United States, Department of the Treasury, Internal Revenue Service, Washington, D.C. (Agency) and National Treasury Employees Union (Union)
[ v61 p226 ]
61 FLRA No. 41
OF THE TREASURY
INTERNAL REVENUE SERVICE
September 7, 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 Roger I. Abrams 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 law and the parties' agreement by implementing a policy that precludes job candidates from being included on a Best Qualified list if they fail to meet or exceed a particular rating score in connection with certain factors. Accordingly, he directed the Agency to rescind the policy, comply with the agreement, and grant affected employees priority consideration for future vacancies.
For the following reasons, we deny the exceptions.
II. Background and Arbitrator's Award
Under the parties' previous agreement, applicants for vacant positions who met minimum qualifications for the positions were rated and ranked by a panel based on various factors. Each panel also established a cut-off score, which varied from vacancy to vacancy, and included on a "Highly Qualified roster" individuals who met or exceeded the cut-off score. Award at 3. The four highest-ranked applicants on the Highly Qualified roster were then included on a Best Qualified list that was submitted to the selecting official.
Subsequently, the parties reached a new agreement that continued use of a rating and ranking panel but eliminated use of the cut-off score and the Highly Qualified roster. The new agreement stated, in Article 13, Section 5.D.1(f): "The four applicants who rank at the top will be designated as Best Qualified (BQ)." Id. at 4. When this provision was disapproved on Agency-head review, the parties revised it to provide: "In accordance with applicable laws, rules and regulations, the four applicants who rank at the top will be designated as Best Qualified (BQ)." Exceptions, Attachments, Jt. Ex. 1 at 47. The Agency head did not disapprove the revised provision.
Subsequently, the Agency unilaterally implemented a "Good Potential policy[,]" which established a cut-off score of 3.0 for prior performance and potential for performing. Award at 5. Under this policy, candidates who do not meet or exceed the cut-off score for both factors are excluded from the Best Qualified list even if they all rated and ranked among the top four candidates.
The Union filed a national grievance that was unresolved and was submitted to arbitration. The parties stipulated the following issues before the Arbitrator: "Did the Agency violate Article 13, Sections 3, 5 and 6, and applicable laws and regulations, when it implemented the Good Potential policy? If so, what shall the remedy be?" [n2] Id. at 2.
The Arbitrator found that, although the Department of Treasury (Treasury) was apparently "not happy" with the parties' agreement to a promotion procedure that did not establish a middle step between the rating and ranking process and the formulation of the Best Qualified list, it did not disapprove the agreement. Id. at 13. The Arbitrator further found that, despite the fact that the use of a middle step "was precisely what the Union sought to eliminate" during the bargaining that [ v61 p227 ] resulted in Article 13, Section 5.D.1(f), "the Agency simply unilaterally drafted" the Good Potential policy in an attempt to "satisfy Treasury's concerns." Id.
Further, the Arbitrator found that the Good Potential policy could result in an arbitrary action that would violate 5 U.S.C. § 2301(b)(8) because it could eliminate the comparison of relative knowledge and skills "by arbitrarily removing from the pool any candidate" who fails to meet the 3.0 cut-off on either of the rated factors. [n3] Id. at 17. The Arbitrator also found that the Agency provided no evidence that it had performed the professionally-conducted job analysis required by 5 C.F.R. § 300.103(a) to determine the validity of the Good Potential policy before it was implemented. [n4]
The Arbitrator concluded that the Agency violated the parties' agreement and the law by implementing the Good Potential policy. Accordingly, he directed the Agency to rescind the policy and to use the procedure in Article 13 of the agreement. He also awarded priority consideration for the next available vacancies to employees who had been improperly excluded from Best Qualified lists.
III. Positions of the Parties
A. Agency Exceptions
The Agency argues that the award is contrary to 5 U.S.C. § 2301(b)(1) and 5 C.F.R. § 300.102 as well as: (1) "Oversight Notes" that explain the Office of Personnel Management's (OPM's) findings regarding employment practices at certain government facilities (the OPM Notes); (2) a 1992 letter from OPM interpreting the Federal Personnel Manual (the FPM Letter); and (3) a memorandum from the Department of Treasury summarizing OPM's findings regarding certain Treasury employment practices (the Treasury Oversight Memo). [n5]
According to the Agency, under the above-cited authorities, agencies are required to use a method to ensure that candidates on a Best Qualified list are selected from the most highly-qualified group of candidates. The Agency claims that Article 13, Section 5.D.1(f) violates this requirement because it mandates that four candidates be included on the Best Qualified list even if they are only minimally qualified. The Agency also challenges the Arbitrator's finding that the Good Potential policy is arbitrary.
In addition, the Agency contends that the award excessively interferes with management's right to make selections under § 7106(a)(2)(C) of the Statute. Specifically, the Agency claims that the award excessively interferes with the Agency's ability, in developing the Best Qualified list, to determine which candidates will perform at a fully successful level in a position.
B. Union Opposition
The Union contends that the award is not contrary to 5 U.S.C. § 2301(b)(1), 5 C.F.R. § 300.102, the OPM Notes, the FPM Letter, or the Treasury Oversight Memo. In addition, the Union argues that the award does not excessively interfere with management's right to make selections because it preserves the selecting official's right to select or non-select from any list. The Union also argues that the Arbitrator was enforcing a procedure within the meaning of § 7106(b)(2) of the Statute.
IV. Analysis and Conclusions
The Agency argues that the award is contrary to law. The Authority reviews questions of law de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying a standard of de novo review, the Authority determines whether the arbitrator's legal conclusions are consistent with the applicable standard of law. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that determination, the Authority defers to the arbitrator's underlying factual findings. See id.
A. The award is not contrary to 5 U.S.C. § 2301(b)(1) and 5 C.F.R.
5 U.S.C. § 2301(b)(1) provides, in pertinent part, that "Federal personnel management should be implemented consistent with" the principle that "[r]ecruitment should be from among qualified individuals from appropriate sources . . . and selection and advancement [ v61 p228 ] should be determined solely on the basis of relative ability, knowledge, and skills . . ." Similarly, 5 C.F.R. § 300.102 states, in pertinent part, that 5 C.F.R. Part 300, Subpart A ("Employment Practices") "is directed to implementation of the policy that competitive employment practices . . . [r]esult in selection from among the best qualified candidates."
The Arbitrator found that the parties' agreement contains required criteria beyond basic qualifications, and that a rating and ranking panel distinguishes best-qualified or highly-qualified candidates from minimally-qualified candidates. See Award at 15-16. The award permits the Agency to continue to utilize the criteria and the rating and ranking panel. Moreover, even if a candidate who is minimally qualified is referred to the selecting official, the selecting official is free, in making the selection decision, to consider the candidate's rating (including the fact that the candidate is minimally qualified) as well as the candidate's placement in the ranking. For these reasons, the award preserves the Agency's ability to recruit "qualified" individuals, to select candidates "on the basis of relative ability, knowledge, and skills" under § 2301(b)(1), and to select "from among the best qualified candidates" under § 300.102.
Further, it is well established that unions and agencies may enter into contract provisions if the provisions are within the discretion of the agency under applicable law and regulations and are not otherwise contrary to law or regulation. See NTEU, 38 FLRA 615, 619-21 (1990). Nothing in § 2301(b)(1) or § 300.102 requires the Agency to use the Good Potential Policy or any other type of cut-off score before candidates' applications may be submitted to a selecting official. Thus, nothing in § 2301(b)(1) or § 300.102 establishes that the Agency lacked discretion to agree to Article 13, Section 5.D.1(f), which the Arbitrator interpreted as providing that the top four qualified candidates would be deemed "best qualified" and referred for consideration to the selecting official.
In addition to § 2301(b)(1) and § 300.102, the Agency relies on the OPM Notes, the FPM Letter, and the Treasury Oversight Memo. [n6] The award does not conflict with these documents. In this regard, although the documents provide that agencies must identify criteria to distinguish minimally-qualified candidates from more highly-qualified candidates, as discussed above, the award does not prevent the Agency from identifying such criteria. Additionally, although the FPM Letter states that agencies are required to "select only from the well-qualified group," the award does not require the Agency to select any particular individual and, thus, does not affect the Agency's ability to select from a well-qualified group. Exceptions, Attachment A #3 at 2. None of the documents requires agencies to use a cut-off score between the rating and ranking of candidates and the submission of names to the selecting official.
For the foregoing reasons, the Agency has not established that the award is contrary to § 2301(b)(1), § 300.102, or the three documents.
B. The award is not contrary to management's right to make
selections under § 7106(a)(2)(C) of the Statute.
In resolving whether an arbitrator's award violates management's rights under § 7106 of the Statute, the Authority first determines whether the award affects management's rights. See United States Small Bus. Admin., 55 FLRA 179, 184 (1999). If the award affects management's rights, then the Authority applies the two-prong test established in United States Dep't of the Treasury, Bureau of Engraving & Printing, Wash., D.C., 53 FLRA 146 (1997)(BEP) [n7] If the award does not affect management's rights, then application of BEP is unnecessary. See, e.g., United States Dep't of Veterans Affairs, Med. Ctr., Coatesville, Pa., 56 FLRA 966, 971 (2000) (VAMC Coatesville).
The Agency claims that the award interferes with its right "to rate and rank applicants and to make selections." [ v61 p229 ] Exceptions at 17. Section 7106(a)(2)(C) of the Statute provides management the right, "with respect to filling positions, to make selections for appointments from . . . among properly ranked and certified candidates for promotion or . . . any other appropriate source." 5 U.S.C. § 7106(a)(2)(C)(i) & (ii). The Statute does not provide for a separate management right to "rate and rank applicants." Although certain types of requirements involving rating and ranking have been found to affect management's right to select under § 7106(a)(2)(C), the award at issue here does not impose any of those types of requirements. Cf., e.g., United States Dep't of the Navy, Supervisor of Shipbuilding, Conversion & Repair, Newport News, Va., 56 FLRA 339, 343 (2000) (Member Wasserman dissenting in part on other grounds) (requirement that agency reallocate weight given to selective factors for position held to affect right to select), decision after remand, 57 FLRA 36 (2001) (Chairman Cabaniss dissenting in part on other grounds). The award now before us merely requires that, after candidates have been rated and ranked, the Agency must submit the four most highly-ranked candidates' names to the selecting official for consideration. [n8] It does not require the Agency to reallocate the weight it gives to any selective factors or otherwise dictate how candidates shall be rated and ranked.
In addition, the Authority has held that a requirement that expands, rather than limits, an agency's selection options does not affect the right to select. See AFGE, HUD Council of Locals 222, Local 2910, 54 FLRA 171, 178-79 (1998) (HUD Council) (proposal expanding applicant pool by requiring agency to accept and consider applications from field office employees). [n9] Further, while a requirement that management actually select candidates for positions affects management's right to select under § 7106(a)(2)(C), a requirement that management merely consider certain candidates does not affect that right. See United States DOD, Def. Commissary Agency, Fort Lee, Va., 59 FLRA 554, 559 (2004) (DOD) (citations omitted). [n10]
The award requires the submission of the top four candidates' names to a selecting official without regard to whether those candidates meet the cut-off score under the "Good Potential" policy. Thus, in a situation where all of the top four candidates did not meet the cut-off score, the award would require the Agency to submit names of candidates that it would not otherwise submit. Consequently, in such situation, the award expands, rather than limits, the selecting official's selection options. Additionally, even if the award does not always result in such expansion, it requires only consideration, not selection, of those candidates.
Moreover, as noted in the award, the Arbitrator found the Agency's actions improper because the Agency "unilaterally implemented" its new procedure for rating and ranking applicants. Award at 20. We agree with our dissenting colleague that agencies have the right to determine selection factors used to evaluate applicants for vacant positions. See, e.g., NTEU v. FLRA, 848 F.2d 1273 (D.C. Cir. 1988). However, while the Agency has the ability to unilaterally determine what those factors shall be, there is no basis in the facts of this case for concluding that the Agency also has the ability to unilaterally change the contractually agreed-upon procedures by which those selection factors will be applied. Therefore, even though the Agency may not have had an obligation to bargain over the substance of the selection factors to be used if the Agency had properly pursued the matter, that does not insulate the Agency from its unilateral modification of the contract's procedures by which those selection factors would be applied.
For the foregoing reasons, and consistent with the above-cited precedent, we conclude that the award is not deficient as inconsistent with management's right to select under § 7106(a)(2)(C) of the Statute. Accordingly, we would find it unnecessary to apply the BEP analysis, see, e.g., VAMC Coatesville, 56 FLRA at 971, and we deny the exception.
The Agency's exceptions are denied.
File 1: Authority's Decision in 61
File 2: Opinion of Member Armendariz
Footnote # 1 for 61 FLRA No. 41 - Authority's Decison
Footnote # 2 for 61 FLRA No. 41 - Authority's Decison
Section 3 provides, in pertinent part: "The Employer has determined that selective placement factors will only be used in determining eligibility when they are essential to successful performance in the position to be filled. In such cases, they will constitute a part of the minimum requirements of the position in question." Exceptions, Attachments, Jt. Ex. 1 at 44. The pertinent wording of Section 5 is set forth above. Section 6 provides, in pertinent part: "The BQ applicants will be the top four (4) applicants plus one (1) additional name for each additional vacancy . . . ." Id. at 49.
Footnote # 3 for 61 FLRA No. 41 - Authority's Decison
Footnote # 4 for 61 FLRA No. 41 - Authority's Decison
5 C.F.R. § 300.103(a) provides, in pertinent part: "Each employment practice of the Federal Government generally, and of individual agencies, shall be based on a job analysis" meeting certain requirements.
Footnote # 5 for 61 FLRA No. 41 - Authority's Decison
5 U.S.C. § 2301(b)(1) provides, in pertinent part, that "Federal personnel management should be implemented consistent with" the principle that "[r]ecruitment should be from among qualified individuals from appropriate sources . . . and selection and advancement should be determined solely on the basis of relative ability, knowledge, and skills . . . ."
5 C.F.R. § 300.102 states, in pertinent part, that 5 C.F.R. Part 300, Subpart A ("Employment Practices") "is directed to implementation of the policy that competitive employment practices . . . [r]esult in selection from among the best qualified candidates[.]"
Footnote # 6 for 61 FLRA No. 41 - Authority's Decison
It is unclear whether the FPM Letter is still in effect. In this connection, the FPM was abolished in 1994 and, as a result, the Authority has declined to apply prior interpretations of provisions of the FPM where those provisions have not been codified elsewhere. See SSA, Office of Hearings & Appeals, Paducah, Ky., 58 FLRA 124, 125 (2002) (Member Pope concurring). However, where a provision of the FPM has been incorporated into the Code of Federal Regulations without substantive change, the Authority has continued to apply OPM advisory opinions interpreting those FPM provisions. See United States Dep't of the Navy, Naval Undersea Warfare Ctr. Div., Keyport, Wash., 55 FLRA 884, 887-88 (1999) (then-Member Cabaniss dissenting in part as to other matters). It is unclear whether the FPM Letter in this case concerns a provision of the FPM that was incorporated into the Code of Federal Regulations without substantive change. However, it is unnecessary to resolve that issue because, as discussed herein, the award does not conflict with the Letter.
Footnote # 7 for 61 FLRA No. 41 - Authority's Decison
Under prong I of BEP, the Authority examines whether the award provides a remedy for a violation of either an 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. 53 FLRA at 153. If it does, then under prong II of BEP, the Authority examines whether the arbitrator's remedy reflects a reconstruction of what management would have done if management had not violated the law or contractual provision at issue. Id. at 154.
Footnote # 8 for 61 FLRA No. 41 - Authority's Decison
As such, we disagree with the dissent's statement that the award requires the Agency to submit to the selecting official candidates who have not been "properly ranked and certified." Dissent at 11-12 (quoting 5 U.S.C. § 7106(a)(2)(C)(i)). In this connection, it is undisputed that the candidates who are submitted meet minimum qualifications and have been rated and ranked. The dissent does not explain how the ranking or certification of candidates is improper in these circumstances.
Footnote # 9 for 61 FLRA No. 41 - Authority's Decison
While the agency in HUD Council claimed that the proposal at issue here affected its right to select from "any' source," 54 FLRA at 172, the Authority's holding was not limited to the subsection of § 7106(a)(2)(C) concerning the right to make selections from "any other appropriate source[.]" 5 U.S.C. § 7106(a)(2)(C)(ii). Rather, the Authority's holding applied to § 7106(a)(2)(C) broadly. See id.