United States, Department of Veterans Affairs, Cleveland Regional Office, Cleveland, Ohio (Agency) and American Federation of Government Employees, AFL-CIO, Local 2823 (Union)
[ v59 p248 ]
59 FLRA No. 38
DEPARTMENT OF VETERANS AFFAIRS,
CLEVELAND REGIONAL OFFICE
OF GOVERNMENT EMPLOYEES, AFL-CIO,
September 29, 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 John G. Watson 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 grievance alleged that the Agency improperly failed to promote employees, under a career-ladder, from GS-9 to GS-11 level. The Arbitrator sustained the grievance, finding that the Agency unilaterally established a new grade level of GS-10 for a position in violation of the parties' collective bargaining agreement. The Arbitrator ordered the Agency to promote the grievants to the GS-11 level with backpay.
For the reasons set forth below, we find that the remedy providing for the grievants' retroactive promotion with backpay is contrary to law. Accordingly, we set aside that portion of the award.
II. Background and Arbitrator's Award
In March 1999, the Agency sent a job posting to area law schools for a Rating Specialist position. The posting indicated a starting level of GS-9, and further indicated that after 1 year of successful performance and training the employee would be promoted to the next higher level, a GS-11. Three applicants responded to the job posting and were hired with a start date of July 6, 1999. A fourth applicant learned of the position on the USA Jobs website, and was selected on February 17, 2000. The Arbitrator found that, when hired by the Agency, "the four [g]rievants were under the impression that the grade progression for the Rating Specialist job classification was grade GS-9 to GS-11 to GS-12." Award at 8.
After working for a year, the three grievants who were hired first were recommended for promotion and anticipated that their promotion would be to GS-11. However, they were promoted to the GS-10 level, instead. The fourth employee was informed that she would also be promoted to GS-10 level at the appropriate time.
A grievance was filed alleging that the employees should have been promoted to GS-11. The grievance alleged, in part, that the Agency had attempted to create a GS-10 level without proper Union involvement. In response, the Agency stated that, prior to the date on which the grievants had actually been hired, it had created an intervening GS-10 grade level for the position. The grievance was not resolved, and was submitted to arbitration.
The Arbitrator framed the issue as follows:
Were the actions of [the Agency] unlawful, unilateral, and arbitrary in establishing a GS-10 position in the line of advancement for the Rating Specialist job classification? If so, what shall the remedy be? Id. at 2.
The Arbitrator sustained the grievance. As an initial matter, the Arbitrator rejected the Agency's argument that the grievance was not arbitrable because it concerned the classification of a position under § 7121(c)(5) of the Statute. Id. at 19. The Arbitrator found that this argument was not timely raised under the parties' master collective bargaining agreement. See id.
As to the merits, the Arbitrator found that there was nothing in the job posting specifying a grade 10 position; rather, "the progression was 9/11/12." Id. at 16. In addition, he found that all four grievants credibly testified that they were interviewed by the [ v59 p249 ] Human Resources Director and were not informed by her of a 9/10/11/12 progression.
According to the Arbitrator, "[o]f paramount importance in the instant case" is the determination of when the GS-10 grade level for the Rating Specialist position became "operative" at the regional office. Id. at 19. The Arbitrator found that the Agency "attempted to establish a GS-10 Rating Specialist position" while the job posting was open. Id. at 20. Finding that the creation of the GS-10 grade level constituted a change in conditions of employment, the Arbitrator held that the Agency violated Article 46, Section 4 of the master agreement by failing to notify the Union at the local level and bargain. [n2] See id. at 21-22. The Arbitrator also found that the Agency violated the master agreement by not providing the grievants with a position description or a career ladder plan.
The Arbitrator determined that the Agency's actions were "inappropriate" in not promoting the grievants from the GS-9 to the GS-11 Rating Specialist Position, and he ordered the Agency to retroactively promote the grievants and make them whole for any lost wages or benefits. Id. at 24. In reaching this determination, the Arbitrator considered and rejected the Agency's argument that the grievants did not satisfy the time-in-grade requirements in 5 C.F.R. § 300.604(a) to be promoted immediately to the GS-11 level without completing 52 weeks at the GS-10 level. [n3] The Arbitrator found that the Agency did not present any evidence of a regulation that "super[s]edes" the master agreement. [n4] Id. at 23-24.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the award is inconsistent with the Back Pay Act because the Arbitrator failed to make the findings necessary for an award of backpay. In this respect, the Agency argues that the Arbitrator made no findings that the Agency's purported misconduct constituted an unjustified or unwarranted personnel action and that such misconduct resulted in the failure of the grievants to be promoted to the GS-11 level. Specifically, the Agency states that the Arbitrator did not find that the grievants would have been promoted to the GS-11 level "but for" the inaccurate job posting, the Agency's failure to provide a copy of the position description or a career ladder plan, or the Agency's failure to provide notice and bargain with the Union at the local level. Exceptions at 14.
The Agency also contends that the grievance was excluded from arbitration by § 7121(c)(5) of the Statute because the grievance concerns the classification of a position that did not result in the reduction of grade or pay of an employee. Acknowledging that the grievants were eligible for a career ladder promotion to the next intervening grade, the Agency argues that the dispute before the Arbitrator concerned the level of the next intervening grade, a matter that is clearly within the definition of classification. The Agency further contends that the Arbitrator's finding that the establishment of the GS-10 position was subject to bargaining "conflicts directly" with the exclusion of classification from conditions of employment in § 7103(a)(14) and is contrary to management's rights. See id. at 9. [ v59 p250 ]
The Agency further argues that the award is contrary to 5 C.F.R. § 511.701(a)(i), concerning the effective date of a position action taken. According to the Agency, the grade 10 position was established by a certificate dated April 21, 1999. The Agency asserts that the Arbitrator erred by finding that local bargaining was "an additional prerequisite" for the establishment of the position. Id. at 8. The Agency also argues that the award is contrary to the time-in-grade requirements in 5 C.F.R. § 300.604 because it mandates noncompetitive advancement of employees who have not met the time-in-grade requirements.
Finally, the Agency asserts that the award is contrary to law because of the Arbitrator's failure to consider the issue of arbitrability. The Agency argues that it did not waive its right to raise a challenge under § 7121(c)(5) of the Statute by failing to comply with the collective bargaining agreement as to when arbitrability issues must be raised.
B. Union's Opposition
The Union contends that the Agency did not raise the issue of backpay before the Arbitrator and, therefore, its backpay exception should not be considered. The Union argues that, in any event, the Arbitrator made all the findings necessary for an award of backpay. In this regard, the Union claims that the Arbitrator's determination that the Agency acted arbitrarily and inappropriately by not promoting the grievants to GS-11 "was an unjustified and unwarranted personnel action because a GS-10 position was not established for the [g]rievants' position; and the Agency continuously advised the [g]rievants that their grade progression" would be 9/11/12. Opposition at 22-23.
Further, the Union contends that the award does not concern a classification matter under § 7121(c)(5) of the Statute because it concerns the grievants' entitlement to a career-ladder promotion. However, even assuming the award is "remotely related to classification," the Union asserts that the Agency's actions resulted in a reduction in grade and pay. Id. at 11. The Union asserts that by promoting the grievants to the GS-10 level and not the GS-11 level, the grievants lost the difference in pay between GS-10 and GS-11.
The Union also contends that the award is consistent with the regulatory provisions of 5 C.F.R. § 511.701 and 5 C.F.R. § 300.604. The Union also states that the Arbitrator determined that the Agency did not timely assert any claim of non-arbitrability under the parties' agreement, and this interpretation of the agreement is a procedural arbitrability determination that is not subject to review. The Union adds that Arbitrator correctly interpreted the agreement.
IV. Analysis and Conclusions
The Agency's exceptions, in part, question whether the award is contrary to the Back Pay Act.
The Authority reviews questions of law 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. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that determination, the Authority defers to the arbitrator's underlying factual findings. See id.
A. Section 2429.5 of the Authority's Regulations does not bar
the Agency's exception that the award is contrary to the
Back Pay Act
Under § 2429.5 of the Authority's Regulations, the Authority will not consider issues that could have been, but were not, presented to the arbitrator. The Union contends that the Agency is asserting for the first time in its exceptions that the grievants are not entitled to backpay. See Opposition at 22. However, the record demonstrates that the Agency argued before the Arbitrator that the grievants did not possess the minimum qualifications for promotion concerning time-in-grade set forth in 5 C.F.R. § 300.604(b)(2). This argument raised the issue of backpay and the applicability of the Back Pay Act before the Arbitrator. See, e.g., United States Dep't of Health and Human Services, Public Health Service, Navajo Area Indian Health Service, 50 FLRA 383, 386 (1995) (award is deficient as contrary to the Back Pay Act because the grievant did not satisfy the minimum qualification requirements prescribed by OPM and was not entitled to temporary promotion). Minimum qualification requirements apply to both permanent and temporary promotions. See id. Therefore, we consider the Agency's assertion. See United States Dep't of the Navy, Commander, Military Sealift Command, Washington, D.C., 57 FLRA 930, 931 (2002) (Authority held that agency's argument was not barred by § 2429.5).
B. The award is contrary to the Back Pay Act
An award of a retroactive promotion with backpay by an arbitrator is authorized under the Back Pay Act, 5 U.S.C. § 5596, only when: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action resulted in a loss of pay, allowances, or differentials by the [ v59 p251 ] employee. See, e.g., United States Dep't of the Air Force, Warner Robins Air Force Base, Ga., 56 FLRA 541, 543 (2000).
In determining whether an award of backpay is deficient, the Authority examines whether there has been an unjustified or unwarranted personnel action and whether there is a causal connection between the unwarranted personnel action and the loss of pay, allowances, or differentials. See id. With respect to the requirement of a causal connection, the Authority examines whether the arbitrator has found that but for the unwarranted action, the loss of pay, allowances, or differentials would not have occurred. See United States Dep't of Health and Human Services, 54 FLRA 1210, 1218-19 (1998) (HHS) (an examination of whether a pay loss would have occurred but for the unwarranted action amplifies the causal connection requirement of the Act).
A violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Act. See United States Dep't of Defense, Dep't of Defense Dependents Schools, 54 FLRA 773, 785 (1998). Here, the Arbitrator held that the Agency was required under Article 46, Section 4 of the master agreement to notify the Union at the local level of, and bargain on, the creation of the GS-10 grade level, which it failed to do. See Award at 21-22. We defer to the Arbitrator's interpretation of the master agreement and the factual finding that the Agency failed to notify and bargain with the Union at the local level. See HHS, 54 FLRA at 1221. This violation of the master agreement constituted an unjustified or unwarranted personnel action.
However, the Arbitrator did not find and the record does not establish that the Agency's failure to follow the procedures of the master agreement resulted in the loss of pay. The Arbitrator made no finding that but for the Agency's failure to follow the procedures of Article 46, Section 4, the grievants would have been promoted to the GS-11 level and not the GS-10. In addition, the required causal connection is not implicit from the findings of the Arbitrator or the record before the Authority.
The award and record do not reflect that the grievants' failure to be promoted to the GS-11 level is attributable to the Agency's failure to follow the procedures of the agreement. To the extent that the Arbitrator found that the Agency failed to follow the procedures of the agreement, his opinion addresses only why he concluded that the Agency did not fully meet its obligations under the procedure. The award does not address what would have happened if the Agency had met its obligations. In particular, nothing in the award establishes that if the Agency had met its contractual obligation to notify the Union and bargain, the grievants would have been promoted to GS-11. Similarly, nothing in the Arbitrator's findings or the record demonstrates, explicitly or implicitly, that the grievants would have been promoted to GS-11 if the Agency had not violated the master agreement by failing to provide the grievants with a position description or a career ladder plan.
Consequently, nothing in the Arbitrator's findings or the record supports a causal connection between an unwarranted personnel action of the Agency and the grievants' failure to be promoted to GS-11. See, e.g., Soc. Sec. Admin., Office of Hearings and Appeals, Orlando, Fla., 54 FLRA 609, 614 (1998) (arbitrator's award did not reflect any connection between the failure to follow promotion procedures and the failure of the grievant to be selected for promotion).
Because of the nature of the contractual provisions involved in this case, this case is different from other Authority decisions holding that the requirements of the Back Pay Act are satisfied when an arbitrator finds that an agency violated an agreement by failing to initiate the nondiscretionary process whereby an employee is promoted once the employee satisfies all the requirements for a career ladder promotion. See NFFE, Local 2030, 56 FLRA 667, 673 (2000); Social Security Administration, 51 FLRA 1700, 1706 (1996). In contrast to those cases, the Arbitrator here enforced contractual provisions that simply required the Agency to notify the Union at the local level and bargain on a change in career ladder position, and to provide the grievants with a position description and a career ladder plan. These provisions do not mandate a promotion. Moreover, as noted, the award and record do not reflect that the grievants would have received the career ladder promotion sought if the Agency had complied with these provisions of the agreement.
Therefore, the award of backpay is deficient as contrary to the Back Pay Act. See, e.g., United States Dep't of the Army, Army Missile Command, Multiple Launch Rocket Sys. Project Office, Redstone, Ala., 56 FLRA 388, 391 (2000). As the remedy awarded is contrary to the Back Pay Act, it must be set aside. See id.
By setting aside only the remedy, we leave undisturbed the Arbitrator's finding that the Agency violated the parties' collective bargaining agreement, and therefore committed an unjustified or unwarranted personnel action. The question then becomes whether in this circumstance the Authority should direct further action, such as remanding the matter to the parties for further [ v59 p252 ] proceedings to give the arbitrator another opportunity to issue a legal remedy for the violation that he found.
As an initial matter, we note that the Back Pay Act does not mandate a remedy for every unjustified or unwarranted personnel action. See, e.g., AFGE, Local 2718 v. INS, 768 F.2d 348, 351 (Fed. Cir. 1985); AFGE, Local 12, 32 FLRA 771, 774-75 (1988). Likewise, arbitrators are accorded broad discretion in fashioning appropriate remedies, and an arbitrator is not required to provide a remedy for every violation of a collective bargaining agreement. See, e.g., AFGE Local 2274, 57 FLRA 586, 589 (2001). Clearly, when an arbitrator awards a remedy, the Statute requires that the remedy must be consistent with law. Accordingly, the Authority will find deficient any remedy awarded by an arbitrator that an appealing party establishes is contrary to law.
When the Authority finds that an award is deficient, § 7122(a) of the Statute plainly empowers the Authority to take such action and make such recommendations as it considers "necessary" in a particular case, as long as such action is consistent with applicable laws, rules, and regulations. Accordingly, the question presented here is what action by the Authority concerning the award is necessary under § 7122(a) of the Statute.
Under recent Authority precedent, the Authority has generally remanded matters to the parties for resubmission to the arbitrator, absent settlement, when the Authority has found the arbitrator's remedy deficient, but has left unaffected the violation for which the remedy was granted. However, a review of the Authority's precedent demonstrates that this has not been the Authority's consistent practice over the years. In fact, the Authority has taken a variety of different actions in such circumstances.
Initially, where the Authority determined that an arbitrator's remedy, but not the finding of a contract violation, was deficient, the Authority simply struck the remedy. See, e.g., Veterans Admin., Winston-Salem, N.C., 27 FLRA 44 (1987) (VA); Veterans Admin. Med. Ctr., Newington, Conn., 19 FLRA 535 (1985) (VAMC). In some of these cases, the Authority reminded the parties that they were empowered to agree to an appropriate remedy for the unaffected violation, and that if they were unable to agree, the matter of an appropriate remedy could be resubmitted to the original arbitrator or could be referred to arbitration. See VA, 27 FLRA at 46; VAMC, 19 FLRA at 537 n.2. More recently, the Authority began generally to remand such cases to the parties for resubmission to the original arbitrator, absent settlement. See, e.g., Soc. Sec. Admin., Office of Hearings and Appeals, 54 FLRA 1365 (1998). However, in some instances, the Authority has modified an arbitrator's award without remanding it, see, e.g., SSA, Office of Hearings and Appeals, Paducah, Ky., 58 FLRA 124, 126-27 (2002); Local R-1-185, NAGE, 25 FLRA 509, 512 (1987), or remanded the case to the parties with direction to use an arbitrator of their choice, see, e.g., AFGE Local 1997, 53 FLRA 342 (1997).
In our view, the necessary as well as appropriate action in this particular case is to set aside the remedy without a remand for further proceedings. As the Authority did in VA and VAMC and similar cases, it is generally appropriate to leave any further action concerning such an award in the hands of the parties. See United Paperworkers v. Misco, Inc., 484 U.S. 29, 40 n.10 (1987) (When a court finds an award deficient, "as a rule the court . . . should simply vacate the award, thus leaving open the possibility of further proceedings if they are permitted under the terms of the agreement."). The parties, not the Authority, are typically in the best position to determine whether and how to deal with a deficient remedy ordered by an arbitrator.
In our view, the "necessary" action that § 7122(a) of the Statute directs the Authority to take upon finding an award deficient is an individualized judgment to be determined on the facts and circumstances of each case. That action can take many different forms: setting aside the deficient remedy without further proceedings, modifying the remedy, remanding the case to the parties for submission to the same or different arbitrator, or possibly other variations. The guiding principle as to what particular action is necessary is whether an action, under the facts and circumstances presented, would promote the purposes and policies of the Statute. In the instant case, we find no facts or circumstances warranting a remand.
Finally, it is clear that by this point in time, the Authority has developed a substantial body of arbitration case precedent that enables parties and arbitrators to know whether or not particular remedies would be lawful in given situations. We strongly encourage parties to arbitration proceedings to address not only whether an alleged violation occurred, but also to focus on the legal requirements applicable to any remedies sought if the arbitrator sustains the grievance. Similarly, arbitrators should be aware of and take into account legal requirements when fashioning appropriate remedies. Further, if exceptions to an award are filed with the Authority, the parties are encouraged to address what action the Authority should take under § 7122(a) if the Authority were to find the arbitrator's remedy deficient, but not the violation for which relief was granted.
The remedy providing for the grievants' retroactive promotion with backpay is set aside. [n5] [ v59 p253 ]
Concurring Opinion of Chairman Cabaniss:
I write separately to address an issue that, while not raised by the parties, is of sufficient note that I believe it worthwhile to identify and discuss now so that it may be considered in future cases.
Our precedent reflects that the Authority has traditionally relied on violations of the Back Pay Act (5 U.S.C. § 5596) to set aside an arbitrator's award of not only backpay, but also (where applicable) an underlying award of a retroactive promotion, even where there remains a finding that the agency committed an unjustified or unwarranted personnel action (UUPA) that resulted in the improper denial of a promotion for the employee(s) in question. See, e.g., SSA, Office of Hearings and Appeals, Paducah, Ky., 58 FLRA 124, 125 (2002). This set aside of both the backpay remedy and the attendant retroactive promotion remedy has some sense of logic to it since the lack of a causal connection between the UUPA and the backpay would also seem to indicate the lack of a causal connection between the UUPA and the retroactive promotion.
However, there also is an obvious and, to me a more compelling logic for the conclusion that the set aside of arbitration award remedies for violating the Back Pay Act can result only in the set aside of just that part of the remedy provided by the Back Pay Act, i.e., the award of backpay. 5 U.S.C. § 5596(b)(1) speaks only to "the withdrawal or reduction of all or part of the pay, allowances, or differentials" of an employee, it does not speak to the granting of promotions or the setting aside of promotions. Thus, it would appear to me that an agency's challenge to an arbitration award providing both a retroactive promotion and backpay must rely on more than just an alleged violation of the Back Pay Act in order to challenge the underlying retroactive promotion and the UUPA upon which it is based.
For example, in the present case the Agency made a contrary to law exception based upon its belief that the retroactive promotion itself was improper because the promotion action violated certain relevant regulations. I also note that it would be possible to allege that the award of a retroactive promotion also fails to draw its essence from the parties' agreement, or that the retroactive promotion conflicts with an agency's right under 5 U.S.C. § 7106(a)(2)(C) to make selections for promotion. To the extent these possible exceptions challenging the underlying retroactive promotion remedy are not successful, however, I would find no basis for setting aside the retroactive promotion and would permit employees to receive any benefit that would accrue from obtaining that higher grade and earlier promotion date, even though any award of backpay has been set aside by application of the Back Pay Act. Again, however, as the parties have not raised or addressed this issue its consideration will have to wait.
File 1: Authority's Decision in 59 FLRA No.
38 and Opinion of Chairman Cabaniss
File 2: Opinion of Member Pope
Footnote # 1 for 59 FLRA No. 38 - Authority's Decision
Footnote # 2 for 59 FLRA No. 38 - Authority's Decision
The Department shall provide reasonable advance notice to the appropriate Union official(s) prior to changing conditions of employment of bargaining unit employees. The Department agrees to forward, along with the notice, a copy of any and all information/material relied upon to propose the change(s) in conditions of employment. All notifications shall be in writing to the appropriate Union official, with sufficient information to the Union for the purpose of exercising its full rights to bargain.
Footnote # 3 for 59 FLRA No. 38 - Authority's Decision
Throughout the award the Arbitrator inadvertently cites to 5 C.F.R. § 300.604(a), which contains the time-in-grade requirements for advancement to positions at GS-12 and above. See Award at 7, 12 and 23. As the Agency's argument clearly concerns advancement to the GS-11 level in a position classified at 1-grade intervals, the relevant provision is 5 C.F.R. § 300.604(b)(2).
Footnote # 4 for 59 FLRA No. 38 - Authority's Decision
The following time-in-grade restrictions must be met unless advancement is permitted by § 300.603(b) of this part:
(a) Advancement to positions at GS-12 and above. Candidates for advancement to a position at GS-12 and above must have completed a minimum of 52 weeks in positions no more than one grade lower (or equivalent) than the position to be filled.
(b) Advancement to positions at GS-6 through GS-11. Candidates for advancement to a position at GS-6 through GS-11 must have completed a minimum of 52 weeks in positions:
(1) No more than two grades lower (or equivalent) when the position to be filled is in a line of work properly classified at 2- grade intervals[.]
(2) No more than one grade lower (or equivalent) when the position to be filled is in a line of work properly classified at 1- grade intervals[.]
Footnote # 5 for 59 FLRA No. 38 - Authority's Decision
Accordingly, we need not resolve the Agency's other exceptions challenging this remedy. We note that, in addition to asserting that this remedy is deficient, the Agency contends that the Arbitrator's finding of a violation of Article 46, Section 4 of the master agreement is deficient. Further, we note that the Agency has not excepted to