United States, Department of the Treasury, Internal Revenue Service, Large and Mid-Size Business Division, Omaha, Nebraska (Agency) and National Treasury Employees Union, Chapter 3 (Union)
[ v60 p742 ]
60 FLRA No. 141
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
LARGE AND MID-SIZE BUSINESS DIVISION
March 17, 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 John C. Fletcher 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 Agency violated the parties' agreement by not affording the grievant proper priority consideration. To remedy the violation, the Arbitrator awarded the grievant a promotion to the next GS-14 position with backpay. For the following reasons, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
The grievant, a GS-13 Internal Revenue Agent, applied for a GS-14 Senior Team Coordinator position, for which he was placed on the "`Best Qualified' list[.]" Award at 4. The grievant was not selected for the position because he lacked recent Team Coordinator experience. A grievance was filed over the non-selection and ultimately settled with the Agency agreeing, as relevant here, to give the grievant priority consideration. Subsequently, the grievant exercised his priority consideration for another GS-14 Senior Team Coordinator position within the Agency and, again, was not selected because he lacked recent Team Coordinator experience. A grievance filed over that non-selection was unresolved and was submitted to arbitration on the following issues, as framed by the Arbitrator:
Did the Agency fail to accord [the g]rievant bona fide [p]riority [c]onsideration for the GS-14 Senior Team Coordinator position . . . and so violate Article 13, Section 11 of the [a]greement?
If so, what shall be the remedy?
Id. at 14. [n2]
Interpreting Article 13, § 11 of the parties' agreement, the Arbitrator explained that priority consideration is remedial and that it gives preference to an employee, without competition. Moreover, the Arbitrator interpreted the provision as requiring the Agency either to select an employee exercising priority consideration who meets the minimum standards that management has set for adequate performance of the job, or to show that the employee has "demonstrable job related inadequacies which would justify a `reasoning mind' to pass him over." Id. at 30. According to the Arbitrator, the selecting official either "forgot" or "never fully appreciated" the remedial nature of the grievant's priority consideration, because he never viewed the grievant's application as "preferred" or "esteemed above another." Id. at 27-28. Moreover, the Arbitrator found that the selecting official improperly relied on the grievant's [ v60 p743 ] "lack of recent experience" in not selecting the grievant for the position. Id. at 28.
The Arbitrator determined that the grievant was qualified for the position and that he was not selected based on a selective placement factor -- the requirement for recent Team Coordinator experience -- that was not included on the vacancy announcement. According to the Arbitrator, if this factor was so critical, then "it should have been announced as such." Id. at 29. The Arbitrator found that "`but for' the Agency's improper action, [the g]rievant would have been promoted" to the Senior Team Coordinator position. Id. at 31. Explaining that he was "follow[ing] established precedent with respect to an appropriate remedy[,]" the Arbitrator ordered that the grievant "shall be promoted to the next open GS-14 Senior Team Coordinator position," and he directed the Agency "to begin paying [the g]rievant at the appropriate GS-14 level of pay retroactive to the date the successful competitive applicant assumed the position . . . ." Id. at 31-32.
III. Positions of the Parties
A. Agency's Exceptions
The Agency makes three claims that the award is contrary to law. First, the Agency asserts that the award violates its right to make selections under § 7106(a)(2)(C) of the Statute. See Exceptions at 3 (citing United States Dep't of the Treasury, Bureau of Engraving and Printing, Wash., D.C., 53 FLRA 146, 151-53 (1997) (BEP)). In this regard, the Agency asserts that the award affects its right to select because it requires the Agency to promote the grievant.
The Agency also asserts that the award does not satisfy prong I of the BEP test because Article 13, § 11 of the parties' agreement does not constitute a negotiable procedure or an appropriate arrangement. Id. Specifically, the Agency argues that the award does not enforce a negotiable procedure because the Arbitrator enforced Article 13, § 11 in a manner that "prohibits the Agency from expanding the area of consideration for any future Senior Team Coordinator position or from soliciting from any source other than the [g]rievant." Id. at 3-4. The Agency argues that the award does not enforce an appropriate arrangement because it excessively interferes with management's right to make selections. See id. at 4. In this connection, the Agency asserts that the award "prevent[s] it from selecting a candidate from any source other than the [g]rievant" when filling the Senior Team coordinator vacancy. Id. According to the Agency, this burden outweighs any possible benefit to employees.
In addition, the Agency asserts that the award does not satisfy prong II of the BEP test because the Arbitrator "substituted his judgment for that of the Agency as [to] what is required in [the Senior Team Coordinator] position." Id. at 5. In this regard, the Agency claims the award precludes it from selecting the best candidate to accomplish its mission. As such, the Agency asserts that the award does not demonstrate "how placing the [g]rievant in the next open position properly reconstructs what management would have done." Id.
Next, the Agency claims that the award violates the Back Pay Act, 5 C.F.R. 335.103(c), and the United States Supreme Court decision in United States v. Testan, 424 U.S. 392 (1976) because, according to the Agency, the Arbitrator directed the Agency to "begin paying the [g]rievant" at the GS-14 rate "while he performs the duties of a GS-13 . . . ." Exceptions at 5. The Agency claims that, under the foregoing authorities, the grievant "can not be paid at the GS 14 rate if he is not performing duties properly classified as GS 14 duties." Id. at 6 (citing United States v. Testan).
Finally, the Agency asserts that the award, in effect, gives the grievant a temporary promotion to a GS-14 position and, according to the Agency, this temporary promotion should be limited to 120 days, consistent with 5 C.F.R. § 335.103(c) and the Authority's decision in United States Dep't of Veterans Affairs, Ralph H. Johnson Med. Ctr., Charleston, S.C., 60 FLRA 46 (2004) (VA Medical Center).
B. Union's Opposition
The Union claims that the award does not affect management's right to make selections under § 7106(a)(2)(C) of the Statute because the Agency is "free to select from any appropriate source . . . ." Opposition at 7. Further, the Union claims that the award enforces an appropriate arrangement and, therefore, satisfies prong I of the BEP test. See id. at 9. In this regard, the Union asserts that the award does not excessively interfere with the Agency's right to make selections because it leaves intact the Agency's ability to determine the qualifications necessary for the position, as well as its rights to not select an unqualified candidate and to not fill the position. According to the Union, the award also satisfies prong II of the BEP test because it reflects "what the Agency would have done had [it] not violated Article 13, [§] 11" of the parties' agreement. Id. at 10-11.
Finally, the Union disputes the Agency's claim that the award violates the Back Pay Act, noting that the Arbitrator found that the Agency's violation of the parties' [ v60 p744 ] collective bargaining agreement resulted in a loss of pay to the grievant. Also, according to the Union, the Agency's arguments under 5 C.F.R. § 335.103(c), United States v. Testan, and VA Medical Center are without merit because these authorities are inapplicable.
IV. Analysis and Conclusions
A. Standard of Review
The Agency's exceptions challenge the award's consistency with law. We review the questions of law raised in the Agency's exceptions and the 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)). In applying the standard of de novo review, the Authority assesses whether the arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
B. The Award Does Not Violate the Agency's Right To Make Selections Under 5 U.S.C. § 7106(a)(2)(C)
In resolving whether an arbitrator's award violates management's rights under § 7106 of the Statute, the Authority applies the framework established in BEP. Upon finding that an award affects a management right under § 7106(a), the Authority applies a two-prong test to determine if the award is deficient. Under prong I, the Authority examines whether the award provides a remedy for a violation of either applicable law, within the meaning of § 7106(a)(2) of the Statute, or a contract provision that was negotiated pursuant to § 7106(b) of the Statute. Under prong II, the Authority considers whether the arbitrator's remedy reflects a reconstruction of what management would have done had it not violated the law or contractual provision at issue. See BEP, 53 FLRA at 151-154.
Under Authority precedent, an award requiring an agency to make a selection for an appointment affects management's right to make selections under § 7106(a)(2)(C) of the Statute. See, e.g., Soc. Sec. Admin., Woodlawn, Md., 54 FLRA 1570, 1577 (1998) (SSA, Woodlawn). Because the Arbitrator ordered the Agency to select the grievant for the next appropriate GS-14 Senior Team Coordinator position, we agree with the Agency that the award affects its right to make selections under § 7106(a)(2)(C) of the Statute.
However, we do not agree with the Agency that the award fails prong I of the Authority's BEP test. In particular, we disagree that the award excessively interferes with the Agency's right to make selections from any appropriate source. In this regard, there is no dispute that the award ordering selection of the grievant for the next available position enforces Article 13, § 11 of the parties' negotiated agreement. The Arbitrator interpreted that provision as requiring selection of a priority consideration candidate who meets the minimum standards that management has set for adequate performance of the job. Under Authority precedent, an arbitrator's interpretation of a priority consideration provision as requiring an agency to select a candidate who meets the minimum standards for a job does not excessively interfere with management's right to make selections. See United States Dep't of Health and Human Serv., Centers for Medicare and Medicaid Serv., 60 FLRA 437 (2004) (Member Pope dissenting as to other matters). In fact, the Authority specifically stated that "[w]here an award requiring the selection of a grievant with priority consideration is challenged, the Authority has consistently held that `contractual provisions affording such consideration constitute appropriate arrangements under § 7106(b)(3) of the Statute.'" See id., 60 FLRA at 441 (citing United States Dep't of the Navy, Naval Weapons Station, Yorktown, Va., 57 FLRA 917, 921 (2002)); see also United States Dep't of Labor, Wash., D.C., 59 FLRA 560, 562 (2004) (DOL). Consequently, the award satisfies prong I of the BEP test.
We further find that the award satisfies prong II of the BEP test. In this regard, the Arbitrator specifically found that "but for" the Agency's violation of Article 13, § 11 of the parties' agreement, the grievant "would have been promoted" to the position for which he applied, but was not selected. Award at 31. Accordingly, the award ordering the Agency to select the grievant for the next appropriate position properly reconstructs what the Agency would have done had it not violated the parties' agreement. See SSA, Branch Office, East Liverpool, Ohio, 54 FLRA 142, 148 (1998) (finding award ordering agency to select grievant for next available position properly reconstructed what agency would have done absent violation of parties' priority consideration provision). [n3]
Based on the foregoing, we deny the Agency's exception. [ v60 p745 ]
C. The Award Does Not Violate the Back Pay Act
Under the Back Pay Act, an award of backpay is authorized where an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action directly resulted in the withdrawal or reduction of the grievant's pay, allowances, or differentials. See United States Dep't of Health and Human Services, 54 FLRA 1210, 1218 (1998). The Authority has found that awards ordering retroactive promotions with backpay satisfy the requirements of the Back Pay Act where an arbitrator finds that the grievant would have been promoted but for the agency's violation of the grievant's priority consideration rights under a collective bargaining agreement. See, e.g., DOL, 59 FLRA at 563. Because the Arbitrator expressly found that "but for" the Agency's violation of Article 13, § 11 of the parties' agreement, the grievant "would have been promoted[,]" we find that the award satisfies the two prongs of the Back Pay Act. Award at 31.
The Agency's claim to the contrary is based on the Arbitrator's order that the Agency "begin paying [the g]rievant at the appropriate GS-14 level . . . ." Id. at 31-32. In this connection, the Agency interprets the award as requiring payment to the grievant before he is promoted to the GS-14 position. However, the Agency's interpretation ignores the Arbitrator's specific statement of intention to "follow established precedent" in fashioning a remedy. Id. at 31. In this regard, the award is similar to the award in SSA, Chicago Region, Cleveland Ohio Dist. Office, University Circle Branch, 56 FLRA 1084, 1090 (2001) (SSA, Chicago Region), where an arbitrator awarded backpay "beginning on the date the person selected . . . entered the job . . . and ending when [the g]rievant enters the appropriate vacancy." Id. There, because the arbitrator ordered that the grievant be made whole "to the extent allowed by law" and "subject to" the Back Pay Act, the Authority interpreted the award, consistent with the Back Pay Act, as requiring payment to the grievant only after the promotion was effectuated. Id.
Although the Arbitrator in this case did not specifically refer to the Back Pay Act, there is no question that, pursuant to the "established precedent" acknowledged by the Arbitrator, Award at 31, the Back Pay Act is the applicable law that governs the award. Therefore, consistent with the Arbitrator's specific intent, we interpret the award as entitling the grievant to backpay only after the promotion is effectuated. See id. 56 FLRA at 1090 (citing SSA, Mid-Atlantic Program Serv. Ctr., 53 FLRA 956, 965-66 (1997)); see also United States Dep't of Health and Human Serv., Soc. Sec. Admin., Kansas City, Mo., 37 FLRA 816, 825-26 (1990) (construing award of backpay consistent with the Back Pay Act). So interpreted, we find that the award does not violate the Back Pay Act.
In view of this conclusion, we necessarily reject the Agency's argument based on United States v. Testan. In that decision, the Court held that the Back Pay Act authorizes "retroactive recovery of wages" and that a federal employee is "entitled to receive only the salary of the position to which he was appointed . . . ." 424 U.S. at 405-06. However, as construed above, the award does not require the grievant to be paid for a position that he does not occupy. See, e.g., Serv. Employees Int'l Union, Local 200, 10 FLRA 49 (1982) (retroactive promotion with backpay not authorized under United States v. Testan for period before position was actually classified). Rather, the award requires retroactive backpay when the promotion is effectuated, consistent with the Back Pay Act. Accordingly, we deny the Agency's exception.
D. The Award Does Not Violate 5 C.F.R. § 335.103(C)
Citing VA Medical Center, the Agency claims that the award conflicts with 5 C.F.R. § 335.103(c), which provides, in relevant part, that competitive procedures apply to "[t]ime-limited promotions under § 335.102(f) of this part for more than 120 days to higher graded positions" and to "[d]etails for more than 120 days to a higher grade position or to a position with higher promotion potential . . . ." See also VA Medical Center, 60 FLRA at 49. However, the Arbitrator ordered a permanent, not temporary, promotion to the next appropriate GS-14 Senior Team Coordinator position. Therefore, § 335.103(c) is inapplicable. Moreover, § 335.103(c)(3)(vi) expressly gives agencies discretion to promote an employee non-competitively if the employee previously was "not given proper consideration in a competitive promotion action." Consequently, the Agency has not shown that the award conflicts with 5 C.F.R. § 335.103(c), and we deny the Agency's exception.
The Agency's exceptions are denied. [ v60 p746 ]
Concurring opinion of Chairman Cabaniss:
I write separately to explain an aspect of priority consideration provisions that affects this case, and why the Arbitrator's interpretation of the priority consideration provision here does not run afoul of the Agency's rights to assign work and employees.
Here the Arbitrator interpreted the parties' priority consideration provision to mean that the Agency "was required to promote grievant once it had determined that he was `minimally' or `adequately' qualified, or establish that he had demonstrable job related inadequacies which would justify a reasoning mind to pass him over." Award at 30 (emphasis in original). Thus, selection was not automatic whenever one exercised his or her priority consideration right, even if the individual met the minimum qualifications of the position, provided that the Agency could show that it had a legitimate reason to justify the non-selection.
As relevant here, an agency's right under § 7106(a)(2)(C) to make selections includes the right to determine the qualifications, skills and abilities needed to perform the work of a position. AFGE, Local 1345, 48 FLRA 168, 195 (1993). This right extends beyond just determining basic qualifications, and includes the right "to determine whether any qualifications, in addition to basic qualification requirements such as those set forth in the [United States Office of Personnel Management] X-118 standards, are necessary to accomplish the work of a position." NFFE, Local 1450, 23 FLRA 3, 5 (1986).
In the present matter, the Arbitrator's interpretation of the parties' priority consideration provision is expressly consistent with the Agency's right under § 7106(a)(2)(C) to determine not only the minimum qualifications of a position, but also those other qualifications which, if not possessed by an employee, would establish that the employee has a job-related inadequacy which the Arbitrator noted would justify not selecting the employee. Consequently, the priority consideration provision does not impermissibly conflict with the Agency's right to make selections.
I also note that the job-related qualifications for a position can also include job-related individual characteristics such as judgment and reliability. Although discussion of such characteristics usually occurs in the context of an agency's rights to assign work or assign employees, the rights under § 7106(a)(2)(A) and (C) mirror each other in this regard. For example, the Authority has noted that, in terms of § 7106(a)(2)(A), an agency "may require more than the `minimum qualifications' for the position that are established by the Office of Personnel Management (OPM)." AFGE, Local 1138, Council 214, 51 FLRA 1725, 1728 (1996). Further, "an agency may also require employees to possess additional specific knowledge, skills, and abilities needed to do the work of the position, . . . and certain necessary job-related individual characteristics such as judgment and reliability[.]" Id. at 1728-30. Consequently, an agency's right to consider job-related individual characteristics in identifying qualifications, skills, and abilities under § 7106(a)(2)(C) would seem to be no different than an agency's right to identify those same job-related qualifications, skills, and abilities under § 7106(a)(2)(A).
Accordingly, where (as here) an arbitrator's interpretation of a priority consideration provision reflects an agency's right to determine the knowledge, skills, and abilities necessary for an individual to be selected for a position (to include the ability to consider those other qualifications which extend beyond the position's minimum qualifications), there is no impermissible conflict with an agency's right to make selections under § 7106(a)(2)(C).
Footnote # 1 for 60 FLRA No. 141 - Authority's Decision
Footnote # 2 for 60 FLRA No. 141 - Authority's Decision
Section 11 - Priority Consideration
. . . .
Priority consideration consists of a promotion certificate which contains an employee's name alone being sent to a selecting official before the official considers other applicants for a position.
. . . .
If the appropriate vacancy has already been announced, the employees due the priority consideration will be considered by the selecting official before other applicants are ranked or referred for selection.
When the Employer