United States, Department of the Air Force, Headquarters 92ND Air , Refueling Wing, Fairchild Air Force Base, Washington (Agency) and Fairchild Federal Employees Union, Local 987 (Union)

[ v59 p434 ]

59 FLRA No. 64

UNITED STATES
DEPARTMENT OF THE AIR FORCE,
HEADQUARTERS 92ND AIR
REFUELING WING, FAIRCHILD AIR FORCE BASE, WASHINGTON
(Agency)

and

FAIRCHILD FEDERAL
EMPLOYEES UNION
LOCAL 987
(Union)

0-AR-3705

_____

DECISION

November 6, 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 Vern E. Hauck 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 grievance was not substantively arbitrable, and he split the costs of arbitration between the parties. For the following reasons, we deny the exceptions.

II.      Background and Arbitrator's Award

      As relevant here, the grievant, a probationary employee, was removed, and a grievance was filed. When the grievance was unresolved, it was submitted to arbitration, where the Arbitrator framed the issue, in pertinent part, as follows: "Whether the grievance . . . is . . . substantively arbitrable?" [n2]  Award at 2.

      The Arbitrator found that the grievance was not substantively arbitrable, and he concluded that he lacked jurisdiction to resolve the merits of the dispute. The Arbitrator noted that Article 11.4 of the parties' agreement "requires that fees and expenses will be borne by the losing party, with the arbitrator indicating the percentage of costs each party will pay." [n3]  Id. at 10. The Arbitrator then held that his "bill covering this threshold award shall be borne equally by the parties." Id.

III.     Positions of the Parties

A.     Agency Exceptions

      The Agency excepts, on two grounds, to the Arbitrator's decision to split the costs of arbitration between the parties. First, the Agency argues that this decision fails to draw its essence from Article 11.4 of the parties' agreement because, although the Arbitrator did not name a "losing party," he "ruled against the Union in every respect, for all practical purposes making the Union the losing party." Exceptions at 3. Second, the Agency contends that the Arbitrator "exceeded his authority by forcing the Agency to participate in the arbitration hearing[,]" despite the fact that the grievance was not arbitrable. Id.

B.     Union Opposition

      The Union argues that the award draws its essence from the agreement because "no party was determined to be the `losing party.'" Opp'n at 6. The Union also claims that the Arbitrator did not exceed his authority, because the Arbitrator had authority under the agreement to require arbitration in order to resolve the arbitrability issues.

IV.      Analysis and Conclusions

A.     The award draws its essence from the parties' agreement.

      The Authority will find an award deficient as failing to draw its essence from a collective bargaining agreement when the excepting 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 agreement as to manifest an infidelity to the obligation [ v59 p435 ] 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's review of an arbitrator's interpretation of contract provisions is deferential because it is the arbitrator's interpretation for which the parties bargained. See United States Dep't of the Air Force, Seymour Johnson Air Force Base, N.C., 56 FLRA 249, 251 (2000) (citing Dep't of HHS, SSA, 32 FLRA 79, 88 (1988)).

      Article 11.4 of the parties' agreement provides: "Fees and expenses will be borne by the losing [p]arty. Accordingly, the Arbitrator will specify a losing party. If the Arbitrator decides there is no losing party, the Arbitrator will indicate the percentage of arbitration costs each party will pay." Exceptions, Attachment 2 at 17 (Negotiated Agreement). Thus, the Article directs the Arbitrator to bill "the losing party" for its costs, but gives the Arbitrator discretion to allocate costs between the parties where the Arbitrator finds that there is no "losing party."

      In NFFE, Local 2030, 56 FLRA 667 (2000), the Authority resolved exceptions to an arbitration award that apportioned fees equally between the parties, despite the fact that the grievance was sustained and the parties' agreement required the losing party to pay the fees. In denying the union's essence exception, the Authority noted that the issue of fees was presented to the Arbitrator and stated that, by splitting the fees, the arbitrator interpreted the agreement provision concerning the splitting of fees and, "pursuant to the discretion expressly granted him by the Agreement, determined that neither party was the clear losing party." Id. at 670.

      Here, the Arbitrator expressly acknowledged the wording of Article 11.4, and concluded that his costs "shall be borne equally by the parties." Award at 10. Thus, as in NFFE, Local 2030, the issue of costs was before the Arbitrator, and the Arbitrator, by implication, determined that neither party was the clear losing party. The Agency does not explain how it was irrational, unfounded, implausible, or in manifest disregard of the agreement for the Arbitrator to find implicitly that there was no "losing party," particularly given the fact that the Arbitrator never resolved the merits of the grievance. [n4] 

      In these circumstances, we find that the award draws its essence from the parties' agreement, and we deny the exception.

B.     The Arbitrator did not exceed his authority.

      An arbitrator exceeds his or her authority when the arbitrator fails to resolve an issue submitted to arbitration, resolves an issue not submitted to arbitration, disregards specific limitations on his or her authority, or awards relief to persons who are not encompassed within the grievance. See United States DOD, Def. Logistics Agency, Def. Distrib. Depot, New Cumberland, Pa., 58 FLRA 750, 758 (2003) (citations omitted).

      We disagree with the Agency's contention that the Arbitrator exceeded his authority "by forcing the Agency to participate in the arbitration hearing[,]" despite the fact that the grievance was not arbitrable. Exceptions at 3. In this regard, the Statute expressly provides that collective bargaining agreements "shall provide procedures for the settlement of grievances, including questions of arbitrability." 5 U.S.C. § 7121(a)(1) (emphasis added). Accord Dep't of the Air Force, Langley Air Force Base, Hampton, Va., 39 FLRA 966, 969 (1991) (Air Force). Consistent with this, the Authority has held that a refusal by one party to participate in the procedures for the resolution of grievances, including questions of arbitrability, conflicts with the requirements of § 7121. See Air Force, 39 FLRA at 969 (citing, inter alia, Dep't of Labor, Employment Standards Admin./Wage & Hour Div., Wash., D.C., 10 FLRA 316, 321 (1982)). Such a refusal may not be justified by a party's contention, "however arguable or reasonable," that the parties intended the subject matter of the grievance to be excluded from the coverage of the negotiated grievance and arbitration procedures. [n5]  Id. (citing Dep't of the Navy, Portsmouth Naval Shipyard, Portsmouth, N.H., 11 FLRA 456 (1983)).

      Based on the foregoing, the Agency has not demonstrated that the Arbitrator failed to resolve an issue submitted to arbitration, resolved an issue not submitted to arbitration, disregarded specific limitations on his authority, or awarded relief to persons who are not encompassed within the grievance. Accordingly, the Agency has not demonstrated that the Arbitrator exceeded his authority, and we deny the exception.

V.     Decision

      The Agency's exceptions are denied. [ v59 p436 ]


Dissenting opinion of Member Armendariz:

      The Union filed a grievance challenging the termination of a probationary employee. The Arbitrator ruled, in agreement with the Agency's contention, that the grievance was not substantively arbitrable and that he did not have jurisdiction to consider the merits of the grievance. He then directed that his fees "shall be borne equally by the parties." Award at 10. I believe that this latter portion of the award does not draw its essence from the parties' agreement and should be set aside.                                             

      The Authority will find an award deficient because it fails to draw its essence from the 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 purpose of the agreement so 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).

      In this case, Article 11.4 of the parties' agreement, entitled "Fees and Expenses," provides:

Fees and expenses will be borne by the losing [p]arty. Accordingly, the Arbitrator will specify a losing party. If the Arbitrator decides there is no losing party, the Arbitrator will indicate the percentage of arbitration costs each party will pay.

Exceptions, Attachment 2 at 17. By directing the parties to share the fees of the arbitration proceeding equally, the Arbitrator implicitly determined that there was no losing party within the meaning of the agreement. However, in my view this determination is irrational, unfounded, and implausible. The Union filed a grievance and the Arbitrator effectively dismissed the grievance after finding that it was not substantively arbitrable. As the Agency correctly claims, "the Arbitrator ruled against the Union in every respect, for all practical purposes making the Union the losing party." Exceptions at 3. These circumstances cannot be rationally and plausibly construed in any manner other than that the Union was the losing party within the meaning of Article 11.4.

      I note that the Authority does not appear to have addressed any similar contractual "loser pays" provision in a case in which, as here, an arbitrator dismissed a grievance because it was not substantively arbitrable. In contrast, the Authority has addressed such provisions in cases in which arbitrators have addressed the merits of a grievance, and has found that those awards drew their essence from the agreements involved. See, e.g., NFFE Local 2030, 56 FLRA 667 (2000); NFFE Local 11, 50 FLRA 528 (1995). In my view, the fact that the Arbitrator in the instant case dismissed the grievance after finding that he was precluded from addressing the merits makes it more clear, rather than less clear, that the Union was the losing party. Arbitrators' discussions of the merits of a grievance can often be read in a number of ways; this Arbitrator's resolution dismissing the grievance can be read only one way.

      For these reasons, I would find that the Arbitrator's fee assessment fails to draw its essence from the agreement, and I would set it aside.



Footnote # 1 for 59 FLRA No. 64 - Authority's Decision

   Member Armendariz's dissenting opinion is set forth at the end of this decision.


Footnote # 2 for 59 FLRA No. 64 - Authority's Decision

   The Arbitrator framed additional issues, but those issues are not relevant here. See Award at 2.


Footnote # 3 for 59 FLRA No. 64 - Authority's Decision

   Article 11.4 of the parties' agreement, "Fees and Expenses," provides: "Fees and expenses will be borne by the losing Party. Accordingly, the Arbit