United States, Department of Defense, Defense Contract Management Agency (Agency) and American Federation of Government Employees, Local 2128 (Union)

[ v59 p396 ]

59 FLRA No. 57

UNITED STATES
DEPARTMENT OF DEFENSE
DEFENSE CONTRACT
MANAGEMENT AGENCY
(Agency)

and

AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES,
LOCAL 2128
(Union)

0-AR-3564

DECISION

October 10, 2003

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

I.     Statement of the Case

      This case is before the Authority on exceptions to an award of Arbitrator Don J. Harr 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. [n2] 

      For the following reasons, we find the award deficient: (1) as contrary to law insofar as it requires the Agency to replace its performance standards and critical elements; and (2) to the extent that the Arbitrator exceeded his authority by requiring revisions in Defense Logistics Agency (DLA), Defense Contract Management Agency (DCMA), and Defense Contract Management District West performance awards policies that would apply outside the unit represented by the Union. We deny the Agency's remaining exceptions. Consequently, we strike the portion of the award that concerns critical elements and performance standards and modify the first paragraph of the award so as to limit its effect to the unit involved in this case.

II.     Background and Arbitrator's Award

A.     Background

      In March 2000, the Defense Contract Management Command was separated from Defense Logistics Agency and established as an independent organization, the Defense Contract Management Agency (DCMA), within DoD. For labor relations purposes, DCMA deals with a DCMA Council of AFGE Locals (DCMA Council). The relevant subordinate organization within DMCA for this case is Defense Contract Management Agency District West (DCMDW). The parties' Master Agreement (Agreement) refers to such districts as a "primary level field activity" (PLFA). According to the Union, it was "designated" by AFGE to represent all DCMA unit employees at five facilities in Texas. Union Opposition at 2. The Union refers to these facilities as the "Texas Sector" (Texas Sector). See Local 2128 Grievance dated June 30, 2000 (Grievance). Exceptions, Enclosure 2.

      Further, according to the record, in late 1992, DCMDW implemented the DCMDW Improved General Schedule Appraisal Process (DIGAP). The parties do not dispute that DIGAP governed performance appraisal in DCMDW, including the facilities represented by Local 2128, at all times relevant to this case. As set forth in the record, DIGAP contained the critical elements and performance standards for, among others, unit employees in the Texas Sector. See Attachment 7 to the Union's Opposition.

      The Union filed a grievance alleging that the Incentive Awards Program (awards program) as to Texas Sector unit employees was not being administered in a fair and equitable manner under Article 11, Section 1 of the parties' Agreement. [n3] The grievance also alleged that the awards program was not being administered consistent with law and regulation as required by Article 2, Section 1 of the Agreement. [n4] As a remedy, the Union requested that the awards program "be brought back in line with the requirements" of law, regulation, and the Agreement and administered "on a fair and equitable basis." Award at 3-4.

      The Agency denied the grievance, finding that the awards program was being administered in accordance with the agreement and that the matter was not grievable. As to grievability, the Agency argued that the subject [ v59 p397 ] matter of the grievance was excluded from the grievance procedure by Article 11, Section 7 and Article 36, Section 4.K. of the agreement. The Agency also claimed that the grievance was not arbitrable because the Union failed to provide a "Grievance Package" at the fourth step of the procedure as required by Article 36, Section 8 of the agreement. The Union subsequently invoked arbitration.

B.     Arbitrator's Award  [n5] 

      Based on a joint written submission by the parties, the Arbitrator framed the issues presented by the grievance as follows:

Did the Agency breach the parties' Collective Bargaining Agreement, Article 11, Sections 1 and 2 when it failed to administer the Incentive Awards Program on a fair and equitable basis and failed to include the Union on established Incentive Awards Committees?
If the Agency did breach either or both of these contractual provisions of the parties' Collective Bargaining Agreement, what should the remedy be?

Award at 2.

      The Arbitrator noted that the Union listed the following "`Specific Problems'" in its post-hearing brief:

1.     New Employees Unfair Exclusion
2.     Unequal Treatment, some employees unfairly excluded from awards due to promotion.
3.     Totally "Subjective" Awards Criteria
4.     Incentive Awards are prone to being kept "Secret"
5.     Management takes a disproportionate share of the annual Awards budget
6.     Management plays favorites and takes the most and the best Awards into it's [sic] own ranks.
7.     Time off Awards are being unfairly curtailed.
8.     AFGE Local 2128's Bargaining Unit Employees are [subject to] unequal treatment at the five CMOs [Contract Management Offices?].
9.     Management Prerogative.

Award at 8. The Arbitrator found that the Agency "breached" Article 11, Section 1 of the agreement "when it failed to administer the Incentive Awards Program on a fair and equitable basis[.]" Id. at 9.

      Further, construing Article 11, Section 2 of the Agreement, which provides that the DLA Council local "may" be afforded the opportunity to have a voting representative on any established incentive awards committee, the Arbitrator quoted the definition of the word "may" from Black's Law Dictionary (Sixth Edition). Based on that definition, the Arbitrator found that the "`context'" in which the word is used in the Agreement "indicates that the parties intended that DLA Council Locals have voting participation on Incentive Awards Committees." Award at 8-9. Relying on this finding, the Arbitrator concluded that the Agency "breached" Article 11, Section 2 of the Agreement when it "failed to include the Union on established Incentive Awards Committees." Id. at 8, 9.

      The Arbitrator sustained the grievance and stated his remedy as follows:

The remedy is to be:
The DCMDW Incentive Awards Program is to be brought back in line with the requirements of Law, Regulation, the Master Agreement and administered on a fair and equitable basis. DLA/DCMA and DCMDW policy and regulations that don't meet the requirements of Law and contribute to these problems will be updated.

      The PLFA is ordered to stay the recommendation, awarding and distribution of all Incentive Awards pending the completion of negotiations with AFGE Local 2128 over:

1. Policy and procedures designed to attain a proportionate B[argaining] U[nit] share of the overall Awards Budget.
2. Policy and procedures replacing the current Table of Awards (SSP).
3. An equal per person distribution of the Awards Budget until `valid objective criteria' [are] devised to replace the total[ly] subjective [ v59 p398 ] "Position Performance Plan" (DIGAP) and the DCMDW Performance Award Instructions.
4. Policy and procedures for the establishment of one or more Incentive Awards Committees where the Union will be involved as a voting member per the [agreement].

Award at 9-10.

III.     Positions of the Parties

A.      Agency's Exceptions

1.     Contrary to Law

      The Agency contends that, by ordering it to negotiate on replacing DIGAP, the Arbitrator's award affects management's right to direct employees and assign work under § 7106(a)(2)(A) and (B) of the Statute. Specifically, the Agency asserts that the award would require it to negotiate over the content of the critical elements and performance standards of the replacement system.

      The Agency asserts that the Union not only did not challenge the validity of DIGAP, it did not cite any legal or regulatory basis for finding the critical elements and performance standards prescribed by that system to be invalid. Further, the Agency contends that the Arbitrator's decision did not contain any analysis of the validity of DIGAP. According to the Agency, without any justification or explanation, or any analysis of the relevant materials, the Arbitrator ordered DIGAP replaced. The Agency asserts that "[i]t is essential that any arbitral award providing such a conclusion be based on a finding or decision or even a discussion of the law, regulation or policy that the program supposedly violates, and which particular policy and/or regulation doesn't meet the requirement of what particular law." Exceptions at 8. [n6] 

      The Agency notes that it negotiated DIGAP with the Union and, consistent with Office of Personnel Management (OPM) regulations, 5 C.F.R. § 430.209, DIGAP was submitted to OPM for approval. According to the Agency, the fact that DIGAP was approved by OPM demonstrates that it is consistent with the requirements of law and regulation. By ordering it to bargain over the replacement of DIGAP, the Agency claims that the award is inconsistent with 5 C.F.R. § 430.209.

      Further, the Agency notes that the Union filed an unfair labor practice charge over the "applicability" of DIGAP. The Agency states that the General Counsel dismissed the charge on the ground that the subject matter of DIGAP was covered by the parties' collective bargaining agreement. In this regard, the Agency notes that the provisions of the supplemental collective bargaining agreement relating to DIGAP have been in effect since 1993.

2.     Exceeded Authority

      The Agency asserts that the grievance in this case "did not challenge the validity of the performance appraisal system itself." Exceptions at 7. Rather, the grievance "merely alleged that the [A]gency's awards program was not being administered on a fair and equitable basis." Id. The Agency contends that the award exceeds the Arbitrator's authority because it "goes beyond the administration of the system and orders the system itself to be replaced." Id.

      The Agency also argues that the Arbitrator exceeded his authority by ordering that DLA, DCMA, and DCMDW policies and regulations that do not meet the requirements of law must be brought into compliance with those requirements. According to the Agency, this remedy exceeds the scope of the grievance since it involves organizations and organizational elements that were not included in the grievance and with which Local 2128 has no collective bargaining relationship. The Agency maintains that the grievance only concerned "the five Texas organizations named in the grievance" and the award can affect only the policies and practices of those organizations. Id. at 9. Specifically, the Agency asserts, the grievance contained no allegation or information concerning DLA, DCMA, or DCMDW. Because the award orders those organizations and organizational elements to revise their policies and practices, the Agency argues, it exceeds the authority of the Arbitrator.

3.     Nonfact

      The Agency claims that the Arbitrator's award as a whole is deficient on nonfact grounds because he misunderstood the scope of the grievance and an appropriate remedy. The Agency maintains that the basis of the award is unclear, since the Arbitrator failed to provide any analysis of the facts in the case, the evidence submitted, or the parties' arguments. The Agency contends that the Arbitrator's failure in those respects renders the award erroneous. [ v59 p399 ]

4.     Public Policy

      The Agency claims that the award undermines the public policy in favor of collective bargaining. The Agency claims that DIGAP resulted from bargaining between DCMDW and the DCMDW Council of AFGE Locals. According to the Agency, the Arbitrator's award requiring renegotiation of DIGAP undermines the collective bargaining process that resulted in that performance appraisal system.

5.     Incomplete and Ambiguous

      The Agency contends that the Arbitrator's award contains no discussion, analysis, or information relating to the fairness or equity of performance awards. Moreover, the Agency maintains that the Arbitrator's opinion consists of one sentence finding that the DCMDW performance award program is unfair and inequitable and in this regard is incomplete. Further, the Agency asserts that the remedies ordered by the Arbitrator are unrelated to any allegations raised in the grievance or to any findings in the decision itself and, on this ground, contends that the award is contradictory.

      The Agency also claims that the award is ambiguous. In this regard, the Agency argues that, without any analysis as to the ways in which its performance award or performance appraisal systems are inconsistent with law or regulation, it is at a loss as to how to comply with the award's requirement that it conform those systems to law and regulation. According to the Agency, in order to comply with the Arbitrator's award, it will have to "read his mind, since there is no basis for his conclusions anywhere in the grievance, the hearing testimony, or in the award decision itself." Exceptions at 6. In particular, the Agency maintains that the phrases "valid objective criteria" and "totally subjective DIGAP" appear for the first time in the remedy section of the award and that it does not understand what the phrases mean. The Agency asserts that, given the ambiguity of the award, an unfair labor practice for failure to comply will almost certainly be filed against it.

6.     Essence

      The Agency contends that the Arbitrator's award fails to draw its essence from the parties' collective bargaining agreement because the agreement provides that incentive awards committees are not required, but may be established by agreement, and the award orders such committees to be established. According to the Agency, if it violated the provision of the agreement regarding incentive awards committees, then the logical remedy is to include a voting Union member on any established committee; it is not to require the establishment of committees where the parties have not agreed to have one. The Agency maintains that the Arbitrator's award in this regard does not represent a reasonable or plausible interpretation of the agreement.

B.     Union's Opposition

      The Union challenges several of the Agency's factual statements underlying its exceptions. First of all, the Union contends that DIGAP is not the Agency's performance appraisal system under 5 U.S.C. chapter 43. Rather, the Union claims, DIGAP is a guide that DCMDW "created and has distributed to [its] subordinate organizations as if it were directive or policy making in nature." [n7] Opposition at 4.

      Secondly, the Union asserts that "DIGAP does not require OPM approval under 5 CFR Part 430." Id. The Union states that the Agency has provided no evidence with respect to OPM approval of DIGAP.

      Thirdly, the Union maintains that "DIGAP was not negotiated into [the Agreement] and DCMDW Supplemental Agreements[.]" Id. According to the Union, the unfair labor practice charge related to DIGAP relied on by the Agency is irrelevant to this case because it pre-dates the currently applicable DCMDW Supplemental Agreement.

1.     Contrary to Law

      The Union argues that DCMDW imposed DIGAP on unit employees and, in doing so, established generic, totally subjective critical job elements "without any regard for the differences in [employees'] duties and responsibilities[.]" Id. The Union states that these job elements are being used to comply with the Agency's statutory obligation under 5 U.S.C. § 4302(b)(4) to recognize and reward employees based on performance. In this regard, the Union notes that the Agency employs a pass-fail appraisal system, but that it also has established "totally subjective `Exceeds Fully Successful" criteria" in order "to justify the distribution of performance awards." Id. at 5. See Opposition, Attachment 9. According to the Union, the Civil Service Reform Act of 1978 (CSRA) was designed to eliminate such a "totally subjective" rating and award system. Id.

      The Union maintains that the Statute requires management to exercise its rights in accordance with applicable laws. According to the Union, "the arbitrator obviously recognized this fact in conjunction with his [ v59 p400 ] recognition of the fact that management violated the [parties'] collective bargaining agreement[.]" Id. In this regard, the Union notes that although "DIGAP was not the direct issue raised in the [U]nion's instant grievance, it was most certainly one of the root causes, identified by both the [U]nion and the [A]gency, that caused the [A]gency's failure to administer its Incentive Awards Program in a fair and equitable manner." Id. at 5.

      The Union reiterates that DIGAP is not the Agency's performance appraisal system, but only a DCMDW policy. The Union maintains that the Arbitrator was not asked to, and did not, assess the validity of the Agency's performance appraisal system. According to the Union, DCMDW's use of DIGAP and its "totally subjective" critical elements and performance standards was the evidence that proved to the Arbitrator that DCMDW had violated the collective bargaining agreement. Id. at 5. The Union contends that the Arbitrator decided the issue that was before him and ordered appropriate remedies to bring DCMDW back into compliance with the agreement and the Statute.

2.     Exceeded Authority

      The Union maintains that the Agency's exceeded authority exception also contains an argument concerning the bargaining relationship involved in this case. The Union contends that the Agency's argument is based on a mischaracterization of the parties to the grievance. According to the Union, the relationship at issue in the case concerns DCMDW and Council Local 2128, which is the local representing employees of the five Texas Sector offices involved in the unit-wide grievance. The Union asserts that the DCMDW Council of AFGE Locals referenced by the Agency has authority only as it is delegated from the individual locals. The Union maintains that the Agency's argument is an attempt to "dodge" DCMDW's "obligations in carrying out the remedy ordered by the [A]rbitrator." Opposition at 7.

3.     Nonfact

      The Union contends that the Agency's nonfact exception constitutes disagreement with the manner in which the Arbitrator wrote his award. The Union also asserts that the Agency cited to nothing in the award that could be considered a nonfact.

4.     Public Policy

      The Union reiterates its claim that DIGAP is not the Agency's performance appraisal system and that it was not negotiated into the parties' collective bargaining agreement. The Union maintains that the Agency's exception demonstrates that DCMDW intends to avoid bargaining with the Union over replacement of DIGAP or the remedies needed to make the Incentive Award Program fair and equitable as required by the award.

5.     Incomplete and Ambiguous

      According to the Union, the original grievance in this case "shows a direct correlation to the decision and award of this [A]rbitrator." Id. at 6. The Union maintains that Agency representatives were present at all stages of the grievance and arbitration procedure. Thus, the Union asserts, the Agency fully understands the implications of the Arbitrator's award and what it must do to comply with the remedy he ordered.

6.     Essence

      The Union claims that the argument ignores the fact that incentive awards committees were "in place at the time the grievance was filed" and that DCMDW had not bargained with Council Local 2128 on this subject as required by the agreement. Id. at 7.

IV.     Analysis and Conclusions

A.     The Award is Contrary to Law to the Extent that it Requires the Agency to Replace the Existing Performance Appraisal System

      The Agency's claim that the Arbitrator's award affects management's right, under § 7106(a)(2)(A) and (B) of the Statute, to determine performance standards and critical elements is a claim that the award is deficient under § 7122(a)(1) because it is contrary to law. Consequently, the Authority reviews the question of law raised by the exception and the Arbitrator's award de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994). Under the de novo standard, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. Id.

      When an agency asserts that an award affects management's rights under § 7106(a) of the Statute, the Authority applies the framework set forth in United States Dep't of the Treasury, Bu. of Engraving and Printing, Washington, D.C., 53 FLRA 146 (1997) (BEP). Upon a finding that an award affects a management right under § 7106(a), the Authority applies a two-prong test. Under prong I of BEP, the Authority examines [ v59 p401 ] whether the award provides a remedy for a violation of applicable law, under § 7106(a)(2) of the Statute, or a contract provision that was negotiated pursuant to § 7106(b) of the Statute. Id. at 153-54. If the award provides such a remedy, then the Authority will find that the award satisfies prong I and will address prong II. Under prong II, the Authority considers whether the award reflects a reconstruction of what management would have done if management had not violated the law or contractual provision at issue. Id. at 154.

      The award affects management's right, under § 7106(a)(2)(A) and (B), to determine the content of critical elements and performance standards. By its terms, the award imposes a stay on the recommendation and distribution of all performance awards pending negotiation over equal distribution of such awards and requires maintenance of equal distribution of awards unless or until the Agency replaces the existing "totally subjective" performance appraisal system of DIGAP. So construed, the award requires the Agency to replace its performance appraisal system as a condition precedent to implementing an awards system based on a principle other than equal distribution. In short, the award prevents the Agency from maintaining its existing appraisal system under DIGAP unless it also maintains an equal distribution awards system. Thus, the award requires the Agency to bargain on the exercise of its right to determine the content of the elements and standards contained in DIGAP.

      Management's rights to direct employees, under § 7106(a)(A) of the Statute, and to assign work, under § 7106(a)(B), are exercised, among other ways, through the establishment of the critical elements and performance standards to be applied in an agency's performance appraisal system. See, e.g., NTEU, 3 FLRA 769, 775 (1980), aff'd sub nom. NTEU v. FLRA, 691 F.2d 553 (D.C. Cir. 1982). In addition, management's rights under § 7106 include not only the right to act, but also the right not to act. See, e.g., AFGE, AFL-CIO, Local 1858, 10 FLRA 440, 443-44 (1982). The Arbitrator's award requires an equal distribution of incentive awards. In order to establish a performance award system other than a system requiring equal distribution of such awards, the Arbitrator's award requires the replacement of DIGAP. Thus, the Agency cannot both maintain its existing performance appraisal system and impose a performance award system other than one involving equal distribution. By imposing such a condition on the Agency's determination of its performance standards and/or critical elements, the award affects management's rights to direct employees and assign work. See, e.g., AFGE, Local 2062, 39 FLRA 857, 859 (1991). [n8] 

      Having determined that the award affects management's rights, to satisfy prong I of BEP, the Arbitrator's award must be enforcing an applicable law within the meaning of § 7106(a)(2), or a contractual provision negotiated under § 7106(b) of the Statute. However, even assuming that the award satisfies prong I of BEP, it is deficient under prong II because it does not constitute a proper reconstruction of what the Agency would have done had there been no violation of Article 11, Section 1. See, e.g., SSA, Boston Region (Region 1), Lowell Dist. Office, Lowell, Mass., 57 FLRA 264, 269 (2001) (SSA, Boston Region).

      The Arbitrator imposed conditions on the Agency's right to change its performance standards and critical elements as remedy for its violation of Article 11, Section 1. Article 11, Section 1 requires that the performance award system be administered in a fair and equitable manner. It does not address the Agency's performance appraisal system. Thus, by requiring replacement of the critical elements and performance standards contained in DIGAP, the Arbitrator's award does not reflect a reconstruction of what the Agency would have done if it had complied with Article 11, Section 1. See United States Dep't of Defense, Dep'ts of the Army and Air Force, Alabama Nat'l Guard, Northport, Ala., 55 FLRA 37, 41 (1998); SSA, Office of Hearings and Appeals, 54 FLRA 1365, 1373 (1998). In this respect, the award is deficient. Consequently, we set aside this portion of the award. SSA, Boston Region, 57 FLRA at 269. It should be noted that the Agency did not except to the portion of the award that requires bargaining on awards criteria.

      Because the award is deficient insofar as it affects management's rights under § 7106(a)(2) and does not reflect a reconstruction of what the Agency would have done absent the violation, it is unnecessary to address the Agency's other arguments claiming that the award in this regard is contrary to law and regulation.

      Accordingly, we find that the Arbitrator's award as to DIGAP is deficient because it is contrary to law under § 7122(a)(1) of the Statute and set aside that portion of the award. [ v59 p402 ]

B.     The Award is Not Deficient on Exceeded Authority Grounds to the Extent that it Addresses the Agency's Performance Appraisal System

      Arbitrators exceed their authority when they resolve an issue not submitted to arbitration. See United States Dep't of the Interior, Nat'l Park Service, Golden Gate Nat'l Recreation Area, S.F., Cal., 55 FLRA 193, 194 (1999). Arbitrators do not exceed their authority by addressing any issue that is necessary to decide a stipulated issue. See NATCA, MEBA/NMU, 51 FLRA 993, 996 (1996), or by addressing any issue that necessarily arises from issues specifically included in a stipulation. See Air Force Space Div., L.A. Air Force Station, Cal., 24 FLRA 516, 519 (1986). In determining whether an arbitrator has exceeded his or her authority, the Authority accords an arbitrator's interpretation of a stipulation of issues the same substantial deference that it accords an arbitrator's interpretation and application of a collective bargaining agreement. See United States Info. Agency, Voice of Amer., 55 FLRA 197, 198 (1999). See also SSA, Baltimore, Md., 57 FLRA 181, 183 (2001) (SSA, Baltimore).

      As to the Agency's argument that the Arbitrator exceeded his authority by addressing the performance appraisal system, we defer to the Arbitrator's interpretation of the stipulated issue in this case. See, e.g., SSA, Baltimore, 57 FLRA at 183. In this regard, the Arbitrator's interpretation of the stipulated issues with respect to the administration of the performance award system to include the basis on which awards are determined, and not just the manner in which the system itself is executed, necessarily arose from his consideration, based on the record, of the Agency's implementation of the performance award system as a whole. The Agency's disagreement with the Arbitrator's interpretation of the stipulated issue does not demonstrate that the award is deficient. Id.

      Accordingly, we deny the Agency's exception concerning the Arbitrator's addressing the performance appraisal system.

C.     The Award is Deficient on Exceeded Authority Grounds to the Extent that the Remedy is Broader than the Scope of the Unit

      As to the Agency's claim that the Arbitrator's remedy exceeds the scope of the grievance, it should be noted in this connection that the Union describes the grievance in this case as a "unit-wide" grievance. We construe the Union's description of the grievance to mean that since Local 2128 has been designated by AFGE to represent unit employees in the Texas Sector, the grievance is limited to unit employees in that sector. The Texas Sector is a sub-unit of DCMDW.

      The first paragraph of the Arbitrator's award requires that the DCMDW incentive award program be made to comply with law, regulation, and the Agreement and that provisions of DLA, DCMA, DCMDW policies that do not comply with law be brought into compliance. By its terms, therefore, the scope of the remedy exceeds the scope of the grievance. Specifically, the grievance seeks relief only for Texas Sector employees, who are represented by Local 2128. There is no evidence in the record that Local 2128 is the exclusive representative of employees in DLA, DMCA, or DMCDW. By requiring DLA, DMCA, and DMCDW incentive award policies to be brought into compliance with law, regulation, and the Agreement, the award provides benefits to employees beyond those who are represented by Local 2128. [n9] That is, the required revisions would apply to other employees in the DCMA and DCMDW outside the Texas Sector and would be determinative of their rights. Because in this manner the Arbitrator included in the remedy employees who were not included in the grievance, to the extent that the Arbitrator's award applies to employees other than those represented by Local 2128, the award exceeds his authority. See United States Environmental Protection Agency, 57 FLRA 648, 651 (2001) (citing NLRB, 27 FLRA 435 (1987)) (arbitrator exceeded authority by defining the rights of employees who were not a part of the grievance). See also Corpus Christi Army Depot.

      We also find that first paragraph of the Arbitrator's award, to the extent that it concerns compliance of DLA, DMCA, and DMCDW performance awards policies with law, regulation, and the Agreement, exceeds the authority of the Arbitrator and is deficient under § 7122(a)(2) of the Statute. To the extent that the award concerns the application of those performance award policies in the Texas Sector consistent with law, regulation, and the agreement, the award is not deficient. Consequently, to the extent that the remaining exceptions concern that aspect of the award, it is necessary to address those exceptions. [ v59 p403 ]

D.     The Award is not Deficient on the Grounds of Nonfact

      To establish that an award is based on a nonfact, the appealing party must show that a central fact underlying the award is clearly erroneous, but for which the arbitrator would have reached a different result. See United States Dep't of the Air Force, Lowry AFB, Denver, Colo., 48 FLRA 589, 593 (1993). The Authority will not find an award deficient on the basis of the arbitrator's determination on any factual matter that the parties disputed at hearing. Id. at 594 (citing Nat'l Post Office Mailhandlers v. United States Postal Serv., 751 F.2d 834, 843 (6th Cir. 1985). Additionally, "an arbitrator's interpretation of a collective bargaining agreement does not constitute a matter that can be challenged as a nonfact." United States Dep't of Veterans Affairs, Ralph H. Johnson Medical Center, Charleston, S.C., 57 FLRA 489, 493 (2001).

      The Agency claims that the Arbitrator's findings and remedy are based on a nonfact. The alleged nonfact is the Arbitrator's misinterpretation of the scope of the grievance. However, an arbitrator's interpretation of the scope of the grievance does not constitute a matter that can be challenged as a nonfact. See, e.g., AFGE, Local 2142, 46 FLRA 61, 64 (1992). As noted above, based on the record, the Arbitrator construed the grievance as contesting the Agency's implementation of the performance award system as a whole. The Arbitrator's conclusions derived from the record provide no basis for finding the award deficient. See, e.g., NTEU, Chapter 45, 52 FLRA 1458, 1466 (1997).

      Accordingly, we deny the Agency's nonfact exception.

E.     The Award is not Deficient on Public Policy Grounds

      Under § 7122(a)(2) of the Statute, the Authority will find an arbitration award deficient on grounds similar to those applied by Federal courts in private sector labor relations cases. In the private sector, courts will find an arbitration award deficient when the award is contrary to public policy. However, this ground is "extremely narrow." United States Postal Serv. v. Nat'l Assoc. of Letter Carriers, 810 F.2d. 1239, 1241 (D.C. Cir. 1987), cert. dismissed, 108 S. Ct. 1589 (1983). In order to find an award deficient, the public policy must be "explicit," well[-]defined and dominant." W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766 (1983). In addition, the policy is to be ascertained "`by reference to the laws and legal precedents and not from general considerations of supposed public interests.'" Id. (quoting Muschany v. United States, 324 U.S. 49, 66 (1945); accord United Paperworkers v. Misco, Inc., 108 S.Ct. 364, 373 (1987). The violation of such a public policy "must be clearly shown" if an award is to be found deficient. 108 S. Ct. at 374.

      The Agency has misconstrued the award. Specifically, the award requires the Agency to "replace" DIGAP. It does not require the Agency to negotiate the replacement of DIGAP. Moreover, nothing in this aspect of the award requires the Agency to avoid any bargaining obligation it might have or is otherwise inconsistent with the public policy in favor of collective bargaining. Thus, the Agency's public policy exception provides no basis for finding the award deficient. [n10] 

      Accordingly, we deny the Agency's public policy exception.

F.     The Award is not Deficient on the Grounds that it is Incomplete or Ambiguous

      An award that is incomplete, ambiguous, or contradictory so as to make implementation impossible is deficient under section 7122(a)(2) of the Statute. See, e.g., NATCA, 55 FLRA 1025, 1027 (1999) (NATCA). In order for an award to be found deficient on this ground, the appealing party must show that implementation of the award is impossible because the meaning and effect of the award is too unclear or uncertain. See United States Dep't of the Army, Corpus Christi Army Depot, Corpus Christi, Tex., 56 FLRA 1057, 1074 (2001).

      The Agency contends that the award is incomplete because the Arbitrator provided no findings or rationale in support of his conclusion that the Agency violated the Agreement by failing to fairly and equitably administer the performance award program. The Authority has consistently stated that arbitrators are not obligated to provide a rationale for their findings unless required to do so by contract, submission of the parties, or law. See United States Dep't of the Treasury, United States Customs Service, Port of New York and Newark, 57 FLRA 718, 721 (2002) petition for review denied as to other matters, Case No. 02-1153 (D.C. Cir. Apr. 25, 2003). See also Wissman v. SSA, 848 F.2d 176 (Fed. Cir. 1988) (holding that there is no general statutory obligation that [ v59 p404 ] an arbitrator set forth specific findings). In this regard, therefore, the fact that the Arbitrator found that the Agency violated the Agreement, without providing further findings or a rationale for this conclusion, provides no basis for finding the award deficient on the grounds of incompleteness.

      Further, the Agency has not demonstrated that the award is deficient because it is contradictory. Specifically, the Agency has not shown how the remedy awarded by the Arbitrator is contradicted by his findings on the merits of the grievance. Moreover, even if such findings were inconsistent with the remedy, the Agency has failed to demonstrate that implementation of the award as to the performance award program is impossible. See NATCA, 55 FLRA at 1027.

      Insofar as the Agency's exception contends that the award is deficient because it is impossible to determine how its awards system can be made consistent with DCMA or DCMDW policy, we find that the Agency has not demonstrated that it is impossible to comply with the award. Specifically, the Agency has provided no evidence that DMCA or DCMDW awards policy is unclear or subject to misinterpretation. Insofar as the Agency's claim that the award is ambiguous pertains to the requirements concerning the performance appraisal system, we have found above that the portions of the award establishing those requirements are deficient as contrary to law. In light of that finding, it is not necessary to address the claim that the award pertaining to the performance appraisal system is ambiguous.

      Accordingly, we deny the Agency's exception that the award is deficient because it is incomplete and contradictory and not rule on the claim as to ambiguity.

G.     The Award is not Deficient on Essence Grounds

      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 cases in the private sector. See 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 Agency's exception fails to demonstrate that the award as to incentive awards committees is deficient on essence grounds. Article 11, Section 2 of the Agreement allows for Union representatives on incentive award committees and the Supplemental Agreement provides that such committees may be negotiated at the local level. Consequently, the Arbitrator's award interpreting the agreement to require the Agency and Local 2128 to negotiate on the establishment of incentive awards committees that include voting Union representatives is not an implausible or unreasonable interpretation of those agreements.

      Accordingly, we deny the Agency's essence exception.

V.     Decision

      We strike the portion of the award that concerns critical elements and performance standards in DIGAP. We modify the first paragraph of the award to require application of DCMA and DCMDW performance awards policies to the unit represented by the Union, i.e., to the Texas Sector, in a manner that is consistent with law, regulation, and the Agreement. We deny the Agency's exceptions to the remaining portions of the award. [ v59 p405 ]


APPENDIX

1. Article 2, Section 1 of the parties' Master Agreement provides as follows:

ARTICLE 2
GOVERNING LAWS AND REGULATIONS
SECTION 1
The Agency and the DLA Council are and shall be governed by all applicable laws of the United States, including those in effect [on] the effective date of this Master Agreement and those which are subsequently enacted. They also are and shall be governed by all applicable Government-wide regulations in effect at the time that this Agreement is executed. The Agency shall effectively enforce all provisions of the Civil Service Reform Act of 1978 which it has a statutory duty to enforce, but it will not enforce any Government-wide rule or regulation promulgated after the effective date of this Master Agreement which is in conflict with the provisions of this Agreement unless such rule or regulation is properly subject to the provisions of § 7116(a)(7).

2. Article 11, Sections 1 and 2 of the parties' Master Agreement provides as follows:

ARTICLE 11
INCENTIVE AWARDS
SECTION 1
The Incentive Awards Program will be administered on a fair and equitable basis. Any employee considered deserving of an award by his/her supervisor will be nominated in a timely manner.
SECTION 2
The DLA Council Local may be afforded the opportunity to have a voting representative participate on any established incentive awards committee for all awards applicable to bargaining unit employees that require committee recommendation in accordance with procedures and appropriate arrangements negotiated at the PLFA level.
[DCMDW Supplemental Agreement adds to Section 2 as follows: Incentive Awards Committees may be established subject to agreement between SLFA/TLFA Commanders/PSE Heads and Local Union Presidents. Procedures may be negotiated locally.]

Opinion of Member Carol Waller Pope, dissenting in part:

      I agree with the majority that the Agency has not demonstrated that the award is based on nonfact, violates public policy, is incomplete and ambiguous, and/or fails to draw its essence from the parties' agreement. I also agree that the Agency has not demonstrated that the Arbitrator exceeded his authority by addressing the Agency's performance appraisal system. I disagree with the majority on the following two points.

      First, I do not agree that the Arbitrator exceeded his authority by awarding a remedy to employees not encompassed by the grievance. In this regard, as the Union acknowledges (Opposition at 2), the grievance in this case was limited to employees in "the Texas sector." Exceptions, Enclosure 2. There is no claim that, at any time, the Union requested to broaden the grievance to include any other employees. Accordingly, the most natural reading of the award (and a reading that renders the award not deficient) is that it applies only to the employees encompassed by the grievance. The majority's construction of the award as including other employees is unwarranted and results, unnecessarily, in modifying the award.

      Second, although I agree that the award does not reconstruct the Agency's violations of Article 11, Section 1 and 2, I do not agree that the appropriate remedy is to set aside the award. In this regard, there is no question that the contract provisions themselves are enforceable and that the Agency violated those provisions; the majority does not find to the contrary. That is, only the remedy is deficient. Accordingly, for the reasons set forth in my separate opinion in United States Dep't of Veterans Affairs, Cleveland Regional Office, Cleveland, Ohio, 59 FLRA No. 38 (September 29, 2003), I would remand this matter to the parties, absent settlement, for resubmission to the Arbitrator for a determination as to whether an alternative remedy is appropriate. See, e.g., AFGE, Local 2608, 56 FLRA 776, 778 (2000) (Authority remanded where remedy was set aside but finding of underlying violation was undisturbed).

      Based on the foregoing, I write separately.



Footnote # 1 for 59 FLRA No. 57 - Authority's Decision

   Member Pope's separate opinion, dissenting in part, is set forth at the end of this decision.


Footnote # 2 for 59 FLRA No. 57 - Authority's Decision

   The Union filed a request for permission to supplement the record, attaching a copy of a final arbitration award in another case involving the Union. Arbitration awards are not precedential. See, e.g., AFGE, Local Union No. 171, 58 FLRA 469, 471 (2003). Consequently, we deny the Union's request.


Footnote # 3 for 59 FLRA No. 57 - Authority's Decision

   The text of Article 11, Sections 1 and 2 is set forth in the Appendix to this decision. See also Grievance at 1.


Footnote # 4 for 59 FLRA No. 57 - Authority's Decision

   The text of Article 2, Section 1 is set forth in the Appendix to this decision. See also Grievance at 1.


Footnote # 5 for 59 FLRA No. 57 - Authority's Deci