National Treasury Employees Union, Chapter 207 (Union) and Federal Deposit Insurance Corporation (Agency)
[ v60 p731 ]
60 FLRA No. 139
March 14, 2005
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 Ezra S. Krendel filed by the Union under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exceptions.
The Arbitrator denied a grievance alleging that the Agency violated the parties' agreement by not reassigning the grievant to either of two different vacant positions.
For the reasons that follow, we find that the award is deficient and set it aside. We also issue an appropriate remedy.
II. Background and Arbitrator's Award
The grievant occupied a position at the grade 15 level. The Agency informed him that his position was designated as "surplus" because it was scheduled to be abolished. Award at 3-4.
For employees like the grievant whose positions are designated surplus, the parties have a negotiated agreement called the "Procedures for the Reassignment of Employees in Designated Surplus Positions" (Surplus Procedures Agreement). The agreement sets forth "procedures that will be used [Agency]-wide to fill vacant positions at the [grade 15] and below level." Joint Exhibit 2 at 1. Section 2(b) of the agreement provides, in relevant part, as follows:
The division/office administrative officer will obtain from PSB/Washington [Personnel Services Branch] a determination on whether each EOI [Expression of Interest] applicant meets the basic qualifications for the position.
- If only one applicant meets the basic qualifications, that employee will be reassigned to the vacant position.
- If more than one applicant meets the basic qualifications, the selecting official will determine the best qualified applicant, based upon the information submitted by each employee in response to the EOI . . . .
Joint Exhibit 2 at 2; see also Award at 3. [n2]
As relevant here, the grievant applied for a reassignment to two different vacant positions. He applied "voluntarily" for the position of Senior Policy Analyst (Compliance) in the Division of Supervision Consumer Affairs and the Agency referred him "involuntarily" as an applicant for the position of Senior Policy Analyst. Id. at 4.
By separate e-mails, the PSB informed the grievant that he was qualified for the vacant positions, as follows:
You were found to be qualified for the above- stated position, and have been referred to the selecting official for further consideration along with other qualified candidates.
Id. Although the e-mails indicated that other qualified candidates were also referred to the selecting official, it is undisputed that the grievant was the only applicant who was found to be qualified by the PSB and referred to the selecting officials for the vacant positions.
After the PSB forwarded the grievant's application to the selecting officials designated for each of the vacant positions, the selecting officials decided not to [ v60 p732 ] select the grievant on the ground that he was not qualified for either position. [n3] Subsequently, the Agency filled the vacant positions through merit promotion procedures.
The grievant filed a grievance over his non-selection, alleging that the Agency's conduct violated § 2(b) of the Surplus Procedures Agreement. When the grievance was not resolved, it was submitted to arbitration on the following stipulated issue:
Did the Agency violate the Procedures for the Reassignment of Employees in Designated Surplus Positions and, if so what is the remedy?
Award at 2.
The Union maintained before the Arbitrator that the Surplus Procedures Agreement required the Agency to reassign the grievant because the PSB determined that the grievant was the only qualified applicant. The Union argued that the Agency's refusal to reassign the grievant was a "clear and patent bre[a]ch" of § 2(b). Id. at 5. As a remedy, the Union requested, among other things, that the Arbitrator direct the Agency to reassign the grievant into the next available grade 15 level position for which he is qualified.
The Agency argued before the Arbitrator that it had the right to determine whether the grievant satisfied the qualifications necessary to perform the duties of the vacant positions, under § 7106(a) of the Statute, and that the selecting officials found that the grievant did not satisfy the "minimum qualifications" and/or the quality ranking factors for the vacant positions. Id. at 8. The Agency also argued that if the Arbitrator were to find a violation, "the only available remedy is to direct a reconstruction of the selection process or reconsideration of [the grievant's] application." Exceptions, Attachment C (Agency's Post-Hearing Brief) at 22.
The Arbitrator found that, as to both applications, the grievant was the "only candidate qualified by PSB." Award at 4. The Arbitrator further determined that § 2(b) of the Surplus Procedures Agreement provides a two-step selection process for the Agency to determine the qualifications of an applicant for reassignment. The Arbitrator found that, "as the first step in a two-step selection process[,]" the grievant submitted his applications to the PSB and the PSB conducted a "cursory assessment" of the grievant's qualifications for reassignment to the vacant positions. Id. at 9. The Arbitrator stated that the "cursory assessment by PSB determined that [the grievant] was basically qualified" to be reassigned. Id.
The Arbitrator further found that, "as the second step" of the selection process, the PSB forwarded the grievant's applications to the selecting official designated for each of the vacant positions for further assessment of the grievant's qualifications for reassignment. Id. The Arbitrator noted other instances in which selecting officials had not agreed with the PSB's "findings of `qualified,'" and that, here, the selecting officials found that the grievant was not qualified. Id. at 9-10.
The Arbitrator went on to state that if a candidate were "reassigned to a manager who found PSB's `basic qualification' ranking inaccurate for the position at hand, as the . . . grievance would have it, the situation would be in violation of 5 U.S.C. § 7106(a)(2)(A)(B)(C) . . . ." Id. at 10.
III. Positions of the Parties
A. Union's Exceptions
The Union contends that the award fails to draw its essence from the collective bargaining agreement and is contrary to law.
Specifically, the Union contends that the award fails to draw its essence from the agreement because the Arbitrator's finding "that management officials could disqualify applicants who had been previously qualified by the [PSB]" cannot be derived from the wording of § 2(b) of the Surplus Procedures Agreement. Exceptions at 2, 9. The Union argues that § 2(b), by its wording, authorizes only the PSB to determine the basic qualifications of an applicant. See id. at 8-9. Therefore, the Union maintains that the Arbitrator's finding that a selecting official has the authority to disqualify an applicant that the PSB has found to be qualified cannot be derived from the wording of that agreement. See id. at 9.
Further, the Union challenges the Arbitrator's statement that it would be a violation of § 7106(a) of the Statute to require "the selecting official to take the only applicant qualified by PSB[.]" See id. at 5. The Union claims that § 2(b) of the Surplus Procedures Agreement requires the Agency to reassign an employee to fill a position whenever the PSB determines that only that employee is qualified. See id. at 6. The Union argues that § 2(b) of the Surplus Procedures Agreement was negotiated, under § 7106(b)(3) of the Statute, as an appropriate arrangement and, thus, concerns a matter that is an exception to management rights under [ v60 p733 ] § 7106(a). As such, it argues that the award is contrary to law.
The Union requests that the Authority sustain the grievance and direct the Agency to reassign the grievant to the next vacant position at grade 15 that he is qualified to fill. See id. at 10.
B. Agency's Opposition
The Agency disputes the Union's contention that the award fails to draw its essence from the agreement. The Agency argues that the Arbitrator determined that § 2(b) of the Surplus Procedures Agreement provides a two-step selection process for the Agency to determine the qualifications of an applicant to be reassigned to a vacant position. See Opposition at 8. The Agency asserts that the Arbitrator "implicitly" found that the contractual provision "afford[s] management the right to further review applicants after an initial cursory assessment by PSB." See id. The Agency adds that "the Arbitrator's findings are consistent with both established practice and the parties' intent." Id. Thus, the Agency maintains that the Union has failed to demonstrate that the Arbitrator's interpretation of the agreement cannot be derived from the agreement.
The Agency also contends that the Arbitrator correctly determined that the Union's interpretation of § 2(b) of the Surplus Procedures Agreement would violate § 7106(a) of the Statute. See id. at 5. The Agency claims that the Arbitrator found that a determination by PSB "that a candidate passed a basic screening does not equate to an absolute entitlement to selection." Opposition at 5. In this regard, the Agency explains that the Arbitrator found that "managers further assess the qualifications of a candidate after initial screening by the personnel office." Id. The Agency maintains that "[t]he Arbitrator's finding is consistent with substantial record evidence introduced at the hearing that this was a long-standing practice." Id.
The Agency also states that it does not dispute that, if only one applicant is found by management to be qualified, then the employee is required to be reassigned to the vacant position under the Surplus Procedures Agreement. Rather, the Agency asserts that, since the grievant did not meet the qualifications for either of the vacant positions, it was not required to reassign him to either of those positions. See id. at 6.
IV. Analysis and Conclusions
The Union contends that the award fails to draw its essence from § 2(b) of the Surplus Procedures Agreement. In order for an award to be found deficient on this ground, it must be established 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. United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990).
Section 2 of the Surplus Procedures Agreement describes the process that is used when a division or office decides to fill an authorized vacancy. As relevant here, the division or office issues an "Expression of Interest" (EOI) to employees in surplus positions. The division or office also identifies the selective placement and quality ranking factors for the vacant position, which must be reviewed and approved by the Agency's PSB. Employees may then submit applications addressing those factors.
Section 2(b) of the agreement states that "[t]he division/office administrative officer will obtain from PSB/Washington a determination on whether each EOI applicant meets the basic qualifications for the position." Joint Exhibit 2 at 2; Award at 3. Significantly, § 2(b) then describes two different situations: instances when there is only one qualified applicant and instances when there are two or more qualified applicants for a vacant position. "If only one applicant meets the basic qualifications, that employee will be reassigned to the vacant position." Id. On the other hand, "[i]f more than one applicant meets the basic qualifications, the selecting official will determine the best qualified applicant . . . ." Id.
Clearly, in circumstances where an employee is the only applicant found qualified by the PSB for a vacant position, the language of § 2(b) requires the Agency to reassign the employee to that vacant position. The Arbitrator's interpretation of § 2(b) of the agreement, which reaches a different result, does not represent a plausible interpretation of its plain wording in situations when only one applicant is found qualified by the PSB. In particular, there is nothing in the agreement that provides, explicitly or implicitly, a two-step process when, as here, there is only one applicant whom the [ v60 p734 ] Agency's PSB has determined to be qualified. Rather, such a procedure is contemplated by § 2(b) only when there is more than one qualified applicant, in which case the selecting official "will determine the best qualified applicant[.]"
Accordingly, we find that the award evidences a manifest disregard of the parties' agreement and that the award is deficient under § 7122(a)(2) of the Statute because it fails to draw its essence from the parties' agreement. See United States Dep't of Justice, Federal Bureau of Prisons, Metropolitan Detention Center, Guaynabo, P.R., 58 FLRA 553, 554 (2003); United States Small Business Admin., 55 FLRA 179, 182 (1999); United States Dep't of Justice, Federal Bureau of Prisons, United States Penitentiary, Leavenworth, Kan., 53 FLRA 29, 33 (1997); United States Dep't of the Air Force, Oklahoma City Air Logistics Command, Tinker AFB, Okla., 48 FLRA 342, 348-49 (1993).
B. Past Practice
The Agency claims that the Arbitrator's finding that managers further assess the qualifications of a candidate after initial screening by the personnel office "is consistent with substantial record evidence introduced at the hearing showing that this was a long standing practice." Opposition at 5. In this respect, it is well established that the terms of a collective bargaining agreement may be modified by the past practice of the parties or otherwise amended by the parties. [n4] See, e.g., United States Dep't of the Navy, Naval Avionics Ctr., Indianapolis, Ind., 36 FLRA 567, 570 (1990) (past practice established condition of employment that differed from negotiated agreement). See also AFGE, Local 2128, 58 FLRA 519, 524 (2003) (AFGE) (agency's policies that were incorporated in collective bargaining agreement were modified by practice).
In order to establish the existence of a past practice, there must be a showing that the practice has been consistently exercised over a significant period of time and followed by both parties, or followed by one party and not challenged by the other. See United States Dep't of Justice, Executive Office for Immigration Review, Bd. of Immigration Appeals, 55 FLRA 454, 456 (1999) (Member Wasserman concurring; then-Member Cabaniss dissenting on other grounds). Evidence that an agreement provision has been amended may be established by the parties' intent. See Frank Elkouri & Edna Asper Elkouri, How Arbitration Works 653 (5th ed. 1997) at 653 (citation omitted) ("[A]n arbitrator's award that appears contrary to the express terms of the agreement may nevertheless be valid if it is premised upon reliable evidence of the parties' intent.").
The Authority also has recognized that an arbitrator may appropriately determine whether a past practice has modified the terms of a collective bargaining agreement. Review of such a determination is a matter of contract interpretation that is subject to the deferential essence standard. See Prof'l Airways Systems Specialists Dist. No. 1, MEBA/NMU (AFL-CIO), 48 FLRA 764, 767 (1993).
In this case, the Arbitrator found that there were other instances in which, as here, selecting officials had not agreed with the PSB's "findings of `qualified[.]'" Award at 9. The Arbitrator's finding could be read as a conclusion that there was an established past practice or amendment of the agreement, under which the Agency used a two-step selection process, even in situations where there is only one applicant whom the PSB has determined to be qualified, and that under such a two-step process a selecting official had the ability to determine whether an applicant is qualified for a particular position. However, record evidence does not support such a conclusion.
The Arbitrator cited two separate placement actions. The first action involved employee B; the second action involved employees K and G. [n5] According to the Arbitrator, employee B was rejected for a position to which he had been "referred for consideration" because the selecting officials determined that he did not possess the necessary skills. Award at 9. As to employees K and G, who had been referred "after their first step review indicated that they were minimally qualified for the positions[,]" the Arbitrator found that they were rejected "by the selection official because neither candidate possessed sufficient qualifications to assume the full duties of the position within 90 days." Id.
Starting first with employees K and G, the record shows that they were considered for positions sometime after October, 2003, and subsequently not selected in December, 2003. See Exceptions, Attachment (Agency Ex. 4). These actions occurred well after the grievant's March, 2003 non-selection and, as such, may not be used as a basis to support a finding of a past practice. [n6] [ v60 p735 ] Moreover, we note that the memorandum advising the Agency's Human Resources Branch of the non-selection of employees K and G refers to several employees as having been referred for the positions. Given multiple applicants, it is not at all clear that section 2(b) of the agreement even applies since that section operates "[i]f only one applicant meets the basic qualifications[.]" [n7]
As for employee B, the record shows that he was interviewed for a position on March 14, 2003, and was not selected on March 17, 2003. See Exceptions, Attachment (Agency Exs. 3, 3a). Thus, employee B's non-selection occurred just prior to the grievant's non-selection. However, the record contains no evidence that employee B was the only applicant who met the basic qualifications for the position for which he was referred. In any event, even if that were the case and the Agency's conduct with respect to employee B was the same as that with respect to the grievant, we would find that one instance, occurring contemporaneously with the grievant's non-selection, would not demonstrate a past practice that had been consistently exercised over a significant period of time.
In sum, we find the record insufficient to establish that the non-selection of the grievant was based on a past practice that modified the terms of the parties' agreement.
C. Management Rights
The Union excepts to the Arbitrator's statement that it "would be [a] violation of 5 U.S.C. § 7106(a)(2)(A)(B)(C)" to reassign an applicant if a selecting official found the PSB's "basic qualification ranking inaccurate" for a vacant position. Award at 10. We view this statement by the Arbitrator as dictum and not a basis for his award, since he had already denied the grievance based on his interpretation of the Surplus Procedures Agreement.
Nonetheless, we note that, consistent with § 7106(b)(3) of the Statute, provisions that seek to ameliorate the adverse effects of an agency's decision to reduce its workforce have been found to be negotiable as appropriate arrangements. See NAGE, Local R1-203, 55 FLRA 1081, 1093 (1999) (NAGE); Int'l Fed'n of Prof'l & Technical Eng'rs, 51 FLRA 451, 453-55 (1995) (Member Armendariz concurring); NFFE, Forest Serv. Council, 46 FLRA 145, 151-53 (1992). Such provisions clearly affected the exercise of various management rights, including the rights the Agency argued to the Arbitrator were affected in this case. However, the Authority found, on balance, that the benefits afforded employees by the provisions outweighed the intrusion on the exercise of management's rights. See NAGE, 55 FLRA at 1093-94.
Similarly, here, the Surplus Procedures Agreement was designed to ameliorate the adverse effects of the Agency's decision to remove employees from positions it had designated as surplus. As applied to the grievant, it was a properly tailored arrangement that did not excessively interfere with management's rights. See id.
The effect of the decision, setting aside the award, is to sustain the grievance. Thus, the issue of remedy must be addressed.
As noted previously, the Union requested that the Authority direct the Agency to reassign the grievant to the next vacant position at grade 15 that he is qualified to fill. The Agency asserted, in its brief to the Arbitrator, that "the only available remedy is to direct a reconstruction of the selection process or reconsideration of [the grievant's] application." Exceptions, Attachment C at 22. The Agency claimed that the facts of this case cannot support a finding that the grievant would have been selected for either of the vacant positions citing prong II of United States Dep't of the Treasury, Bureau of Engraving & Printing, Wash., D.C., 53 FLRA 146 (1997) (under prong II, the Authority examines whether an arbitrator's remedy reflects a reconstruction of what management would have done if it had not violated the law or contractual provision at issue).
Contrary to the Agency's claim, and for the reasons set forth above, the record reflects that the grievant would have been selected for one of the positions for which he applied had the Agency complied with the parties' agreement. Accordingly, consistent with Authority precedent, we will direct the Agency to select the employee for the next available position for which he is qualified, as such a remedy constitutes a reconstruction of what the Agency would have done had it not violated the parties' agreement. See, e.g., United States Dep't of Health & Human Servs., Ctrs. for Medicare & Medicaid Servs., 60 FLRA 437 (2004) (Member Pope dissenting on other grounds) (award directing agency to place grievant who was minimally qualified into particular position was a proper reconstruction of what the agency would have done had it not violated the parties' agreement); United States Dep't of the Navy, Naval Weapons Station, Yorktown, Va., 57 FLRA 917, 921 (2002) (award directing agency to select a grievant to fill the next available vacancy constitutes a reconstruction).
The award is set aside. The Agency is directed to take action consistent with this decision. [ v60 p736 ]
Dissenting opinion of Chairman Cabaniss:
I write separately in dissent to explain why I would find that the Arbitrator relied on a past practice to properly reach the conclusions reached. The Arbitrator noted specifically that the grievant was the only employee whose name as a surplus employee was sent to two separate managers for possible selection under the Surplus Procedures Agreement (SPA). Award at 4. The Arbitrator was also aware that Paragraph 2(b) of the SPA mandated that where only one candidate met the basic qualifications of the position, that individual would be given the job and assigned to that vacant position. Id. at 5. The Arbitrator also knew that the two managers did not select the grievant for either position. Id.
In finding no violation of the SPA from the Agency's actions, the Arbitrator was aware of the fact that management/ selecting officials were overriding determinations by the Personnel Services Bureau (Personnel), pursuant to Paragraph 2(b) of the PSA, as to whether an employee met the basic qualifications for a position. Id. at 4. In explaining his determination, the Arbitrator noted that these managers did not agree with Personnel's finding that the grievant (and other employees found qualified by the Personnel Services Bureau) was qualified for these positions, but that those officials "could find that no candidate was qualified. Should only one candidate have been referred by PSB [the circumstances of the grievant in this case] and been disqualified by the managers their action[s] under the Labor Agreement would be to broaden the search." Id. at 9-10.
From these facts I conclude that the Arbitrator found no problem with the practice (which was at odds with the SPA) of letting selecting officials override an initial determination by Personnel as to whether employees met the basic qualifications of a position. More specifically, the Arbitrator found no problem with overriding the determination made by Personnel regarding the situation here, involving just the grievant (where only one name was sent forward by Personnel). As a result, I find no basis for parsing any distinction in this practice based upon whether there was more than one "qualified" candidate (as determined by Personnel) at issue. This practice, of letting selecting officials override qualifications determinations made by Personnel, has no apparent basis for being distinguished based upon the fact that only one "qualified" determination by Personnel is being overturned by a selecting official. And again, the Arbitrator spoke specifically to the practice of selecting officials specifically overriding Personnel's determination where only one "qualified" determination is at issue (the circumstances of this case).
I also would find a past practice to have been found by the Arbitrator. Where the practice is found to have been followed before the event in question as well as after the event in question, I would find the Arbitrator's conclusion of such a practice (which is a matter of contract interpretation) not so irrational, implausible, or unreasonable so as to not fall within the deference accorded arbitrators in matters of contract interpretation. See United States Dep't of Veterans Affairs, Medical and Regional Ctr., Togus, Me., 55 FLRA 1189, 1192-93 (1999).
Footnote # 1 for 60 FLRA No. 139 - Authority's Decision
Footnote # 2 for 60 FLRA No. 139 - Authority's Decision
The Arbitrator identified the Agency's personnel office as the "Personnel Services Bureau." Award at 3. The parties refer to the personnel office as the "Personnel Services Branch." Exceptions at 2; Opposition at 2. For purposes of consistency, the personnel office will be referred to herein as the Personnel Services Branch (PSB).
Footnote # 3 for 60 FLRA No. 139 - Authority's Decision
Footnote # 4 for 60 FLRA No. 139 - Authority's Decision