United States, Department of Transportation, Federal Aviation Administration (Agency) and National Air Traffic Controllers Association (Union)
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59 FLRA No. 103
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
NATIONAL AIR TRAFFIC
January 16, 2004
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 Joseph M. Sharnoff 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 Union grievance concerns an employee's conversion of sick leave balance to cash (sick leave buy back) at the time of retirement, pursuant to an agreement provision. For the reasons that follow, we find that the grievance concerns a retirement matter that is not within the Arbitrator's jurisdiction.
II. Background and Arbitrator's Award
The Union filed a grievance alleging, on behalf of a retired employee (the retiree), that the Agency violated Article 25, Section 13 of the parties' agreement when the retiree was not compensated for his unused sick leave in accordance with the agreement provision. The retiree had switched from the Civil Service Retirement System (CSRS) to the Federal Employees Retirement System (FERS) in 1999. At the time of his conversion from CSRS to FERS, his sick leave balance was 1527 hours, and when he retired his balance was 1453 hours.
When the matter was not resolved, the Union submitted it to arbitration. The parties did not agree on a statement of the issue and the Arbitrator framed the issue as follows:
Whether the Union met its burden of demonstrating that the Parties' Agreement, at Article 25, Section 13, was violated by the Agency when [the retiree], upon his retirement, was not provided a lump sum buy back of sick leave and, if so, what is the appropriate remedy?
Award at 3.
Three threshold procedural issues were presented to the Arbitrator: (1) the Agency questioned whether the issue was properly before the Arbitrator because the grievance involved a retirement matter which was excluded from the parties' grievance and arbitration procedures; (2) the Agency questioned whether the matter was properly before the Arbitrator because the grievant was a retiree and the Union had no jurisdiction to represent retirees who were no longer employees of the Agency; and (3) the Union contended that the procedural issues presented by the Agency were prohibited by the agreement because they were not presented to the Neutral Evaluator, as required by the parties' agreement and by a memorandum of understanding. [n2] The Arbitrator found that the procedural issues raised by the Agency were not properly before him because the Agency had not raised them before the Neutral Evaluator as required by the parties' memorandum of understanding.
As to the merits, the Arbitrator determined that in order to give full effect to both Article 25, Section 13 of the parties' agreement and the regulations regarding retirement computations, the retiree should have been given the option of having his accumulated sick leave applied to the CSRS portion of his retirement annuity [ v59 p580 ] pursuant to the retirement regulations or availing himself of the sick leave buy back option at 40 percent, pursuant to the parties' agreement. In reaching his decision, the Arbitrator noted that the parties did not discuss the application of Article 25, Section 13 to employees under CSRS, or to employees who converted from CSRS to FERS. The Arbitrator found that there would be no conflict between the agreement provision and the regulations regarding the calculation of the annuity under CSRS, which includes unused sick leave, if the employee had been given the option of selecting how his unused sick leave was to be applied.
According to the Arbitrator, if the employee decided that all of his unused sick leave should be included in the CSRS portion of his retirement annuity, then there would be no sick leave available for sick leave buy back under Article 25, Section 13. However, if the employee chose to use the sick leave buy back provision in the agreement, the employee would have a zero balance in his sick leave account upon retirement and would have no sick leave available to count toward the CSRS portion of the retirement annuity. The Arbitrator directed the Agency to return the retiree to the "status quo ante, to the extent possible," and to offer him the options of either having his sick leave applied to the sick leave buy back under Article 25, Section 13, or included in the computation of the CSRS portion of his retirement annuity. Award at 24. The Arbitrator noted that if the retiree chose the latter option, no further action would be required.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that to the extent the grievance pertains to the application of retirement rules, it is not a matter subject to the grievance procedures under § 7121(c)(2) of the Statute and Article 9, Section 3 b. of the parties' agreement. Exceptions at 6.
The Agency also claims that the award is contrary to law because it provides for buy out of sick leave at retirement under CSRS, contrary to 5 C.F.R. § 846.304(b)(3). The Agency contends that for CSRS annuitants, accumulated sick leave hours must be calculated into his or her retirement annuity pursuant to "Government[-]wide Rules and Regulations." Exceptions at 4-5.
The Activity also contends that the award's remedy giving the retiree a choice in how the balance of CSRS sick leave hours are used was not within the Arbitrator's authority and contrary to law, rule and regulation. The Agency relies on 5 C.F.R. § 846.304 and 5 U.S.C. 8339(m). The Agency argues that the regulations do not "entertain the opportunity to make an election according to agreements." Exceptions at 4. The Agency maintains that it negotiated an agreement with the Union on sick leave buy back only for sick leave hours accumulated under FERS. Id. at 5.
B. Union's Opposition
The Union contends that any sick leave that is earned and/or used prior to retirement is "solely a sick leave issue." Opposition at 4. The Union asserts that under Section 347 of the 1966 Transportation Appropriations Bill, sick leave is negotiable and grievable within the Agency, and the parties negotiated Article 25, Section 13 under that authority. The Union argues that what an employee does with his or her sick leave while employed is negotiable, grievable, and covered by the collective bargaining agreement. The Union contends that "[a]fter an employee retires any sick leave remaining must be used to compute any CSRS annuity." Opposition at 6.
The Union asserts that "the Agency once again makes the claim that the issue now before the Authority is a retirement issue and therefore barred from the grievance procedure under [§ 7121(c)(2) of the Statute] and Article 9, Section 3b. of the parties' [a]greement." Id. at 7. According to the Union, "[t]his argument was already heard and dismissed by the Arbitrator." Id. In this regard, the Union argues that any threshold issue had to have been presented to the neutral evaluator, consistent with the parties' grievance procedure. The Union contends that because the Agency did not make this argument before the neutral evaluator, the Agency cannot raise it now. Id. at 7-8. In addition, the Union asserts that § 7121(c)(2) of the Statute does not exclude the grievance from the negotiated grievance procedure, and relies on Muniz v. United States, 972 F.2d 1304 (Fed. Cir. 1992) (Muniz), for support.
The Union argues that under the parties' agreement, the retiree can either have the sick leave credited towards his CSRS annuity or at his election cash out at forty cents on the dollar to be paid as a lump sum upon retirement. Opposition at 9.
IV. Analysis and Conclusions
The Authority's role in reviewing arbitration awards depends on the nature of the exceptions raised by the appealing party. See United States Customs Serv. v. FLRA, 43 F.3d 682, 686 (D.C. Cir. 1994). In NTEU, Chapter 24, 50 FLRA 330, 332 (1995), the Authority stated that if the arbitrator's decision is challenged, as it is here, on the ground that it is contrary to any law, rule, [ v59 p581 ] or regulation, the Authority will review the legal question de novo. In applying a standard of de novo review, 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. See id. [n3]
Section 7121(c)(2) of the Statute excludes from the scope of negotiated grievance procedures "any grievance concerning . retirement." [n4] We first examine the Agency's exception that the subject matter of the grievance concerns retirement within the meaning of § 7121(c)(2) of the Statute. We note that the parties' negotiated sick leave buy back option is available only in connection with an employee's retirement. Article 25, Section 13 of the parties' agreement states:
Section 13. Federal Employees Retirement System (FERS) employees shall be eligible upon retirement for a Sick Leave Buy Back option as follows:
a) An employee who attains the required number of years service for retirement shall receive a lump sum payment for forty (40) percent of the value of his or her accumulated sick leave as of the effective date of their retirement.
Award at 10. [n5] Thus, as written, the agreement specifically provides that the sick leave buy back option is available to employees only upon retirement. By its terms, the sick leave buy back option is not available to employees prior to their retirement. Accordingly, consistent with the parties' agreement, the sick leave buy back option is a part of, and is inextricably intertwined with, the retirement process. By definition, as the sick leave buy back option is a component of the retirement process and the grievance involves the application of this option, the grievance concerns retirement and, therefore, is not a matter subject to the negotiated grievance procedure under § 7121(c)(2) of the Statute. See Nat'l Air Traffic Controllers Ass'n., MEBA, AFL-CIO, 51 FLRA 204, 207-08 (1995) (NATCA). [n6]
We reject the Union's contention that the Agency's § 7121(c)(2) argument is without merit because it was already heard and dismissed by the Arbitrator. As noted above, under the applicable standard of de novo review, we assess whether the award asserting jurisdiction over the grievance is contrary to law. For the reasons set forth above, we conclude that the grievance concerns retirement and, therefore, is not a matter subject to the negotiated grievance procedure under § 7121(c)(2) of the Statute. [n7] Accordingly, the Arbitrator did not have jurisdiction to resolve the grievance, and his award resolving the grievance is, therefore, deficient.
The Arbitrator's determination that the grievance was arbitrable is inconsistent with § 7121(c)(2) of the Statute, and in that respect is deficient. Thus, we set aside the award. [n8] [ v59 p582 ]
Dissenting Opinion of Member Carol Waller Pope:
In my view, the majority improperly sets aside the award. Accordingly, I dissent.
The Authority has specifically held that an exception alleging that a grievance is barred under § 7121(c) of the Statute is not properly before the Authority under § 2429.5 of the Authority's Regulations where an agency did not raise the claim before the arbitrator. United States Dep't of the Interior, Nat'l Park Serv., Golden Gate Nat'l Recreation Area, S.F., Cal., 55 FLRA 193, 195 (1999) (§ 7121(c)(3) claim). In this case, the Agency's argument that the grievance was not arbitrable was raised to the Arbitrator. However, the Arbitrator refused to consider it because it was not timely raised in accordance with agreed-upon procedures.
In resolving the Agency's arbitrability claim on the merits, the majority ignores the fact that the argument was not timely raised below. The majority also ignores the foregoing Authority precedent barring consideration of arbitrability claims that are not timely raised to the Authority. Simple logic dictates that the Authority's denial of claims that were not timely raised to the Authority should extend to denial of claims that were not timely raised to the arbitrator. Put differently, there is no reason for the Authority to enforce its own timeliness requirements while disregarding the parties' contractual requirements.
In this case, the Agency does not dispute that it failed to timely raise its claim. Moreover, although the Agency also does not contest the enforceability of the contractual requirement that it timely raise such claims, the majority invalidates that requirement. Accordingly, I would deny the Agency's arbitrability exception.
I also would find that the award is not contrary to 5 U.S.C. § 8339(m) and 5 C.F.R. § 846.304(b)(3). Section 8339(m) provides that, in computing the annuity of an employee who retires, "the total service of [the] employee" includes "the days of unused sick leave to his credit under a formal leave system[.]" Section 846.304(b)(3) provides that "[s]ick leave creditable . . . is equal to the number of days of unused sick leave to an individual's credit as of the day of retirement, . . . or as of the effective date of the election of FERS coverage, whichever is the lesser amount of sick leave[.]" Neither provision indicates that an employee who has converted from CSRS to FERS is precluded from cashing in his or her sick leave prior to retirement, and then having the remaining amount of sick leave (to include "zero") applied to determine the annuity.
Finally, I would reject the Agency's claim that the award is inconsistent with the parties' agreement. Although the Agency argues that Article 25 was not intended to permit the grievant to cash in sick leave accumulated during hid CSRS employment the Arbitrator reached the exact, opposite conclusion. The Agency provides no basis for finding that the Arbitrator's interpretation of Article 25 is irrational, unfounded, implausible, or in manifest disregard of the parties' agreement. Thus, the Agency does not demonstrate that the award fails to draw its essence from the parties' agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990).
For the foregoing reasons, I would deny the Agency's exceptions.
Footnote # 1 for 59 FLRA No. 103 - Authority's Decision
Member Pope's dissenting opinion is set forth after this decision.
Footnote # 2 for 59 FLRA No. 103 - Authority's Decision
The parties signed a memorandum of understanding regarding the neutral evaluator step, intended to attempt to informally resolve grievances prior to arbitration. Section (j) of the memorandum provides in relevant part:
(j) Threshold Issue(s). Questions as to whether or not a grievance is on a matter subject to the parties' grievance procedure or is subject to arbitration shall be submitted to the evaluator for an opinion. If the parties cannot agree with the evaluator's opinion on the threshold issue(s), the matter may be submitted to binding arbitration in accordance with the parties['] Collective Bargaining Agreement and will be excluded from the neutral evaluation conference procedure. Threshold issues not presented at the neutral evaluation conference may not be raised in the binding arbitration hearing.
Award at 16.
Footnote # 3 for 59 FLRA No. 103 - Authority's Decision
See also United States Dep't of Commerce, Patent & Trademark Office, 52 FLRA 358, 367 (1996); United States Dep't of the Air Force, Lowry Air Force Base, Denver, Colo., 48 FLRA 589, 593 (1993) (discussing Supreme Court's articulation of deferential standard of review of arbitration awards in United Paperworkers v. Misco, Inc., 484 U.S. 29 (1987)).
Footnote # 4 for 59 FLRA No. 103 - Authority's Decision
(c) The preceding subsections of this section shall not apply with respect to any grievance concerning--
. . . .
(2) retirement, life insurance, or health insurance[.]
Footnote # 5 for 59 FLRA No. 103 - Authority's Decision
Footnote # 6 for 59 FLRA No. 103 - Authority's Decision
We note the Union's reliance on Muniz. In Muniz, the Federal Circuit held that under § 7121(c)(2), Congress "did not exclude from the grievance and arbitration process those disputes over an individual's entitlement to particular [fringe] benefits enacted by Congress[,]" including retirement. Muniz, 972 F.2d at 1313. In so holding, the court relied on a statement in a House Report and a remark by Congressman Udall. Id.
We respectfully disagree with the court's view that § 7121(c)(2) does not exclude grievances over an individual's entitlement to retirement benefits. As the Authority has repeatedly stated, the task of resolving a dispute over the meaning of a statutory provision "begins where all such inquiries must begin: with the language of the statute itself." See, e.g., NATCA, 51 FLRA at 207 (quoting United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989)). In this regard, the Authority has emphasized that § 7121(c)(2) "excludes `any' grievance concerning retirement." Id. Moreover, the legislative history cited by the court addressed the scope of bargaining under the proposed legislation that became the Statute, not the statutorily permissible scope of the negotiated grievance procedure. Accordingly, we find no indication in the legislative history that rebuts the strong presumption that the plain language of § 7121(c)(2), excluding from the permissible scope of the negotiated grievance procedure "any grievance concerning . . . retirement," expresses Congressional intent. Id. (citing Ardestani v. INS, 502 U.S. 129, 135-36 (1991)).
Footnote # 7 for 59 FLRA No. 103 - Authority's Decision
Although not raised by the Union, we also find that the Agency's § 7121(c)(2) argument is not barred from our consideration by § 2429.5 of the Authority's Regulations, which states, in relevant part, that the Authority will not consider any issue "which was not presented in the proceedings before the . . . arbitrator." As is evident from the award and was acknowledged