United States, Department of the Treasury, Internal Revenue Service (Agency) and National Treasury, Employees Union (Union)
[ v61 p667 ]
61 FLRA No. 135
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
August 23, 2006
Before the Authority: Dale Cabaniss, Chairman and
Carol Waller Pope, Member
I. Statement of the Case
This matter is before the Authority on an exception to an award of Arbitrator Barry Winograd 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 exception.
The Arbitrator determined that the Agency violated the parties' collective bargaining agreement by "failing to detail [the grievant] for performing work" at a higher-grade level. Award at 28. As a remedy, the Arbitrator ordered the grievant made whole for the pay differential he should have received for the higher-graded work for an 8-month period.
For the reasons set forth below, we conclude that to the extent that the Arbitrator's backpay remedy [ v61 p668 ] exceeds 120 days, it is deficient because it is contrary to 5 C.F.R. § 335.103(c). [n1]
II. Background and Arbitrator's Award
The Arbitrator determined that the Agency violated Article 16, Section (1)(B)(2) of the parties' collective bargaining agreement when it "failed to detail [the grievant, a GS-12 employee,] for performing work at the Grade 13 level for the 120 day period prior to November 21, 2000, and continuing to March 23, 2001[.]" [n2] Award at 28. As a remedy, the Arbitrator ordered that the grievant be "made whole, with interest, for the pay differential he should have received for work at the Grade 13 level, commencing July 21, 2000 and ending March 23, 2001." [n3] Id. at 29. He provided monetary relief because "the parties have contractually prescribed not only the elements for finding a failure to detail to higher graded work, but also the consequence; that is, `. . . the Employer will temporarily promote the employee retroactive to the first full pay period . . . .'" Id. at 26 (quoting Article 16, Section (1)(B)(2)).
In awarding monetary relief for approximately 8 months, the Arbitrator expressly rejected the Agency's claim that monetary relief could not extend beyond 120 days under § 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) (Chairman Cabaniss and Member Pope concurring) (DVA). To the Arbitrator, the Agency overlooked "the requirement of Article 16.1.B.2, and the ongoing utilization of [the grievant] in a higher graded capacity, at least until March 2001." Id. at 27. In the Arbitrator's view, "[t]o deny a remedy longer tha[n] 120 days not only would be at odds with negotiated terms, but, in effect, would reward the Agency with a monetary windfall for its persistent contractual transgression, despite grievances having been lodged, thereby subverting the deterrent value of the contract's prohibitory language." Id.
III. Positions of the Parties
The Agency contends that the award is deficient "because awarding [the] grievant a retroactive detail to a higher grade position of more than 120 days is prohibited by federal law." Exception at 4. More specifically, the Agency asserts that the award of more than 120 days of monetary relief is contrary to § 335.103(c) and the Authority's decision in DVA. The Agency maintains that pursuant to § 335.103(c), competitive promotion procedures must be applied to all actions involving details or temporary promotions of more than 120 days to higher-graded positions and that absent a competitive process, retroactive details of more than 120 days to higher-graded positions are prohibited. The Agency asserts that similarly, under the Authority's decision in DVA, an award of backpay for the performance of higher-graded work is limited to 120 days and that agreement provisions and arbitration awards that are inconsistent with § 335.103(c) are deficient. Accordingly, the Agency argues that the monetary remedy award by the Arbitrator must be modified to be limited to 120 days.
The Union asserts that the monetary remedy is not contrary to § 335.103(c) because the Arbitrator "did not expressly award a retroactive detail or temporarily promote the grievant[.]" Opposition at 4. The Union argues that instead, the Arbitrator found that the Agency violated Article 16 by failing to detail the grievant and, without specifically detailing or promoting the grievant, ordered him made whole pursuant to the Back Pay Act for the work he performed at the GS-13 grade level.
The Union also asserts that the award of backpay is consistent with relevant Authority precedent. The Union argues that in similar circumstances in United States Dep't of the Navy, Norfolk Naval Shipyard, Portsmouth, Va., 55 FLRA 1014 (1999) (Norfolk Naval Shipyard), the Authority found an award of backpay consistent with both the Back Pay Act and § 335.103(c) and that a similar finding is warranted in this case. According to the Union, DVA is distinguishable because the arbitrator in DVA specifically awarded a temporary promotion for a period of more than 120 days. The Union maintains that § 335.103(c) pertains to whether a remedy of an ordered detail or temporary promotion is consistent with [ v61 p669 ] § 335.103(c), not to whether an employee should be paid for performing work at a higher-grade level. In addition, the Union asserts that to preclude financial relief "rewards and encourages an [a]gency to violate contractual provisions and regulations designed to protect employees and to ensure effective and efficient government." Id. at 8-9. The Union also argues that "it is simply unfair to an employee who finds him or herself working in such a circumstance." Id. at 9.
Further, the Union disputes the conclusion in DVA that the Office of Personnel Management's (OPM's) interpretation of § 335.103(c) is not plainly erroneous. The Union claims that the Authority's reliance on OPM's interpretation cannot be reconciled with the concept of a de facto or constructive detail where the application of competitive promotion procedures is not possible. The Union also claims that OPM's interpretation defeats the purpose of the regulation because it prevents an employee from being made "financially whole" and creates an inconsistency with 5 C.F.R. § 550.801(a), which acknowledges that the Back Pay Act authorizes the payment of backpay "for the purpose of making an employee financially whole (to the extent possible)[.]" The Union further maintains that OPM's interpretation is inconsistent with 5 C.F.R. § 550.805(a), which states that in computing backpay the employee "shall be deemed to have performed service for the agency during the period covered by the corrective action[.]" In the Union's view, this provision requires backpay for the entire period of the performance of higher-graded duties. Finally, the Union claims that OPM's interpretation of § 335.103(c) is plainly erroneous because it limits backpay based on a situation where an agency should have acted, but failed to do so.
IV. Analysis and Conclusions
A. Standard of Review
The Authority reviews the questions of law raised by the Agency's exception 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 applicable standards of law. 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. Decision in DVA
In DVA, the arbitrator concluded that the grievant had performed the duties of a higher-graded position from July 1999 to February 2002 and that under the parties' collective bargaining agreement, she should have been temporarily promoted. Accordingly, he directed the agency to temporarily promote the grievant retroactively to the higher grade effective August 1999 to February 2002.
In its exceptions, the agency contended that the arbitrator's award of a retroactive temporary promotion in excess of 120 days without competition was contrary to § 335.103(c). The Authority requested an advisory opinion from OPM on the applicability of the requirements of 5 C.F.R. § 335.103(c)(1)(i) that competitive procedures apply to promotions exceeding 120 days, and, if the requirements apply, on the effect they have on the arbitral remedy of a retroactive temporary promotion exceeding 120 days. OPM advised that "5 C.F.R. § 335.103(c)(1)(i) applies." 60 FLRA at 47 (quoting OPM Opinion at 1). OPM emphasized that the regulations leave no doubt that time-limited promotions of more than 120 days must be made pursuant to competition under an agency merit promotion plan and that consequently, the arbitrator's order of a retroactive temporary promotion in excess of the regulatory cap of 120 days was contrary to § 335.103(c). See id.
The Authority ruled that the union had failed to establish that OPM's interpretation of § 335.103(c) was "plainly erroneous or inconsistent" with the language of § 335.103(c) and that consequently, the Authority would rely on OPM's advisory opinion in determining whether the award was contrary to § 335.103. Id. at 49 (quoting FLRA v. United States Dep't of the Treasury, Fin. Mgmt. Serv., 884 F.2d 1446, 1454 (D.C. Cir. 1989)). Applying OPM's interpretation of § 335.103(c), the Authority concluded that the award was deficient to the extent that it awarded a retroactive temporary promotion without competition for a period in excess of 120 days. In addition, the Authority ruled that because the awarded promotion was without competition, there was no personnel action that resulted in a reduction in pay and that consequently, the grievant was not entitled to backpay in excess of 120 days. The Authority also stated that "to the extent that Authority precedent would support a conclusion that the award in the circumstances presented here is not inconsistent with 5 C.F.R. § 335.103(c), it will no longer be followed." Id. at 50.
C. Application of DVA in this case
Applying DVA, we conclude that the Arbitrator's backpay remedy in this case is deficient to the extent that it exceeds 120 days. [ v61 p670 ]
In DVA, OPM advised that temporary promotions of more than 120 days must be made pursuant to competition and that an arbitrator's award of a temporary promotion in excess of the regulatory cap of 120 days is contrary to § 335.103(c). The Union argues that DVA does not apply and that the Arbitrator's monetary remedy is not contrary to § 335.103(c) because the Arbitrator "did not expressly . . . temporarily promote the grievant[.]" Opposition at 4. We reject this argument because a retroactive temporary promotion, whether express, constructive, or implied, is essential to an award of backpay for the performance of the duties of a higher-graded position to which the grievant was never appointed. See Spagnola v. Stockman, 732 F.2d 908, 910, 912 (Fed. Cir. 1984). Moreover, in Norfolk Naval Shipyard, on which the Union relies, the Authority acknowledged that effecting retroactive temporary promotions may be necessary to comply with an award of backpay in these cases. See Norfolk Naval Shipyard, 55 FLRA at 1016 n.6.
A provision in a collective bargaining agreement establishing the requisite mandatory promotion is enforceable only to the extent consistent with civil service regulations pertaining to temporary promotions. See, e.g., Dep't of the Army, New Cumberland Army Depot, 21 FLRA 968, 972 (1986). OPM's advisory opinion in DVA places a "regulatory cap of 120 days" on retroactive temporary promotions awarded by arbitrators without competition. 60 FLRA at 47. As such, there can be no award of backpay for a period exceeding the 120-day limitation. See id. at 50. Accordingly, the Arbitrator's backpay remedy is deficient to the extent that it exceeds 120 days.
The Union's reliance on other Authority precedent, such as Norfolk Naval Shipyard, is misplaced. Such precedent preceded OPM's advisory opinion in DVA and the Authority's determination in DVA to no longer follow prior precedent that would support a conclusion that awards, such as the award in this case, were not inconsistent with § 335.103(c). We also reject the Union's claim that the award should be upheld because precluding a financial remedy is "unfair" to employees. Opposition at 9. The Union has provided no authority to support a conclusion that whether §335.103(c), as interpreted by OPM, is "fair" is relevant in this context. Moreover, as noted by the court in Spagnola v. Stockman, the lack of a financial remedy does not prevent an action to compel the employing agency to return the employee to work at the employee's appointed level after the allowable period of a detail has ended. See 732 F.2d at 912.
Finally, the Union's claim that OPM's interpretation is plainly erroneous provides no basis for the Authority to reconsider its determination in DVA to defer to the interpretation. The Union primarily argues that OPM's interpretation of § 335.103(c) is inconsistent with OPM's regulations implementing the Back Pay Act and authorizing the making of an employee financially whole. However, as noted above, there can be no entitlement to backpay for the performance of the duties of a higher-graded position for more than 120 days without a competitive promotion. Consequently, there is no inconsistency between OPM's interpretation of § 335.103(c) and OPM's regulations in 5 C.F.R. part 550, subpart H, implementing the Back Pay Act.
The Arbitrator's backpay remedy is deficient to the extent that it exceeds 120 days, and that portion of the remedy is set aside.
5 C.F.R. § 335.103 pertinently provides, as follows:
(c) Covered personnel actions--(1) Competitive actions. Except as provided in paragraphs (c)(2) and (3) of this section, competitive procedures in agency promotion plans apply to all promotions under § 335.102 of this part and to the following actions:
(i) Time-limited promotions under § 335.102(f) of this part for more than 120 days to higher graded positions . . . .
. . . .
(2) Noncompetitive actions. Competitive procedures do not apply to:
(i) A promotion resulting from the upgrading of a position without significant change in the duties and responsibilities due to issuance of a new classification standard or the correction of an initial classification error[.]
. . . .
(3) Discretionary actions. Agencies may at their discretion except the following actions from competitive procedures of this section:
. . . .
(iii) A temporary promotion , or detail to a higher grade position or a position with known promotion potential, of 120 days or less[.]
Footnote # 1 for 61 FLRA No. 135 - Authority's Decision
Footnote # 2 for 61 FLRA No. 135 - Authority's Decision
If an employee is not detailed to a position of higher grade, but who performs higher graded duties for 25% or more of his or her direct time during the preceding four (4) months, the Employer will temporarily promote the employee retroactive to the first full pay period if the employee meets the following criteria: (a) the employee performed such higher graded duties at least at a level of skill and responsibility properly expected; (b) the employee meets minimum OPM qualifications for the promotion to the next higher grade; and (c) the employee meets time-in-grade requirements for promotion to the next higher grade.
Award at 4.
Footnote # 3 for 61 FLRA No. 135 - Authority's Decision