410, and the Supreme Court's precedent. See id. at 28-29. Therefore, we will consider the Agency's claims that the award is contrary to law and that it fails to draw its essence from the parties' agreement.

B.     The Award Is Not Contrary To Law

      The Agency claims that the award is contrary to law because it conflicts with the Agency's regulations, [ v59 p162 ] federal appropriations laws, U.S. Supreme Court precedent, and management's right to determine its mission. The Authority reviews questions of law raised by exceptions to an arbitrator's award de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying a standard of de novo review, the Authority determines whether the arbitrator's legal conclusions are consistent with the applicable standard of law and, in doing so, defers to the arbitrator's underlying factual findings. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998).

1.      The Agency's Regulations

      The Authority's Regulations provide that an exception must be a self-contained document that includes all pertinent documents. See 5 C.F.R. § 2425.2. The Agency claims that the award conflicts with its regulations. However, the Agency neither provided a copy, nor set forth the specific language, of its regulations. Consequently, the Agency has failed to establish an evidentiary record upon which the Authority may conclude that the award conflicts with the Agency's regulations. [n8]  See AFGE, Local 1151, 54 FLRA 20, 25 (1998) (denying union's exception where, among other things, the union failed to provide regulation it claimed the agency violated). Accordingly, we deny this exception.

2.      Federal Appropriations Laws

      Under 31 U.S.C. § 1301(a), "[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law." Under the "necessary expense doctrine," expenditures that are "not specifically provided for in the appropriation act" are permissible if they are "reasonably necessary in carrying out an authorized function or will contribute materially to the effective accomplishment of the function, and if it is not otherwise prohibited by law." Matter of: Demolition of the Existing LaGuardia Air Traffic Control Tower, 2001 WL 83529 (Comp. Gen. 2001) (quoting 66 Comp. Gen. 356 (1987)). "The necessary expense doctrine does not require that a given expenditure be `necessary' in the strict sense that the expenditure would be the only way to accomplish a given goal, rather that the expenditure will contribute to accomplishing the purposes of the appropriation to be charged." Id. (citing 50 Comp. Gen. 534 (1971)).

      Here, the relevant appropriation -- § 212(g) of the Energy and Water Development Appropriations Act for Fiscal Year 2001 -- authorized the Agency to expend appropriated funds in order to "accelerate the closure of defense environmental management sites . . . ." Pub. L. 106-377, H.R. 4635. The Arbitrator found, and the Agency does not dispute, that the Agency's training program was designed "to keep employees with skills needed to complete the closure" of the Agency's Rocky Flats facility, a purpose which we find to be valid under the relevant appropriation. Award at 3.

      Consistent with this purpose and the training advisory committee's recommendation, the Agency adopted a training program in which "[t]raining would be approved if it prepared employees for positions found elsewhere in the [Agency,]" as demonstrated by the employees' individual development plans. Id. at 36. The Agency's standard for approving training requests virtually mirrored applicable Office of Personnel Management (OPM) regulations giving agency heads broad authority to determine necessary training expenses, see 5 C.F.R. § 410.401, and expressly permitting agencies to train employees "to meet the qualification requirements of another position in the agency . . .. . . ." 5 C.F.R. § 410.307(c)(1). Indeed, 5 U.S.C. § 4101, et seq. requires federal agencies to administer training programs in accordance with OPM regulations. We note that the Agency approved the grievants' individual development plans, which included pilot training, and approved the committee's recommendation for the very expenses that the Agency now seeks to recoup. Because the Agency's training program was consistent with federal appropriations laws and applicable OPM regulations, the award is not contrary to law, unless the Arbitrator erred in finding the Agency's approval of the grievants' training requests proper under its training program.

      We conclude that the Arbitrator did not err in this regard. In this connection, there is no dispute that: (1) the Agency hires pilots; (2) the grievants requested pilot training and submitted individual development plans, in accordance with the Agency's policy; and (3) the Agency approved the grievants' requests. In addition, the Arbitrator found, and the record demonstrates, that the Agency's standard for approving training at the time [ v59 p163 ] the grievants' requests were approved was "very simple and very liberal." Award at 36. Moreover, according to the Arbitrator, the grievants' individual development plans showed that the training "would have allowed them to meet minimum qualifications for . . . pilot positions" within the Agency. Id. at 37. The Agency's assertion that "there was no reasonable basis for believing that the pilot training at issue here would allow the [g]rievants to qualify for" a pilot position within the Agency does not demonstrate that this factual finding was in error. Exceptions at 7. Consequently, we find that the Arbitrator did not err in concluding that the Agency's approval of the grievants' training was proper.

      Based on the foregoing, we conclude that the award ordering the Agency to cease its collection efforts against the grievants is not contrary to any of the federal appropriations laws asserted by the Agency. Therefore, we deny the Agency's exception.

3.      U.S. Supreme Court Precedent

      The Agency's reliance on the Supreme Court's decision in OPM in support of its claim that the award violates principles of equitable estoppel is misplaced. In that decision, the Supreme Court addressed whether "a claim for payment of money from the Public Treasury [was] contrary to a statutory appropriation." OPM, 496 U.S. at 424. The Court explained that "payments of money from the Federal Treasury are limited to those authorized by statute[.]" Id. at 416. In this connection, the Court held that the federal government cannot be compelled to make unauthorized expenditures of funds. See id. at 426. Consistent with the foregoing discussion, the Agency has not demonstrated that the expenditures at issue here violated any federal appropriation laws. Therefore, OPM does not apply, and we deny the exception.

4.      Management's Right To Determine Its Mission

      To demonstrate that an award violates a management right under § 7106 of the Statute, an agency must first show that the award affects the management right being asserted. See, e.g., Fed'l Energy Regulatory Comm'n, 58 FLRA 596, 599 (2003). The award in this case does not dictate what the Agency's mission will or will not include. That is, the award does not prevent the Agency from determining that the recoupment of unauthorized training costs is part of its mission. Rather, the award requires the Agency to recoup training costs in a fair and equitable manner, consistent with Article 10 of the parties' agreement. As such, the award relates to how the Agency's mission will be carried out, not what the Agency's mission will be. See, e.g., United States Dep't of HHS, Centers for Medicare and Medicaid Serv., Balt., Md., 57 FLRA 704, 707 (2002) (agency's right to determine its mission not affected where award concerns only the manner in which the mission will be carried out).

      The Agency also has not demonstrated that the award prevents it from reconsidering "mistaken authorizations of funds[.]" Exceptions at 15. To the contrary, the Arbitrator expressly found that the Agency could change the standard for approving training. In this regard, the Arbitrator denied the grievance over the Agency's decision to deny a request for reimbursement for training costs incurred after the Agency had changed its policy. The award only prevents the Agency from recouping training costs that were properly approved and paid before the new standards were adopted.

      Based on the foregoing, we conclude that the award does not affect management's right to determine its mission, and we deny the exception.

B.      The Award Does Not Fail To Draw 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); AFGE, 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). The Authority and the courts defer to arbitrators in this context "because it is the arbitrator's construction of the agreement for which the parties have bargained." Id. at 576.

      As relevant here, Article 4 of the parties' agreement provides that "in the administration of all matters covered by this [a]greement, the [Agency], the Union, and employees are governed by existing or future laws and regulations." Award at 27 n.4 (quoting the parties' agreement). Article 21 of the parties' agreement mirrors § 7106(a)(1) of the Statute, which concerns the [ v59 p164 ] Agency's right to determine its mission. As set forth above, the Agency has not demonstrated that the award is contrary to any law, including its right to determine its mission under § 7106(a)(1) of the Statute. Therefore, we reject the Agency's claim that the award violates Articles 4 and 21 of the parties' agreement.

      Moreover, the Arbitrator interpreted Article 10 of the parties' agreement -- which requires that employees be treated fairly and equitably -- as precluding the Agency from demanding reimbursement for properly approved training expenditures that did not violate federal appropriations laws. The Agency has not demonstrated that this interpretation is irrational, unfounded, or implausible, or that it evidences a manifest disregard for the parties' agreement.

      Based on the foregoing, we deny the exception.

VII.     Decision

      The Agency's exceptions are denied.


Concurring Opinion of Chairman Cabaniss:

      Although I agree with the resolution in this case I reach that resolution in a slightly different manner. I have serious doubts as to whether the employee training and reimbursement program in question comported with relevant appropriations law limitations, and I would place no emphasis on the fact that the challenged reimbursements to these employees comported with what clearly was a fiscally questionable program. However, the questionable fiscal legality of the earlier reimbursements to these employees is not dispositive of whether the Agency had the legal right to recover those funds. As already found by the Agency's own debt collection appeal process, the circumstances here did not justify requiring these employees to reimburse the Agency for these funds. Therefore, I would uphold the Arbitrator's denial of the Agency's recoupment attempts because the matter had already been addressed and resolved by the earlier employee appeal of the debt recovery attempt to the Agency's board of contract appeals.



Footnote # 1 for 59 FLRA No. 31 - Authority's Decision

   Chairman Cabaniss' concurring opinion is set forth at the end of this decision.


Footnote # 2 for 59 FLRA No. 31 - Authority's Decision

   As relevant here, Article 24, Section 1 provides that "[t]raining approvals for employees will be for the purpose of enhancing knowledge, skills and abilities to complete their work assignments. In addition, training approvals to develop employees for future assignments will be based on the approved Individual Development Plan (IDP). Other training opportunities may be approved." Award at 4.


Footnote # 3 for 59 FLRA No. 31 - Authority's Decision

   As relevant here, Article 10 of the parties' agreement "requires that employees be `treated fairly and equitably, and without discrimination in all aspects of personnel administration[.]'" Id. at 43 (quoting Article 10 of the parties' agreement).


Footnote # 4 for 59 FLRA No. 31 - Authority's Decision

   As relevant here, 31 U.S.C. § 1301(a) provides that "[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law."


Footnote # 5 for 59 FLRA No. 31 - Authority's Decision

   As relevant here, 5 U.S.C. § 4103 requires "the head of each agency" to "establish" a training program that "conform[s] to the principles, standards, and related requirements contained in the regulations prescribed under section 4118 of this title[.]" Section 4118 provides, in relevant part, that "[t]he Office of Personnel Management . . . shall prescribe regulations containing the principles, standards, and related requirements for the [training] programs[.]"


Footnote # 6 for 59 FLRA No. 31 - Authority's Decision

   As relevant here, § 212(g) of the Energy and Water Development Appropriations Act for Fiscal Year 2001 appropriates money to "the Department of Energy to accelerate the closure of defense environmental management sites, including the purchase, construction and acquisition of plant and capital equipment and other necessary expenses . . . ." Pub. L. 106-377, H.R. 4635.


Footnote # 7 for 59 FLRA No. 31 - Authority's Decision

   As relevant here, 42 U.S.C. § 7112, entitled "Congressional declaration of purpose" describes the purposes for which Congress established the Department of Energy.


Footnote # 8 for 59 FLRA No. 31 - Authority's Decision

   The only record evidence related to the Agency's regulations is in the AJ's decision, where he explained that his jurisdiction was "governed by DOE Order 2200.2B [