United States, Department of Transportation, Federal Aviation Administration (Agency) and Professional Airways Systems Specialists, AFL-CIO (Union)
[ v61 p750 ]
61 FLRA No. 151
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
PROFESSIONAL AIRWAYS SYSTEMS
September 11, 2006
Before the Authority: Dale Cabaniss, Chairman and
Carol Waller Pope, Member
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator John P. Difalco 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 exceptions.
The Arbitrator found that the Agency violated the parties' collective bargaining agreement by incorrectly paying the grievants after increasing the number of standby hours required of them each week. The Arbitrator ordered the Agency to pay the employees overtime pay under the Fair Labor Standards Act (FLSA) for the extra standby time.
For the following reasons, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
The grievants operate radar equipment at a long-range radar site that provides around the clock coverage for the air traffic control system. This coverage requires that certain employees remain at the worksite in a standby status, prepared to be called back to work at any time. Prior to October 2004, employees at the site were paid a 25% annual premium for performing 32-36 hours of standby duty per pay period. See generally 5 U.S.C. § 5545 (current statute governing annual premium for standby); 5 C.F.R. § 550.141 (current regulation governing same). [n1] At that time, the Agency increased the required number of standby duty hours for each employee to 84 per pay period, leaving the 25% annual premium unchanged.
The Union filed a grievance, and the parties agreed to submit the following issue to arbitration:
Were the [g]rievants at the Cascade Long Range Radar Site paid correctly after the increase in the amount of standby time, beginning in pay period 23/October 2004, and in the pay periods thereafter? If not, what shall the remedy be?
Award at 2.
The Arbitrator found that the pay dispute at issue had "historical roots" in federal statute and regulation, but must be evaluated pursuant to the terms of the parties' collective bargaining agreement. Award at 21. He noted that the 25% annual premium originated with a request from the Agency to the Civil Service Commission in the 1970's "to cover what the Agency considered to be unique circumstances." Award at 4; see 5 C.F.R. § 550.144(b) (agency may request that Office of Personnel Management approve enhanced rate of annual premium pay for standby duty where "unusual conditions" are present). The Arbitrator also found that the Agency became exempt from most of the provisions of Title V in 1996, [n2] that the matter of premium pay became a subject of bargaining between the parties, and that the parties [ v61 p751 ] incorporated the existing 25% premium for working 32-36 hours of standby per pay period into their 2000 collective bargaining agreement by agreeing to "retain all premium pays." Award at 25, 28 (quoting Chapter 5 of negotiated pay plan). He thus concluded that the agreement -- not premium pay regulations -- was the relevant authority governing this premium.
Addressing the contract issue, the Arbitrator found that "applying a rule of reason[,]" the Agency's position that it could unilaterally increase the required number of standby hours without limit for the same 25% premium payment was "neither logical nor fair." Award at 22. The Arbitrator next found that the 1996 legislation did not exempt the Agency from the mandates of the FLSA. He determined that the Agency had the authority to increase the amount of standby time worked by the employees, but that once it "signaled its intent to not abide by . . . the Collective Bargaining Agreement" and exceeded the contractually agreed on 32-36 hours of standby time per pay period, the employees were entitled to be paid under the standards of the FLSA. Award at 30. The Arbitrator relied on FLSA regulations indicating that standby time is considered "hours of work" for purposes of overtime compensation, 5 C.F.R. 551.431(a)(1) (§ 551.431), [n3] and ordered the Agency to pay the employees time-and-a-half for any hours of work, including standby hours, over 40 in a week. Award at 30.
III. Positions of the Parties
A. Agency's Exceptions
The Agency argues that the award is contrary to the Agency's Personnel Management System (PMS) and governing regulations pertaining to annual premium pay and standby time. According to the Agency, its Personnel Reform Information Bulletin (PRIB) #1 states that current systems and procedures remain in effect until superceded by a PRIB and the annual premium pay rules are found in FAA Order 3550.10 and 5 C.F.R. § 550.1. [n4] The Agency argues that it is contrary to law to not apply the agency regulations where the CBA is silent on the matter.
The Agency further argues that the award is not consistent with the FLSA because the FLSA precludes the Agency from paying both overtime and annual premium pay. Exceptions at 4 (citing 5 C.F.R. § 551.512). [n5] According to the Agency, the award requires the Agency to compensate employees for the increase in the number of standby hours by providing both an annual premium and overtime pay, which constitutes a dual premium in violation of 5 C.F.R. §§ 550.1 and 551.512. Further, the Agency claims that the award violates the doctrine of sovereign immunity because there is no specific statutory authorization for the award. Additionally, the Agency asserts that the award violates the Agency's management rights by constructing a pay system and by capping the number of hours of standby time.
Finally, the Agency argues that the Arbitrator exceeded his authority by ruling that the increase in the number of hours of standby time "took the Agency out from under their pay regulations and forced the Agency to pay an additional premium compensation." Exceptions at 6.
B. Union's Opposition
The Union argues that the award is consistent with law because the regulations relied on by the Agency implement 5 U.S.C. § 5545, which does not apply to the Agency. In this regard, the Union asserts that the Arbitrator properly relied on the FLSA, which does apply to the Agency. According to the Union, the FLSA regulation prohibiting payment of overtime pay to employees receiving an annual premium does not apply to the grievants because they were not receiving premium pay under §5545. Further, the Union asserts that the award does not provide for a dual payment because it is clear that the employees receive either annual premium pay or FLSA overtime, not both. With respect to the Agency's sovereign immunity claim, the Union asserts that both the FLSA and the Back Pay Act waive sovereign immunity in this context. [ v61 p752 ]
With respect to the Agency's assertion that the award violates its management rights, the Union notes that the Agency has not identified the management right that it claims is affected. Assuming that the Agency is claiming that its right to assign work is affected, the Union argues that the award merely requires the Agency to pay the employees correctly and that the award specifically reaffirms the Agency's "absolute right to make the decision to increase standby time . . .." Opposition at 16 (quoting Award at 30).
With respect to the Agency's claim that the Arbitrator exceeded his authority, the Union contends that the Agency has provided no facts or analysis to support the claim.
IV. Analysis and Conclusions
A. The award is not contrary to law.
The Agency claims the award is contrary to law in various respects. The Authority reviews questions of law raised by exceptions to an arbitration award 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 the standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable legal standard. See United States Dep't of Defense, Dep'ts of the Army and the Air Force, Ala. Nat'l Guard, Northport, Ala., 55 FLRA 37, 40 (1998) (DOD). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
1. Agency and OPM Regulations
Under the FAA Act, the Agency is required to negotiate pursuant to the Statute with exclusive bargaining representatives concerning the compensation of its employees. 49 U.S.C. § 40122(a)(1); see United States Dep't of Transp., Fed. Aviation Admin., Mike Monroney Aeronautical Ctr., 58 FLRA 462, 463 (2003) (FAA). Applying the general principle under the Statute that "collective bargaining agreements, rather than agency wide regulations, govern the disposition of matters to which they both apply[,]" the Authority has held that contract provisions entered into by the Agency control any matter to which they apply, even if they are inconsistent with the Agency's personnel management system regulations. Id. at 464.
Here the Arbitrator found that the subject of annual premium pay "was incorporated into [the parties'] Collective Bargaining Agreement" by Chapter 5 of the Pay Plan, which provided that "the FAA will retain all premium pays that are currently applicable to airway facilities." Award at 25, 28. As such, the Arbitrator resolved the dispute based on the parties' agreement. Because the agreement controls the matter even if it is inconsistent with the Agency's regulations, the Agency's argument that the award is inconsistent with its personnel regulations provides no basis for finding the award deficient.
Turning to the Agency's claim that the award is inconsistent with 5 C.F.R. Part 550, the FAA Act provides that Title 5 does not apply to the Agency's personnel system, with certain exceptions that do not include the standby premium pay provisions of § 5545 of that title. 49 U.S.C. § 40122(g)(2); see FAA, 58 FLRA at 463-64. As the premium pay standards of § 5545 do not apply to the Agency, the regulations implementing that statute also do not apply to the Agency. The Agency's argument that the award is deficient because it is contrary to these regulations is thus unavailing.
2. The FLSA and Sovereign Immunity
The FLSA applies to federal employees and requires that they be paid one and a half times their regular rate of pay for all hours of work over 40 in a workweek. 29 U.S.C. §§ 203(e)(2)(A); 207(a)(1). OPM's regulations implementing the FLSA provide that time employees spend in a standby status is considered hours of work for overtime pay purposes if the employee "is restricted by official order to a designated post of duty and is assigned to be in a state of readiness to perform work . . . ." 5 C.F.R. § 551.431(a)(1); see United States Dep't of Justice, Immigration & Naturalization Serv., Wash., D.C., 44 FLRA 343, 352 (1992) (acknowledging that employees are entitled to overtime pay for standby duty under the FLSA). The FAA Act contains no exemption from the FLSA and the Agency does not dispute that it is required to follow the FLSA.
The Arbitrator found that the FLSA required the Agency to pay the employees overtime pay for their standby duty, relying on § 551.431. The Agency does not dispute that the standby time assigned to the grievants satisfies § 551.431. Rather, it asserts that the award permits the employees to have "dual premiums" under the FLSA and OPM's annual premium pay regulations, in violation of 5 C.F.R. § 551.512 (§552.512). Exceptions at 5.
Contrary to the Agency's claim, nothing in the award awards dual premiums to the grievants. Rather, the Arbitrator found that once the Agency chose to order employees to work 84 hours of standby time per pay period, "the pay plan that the parties had negotiated for [ v61 p753 ] premium pay was no longer relevant or applicable" and premium pay entitlement "reverted back" to the FLSA. Award at 32. Further, the award specifically eliminated any possibility of double payment by ordering that each grievant be paid "all premium pays, including FLSA overtime, less the amounts that [the] employee has already received in annual premium pay . . . ." Award at 34. In any event, as explained above, Part 550 does not apply to the Agency and cannot limit the Agency's ability to pay premium pay. Even if it did apply to the Agency, nothing in § 551.552 prohibits employees who earn annual premium pay from also earning premium pay for additional overtime hours worked. Instead, § 551.552 merely requires that annual premium pay and the standby hours associated with it be included in the calculation of the employees "straight time rate of pay" used to compute the overtime pay rate. Thus, the Agency has not established that the award of premium pay for all standby hours at the FLSA rate and no pay at the annual premium pay rate is contrary to law.
The Agency also makes an unexplained assertion that the award violates the doctrine of sovereign immunity. The Authority has specifically held that "the FLSA constitutes a waiver of sovereign immunity." NTEU, 53 FLRA 1469, 1487 (1998). The Agency's argument is, therefore, groundless.
3. Management Rights
When resolving an exception alleging that an award violates management's rights under § 7106 of the Statute, the Authority first determines whether the award affects a management right under § 7106(a). See United States Small Bus. Admin., 55 FLRA 179, 184 (1999). If it does, then the Authority applies the framework established in United States Dep't of the Treasury, Bureau of Engraving & Printing, Wash., D.C., 53 FLRA 146 (1997) (BEP). [n6] If the award does not affect a management right, then the Authority does not apply the BEP framework. See United States DOD, Marine Corps Logistics Base, Albany, Ga., 57 FLRA 275, 277-78 (2001).
The Agency asserts that the award violates its rights under § 7106 "by constructing its own pay system" and "capp[ing] the number of standby hours to 36 per pay period. Exceptions at 6. The Agency does not elaborate or point to any precedent indicating that any management right has been construed to encompass the right to construct a pay system. Construing the Agency's claim that the award caps the number of standby hours as a claim that the award affects its right to assign work under 5 U.S.C. § 7106 (a)(2)(B), the Arbitrator specifically held that the Agency "had [the] authority to change those employment conditions, including work hours and standby time." Award at 28, 29. As the award is limited to the appropriate rate of pay, rather than the Agency's right to assign standby hours, the Agency has failed to establish that the award affects its management rights and it is unnecessary to apply the two-prong test set forth in BEP. See United States Dep't of Transp., Fed. Aviation Admin., Jacksonville Ctr., Jacksonville, Fla., 60 FLRA 165, 167 (2004).
B. The Arbitrator did not exceed his authority.
Arbitrators exceed their authority when they fail to resolve an issue submitted to arbitration, resolve an issue not submitted to arbitration, disregard specific limitations on their authority, or award relief to those not encompassed within the grievance. See AFGE, Local 1617, 51 FLRA 1645, 1647 (1996). The Agency claims that the Arbitrator exceeded his authority by ruling that the standby time ordered by the Agency was not to be paid under its regulations and by forcing the Agency to pay additional overtime pay. However, the Agency does not dispute that the parties stipulated to the Arbitrator that the issue in the case was whether the grievants had been paid correctly after the Agency increased the amount of their standby hours. As the Arbitrator's ruling that the Agency was required to pay the employees additional overtime pay is directly responsive to the stipulated issue, the Agency has not established that the Arbitrator exceeded his authority.
The Agency's exceptions are denied. [ v61 p754 ]
49 U.S.C. § 106(l)(1) provides, in pertinent part:
(1) Officers and employees.-- Except as provided in subsections (a) and (g) of section 40122, the Administrator is authorized, in the performance of the functions of the Administrator, to appoint, transfer, and fix the compensation of such officers and employees, including attorneys, as may be necessary to carry out the functions of the Administrator and the Administration. In fixing compensation and benefits of officers and employees, the Administrator shall not engage in any type of bargaining, except to the extent provided for in section 40122(a), nor shall the Administrator be bound by any requirement to establish such compensation or benefits at particular levels.
49 U.S.C. § 40122 provides, in pertinent part:
(a) In general.--
(1) Consultation and negotiation.-- In developing and making changes to the personnel management system initially implemented by the Administrator of the Federal Aviation Administration on April 1, 1996, the Administrator shall negotiate with the exclusive bargaining representatives of employees of the Administration certified under section 7111 of title 5 and consult with other employees of the Administration.
(g) Personnel management system.--
(1) In general.-- In consultation with the employees of the Administration and such non-governmental experts in personnel management systems as he may employ, and notwithstanding the provisions of title 5 and other Federal personnel laws, the Administrator shall develop and implement, not later than January 1, 1996, a personnel management system for the Administration that addresses the unique demands on the agency's workforce. Such a new system shall, at a minimum, provide for greater flexibility in the hiring, training, compensation, and location of personnel.
(2) Applicability of title 5.-- The provisions of title 5 shall not apply to the new personnel management system developed and implemented pursuant to paragraph (1), with the exception of--
(A) section 2302(b), relating to whistleblower protection, including the provisions for investigation and enforcement as provided in chapter 12 of title 5;
(B) sections 3308-3320, relating to veterans' preference;
(C) chapter 71, relating to labor-management relations;
(D) section 7204, relating to antidiscrimination;
(E) chapter 73, relating to suitability, security, and conduct;
(F) chapter 81, relating to compensation for work injury;
(G) chapters 83-85, 87, and 89, relating to retirement, unemployment compensation, and insurance coverage; and
(H) sections 1204, 1211-1218, 1221, and 7701-7703, relating to the Merit Systems Protection Board.
Footnote # 1 for 61 FLRA No. 151 - Authority's Decision
The head of an agency, with the approval of the Office of Personnel Management, may provide that ñ (1) an employee in a position requiring him regularly to remain at, or within the confines of, his station during longer than ordinary periods of duty, a substantial part of which consists of remaining in a standby status rather than performing work, shall receive premium pay for this duty on an annual basis instead of premium pay provided by other provisions of this subchapter, .... Premium pay under this paragraph is determined as an appropriate percentage, not in excess of 25 percent, of such part of the rate of basic pay for the position as does not exceed the minimum rate of basic pay for GS-10 . . . .
5 C.F.R. 550.141 provides, in pertinent part:
An agency may pay premium pay on an annual basis . . . to an employee in a position requiring him or her regularly to remain at, or within the confines of, his or her station during longer than ordinary periods of duty, a substantial part of which consists of remaining in a standby status rather than performing work.
Footnote # 2 for 61 FLRA No. 151 - Authority's Decision
In 1996, Congress enacted the Air Traffic Management System Performance Improvement Act, Pub. L. No. 104-264, 110 Stat. 3213, 3227 (the FAA Act), which is codified at Title 49 United States Code. The text of relevant sections of title 49 are set forth at the end of this decision.
Footnote # 3 for 61 FLRA No. 151 - Authority's Decision
5 C.F.R. § 551.431(a)(1) provides, in pertinent part: "An employee is on duty, and time spent on a standby duty is hours of work if, for work-related reasons, the employee is restricted by official order to a designated post of duty and is assigned to be in a state of readiness to perform work with limitations on the employee's activities so substantial that the employee cannot use the time effectively for his or her own purposes.
Footnote # 4 for 61 FLRA No. 151 - Authority's Decision
FAA Order 3550.10, § 7, par. 122 (Table 1) provides for an annual premium pay rate of 15 per cent for 14-18 hours of weekly standby duty and "14 or more" per cent for "28 or more" hours of weekly standby duty. The Code of Federal Regulations does not contain a § 550.1 in chapter 5.
Footnote # 5 for 61 FLRA No. 151 - Authority's Decision
5 C.F.R. § 551.512(b) provides that "An employee's `straight time rate of pay' is equal to the employee's rate of pay for his or her position (exclusive of any premiums, differentials, or cash awards or bonuses) except for an employee who is authorized annual premium pay under § 550.141 or § 550.151 of this chapter. For an employee who is authorized annual premium pay, [the] straight time rate of pay is equal to basic pay plus annual premium pay divided by the hours for which the basic pay plus annual premium pay are intended."
Footnote # 6 for 61 FLRA No. 151 - Authority's Decision
Under prong I of the BEP framework, the Authority examines whether an 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. BEP, 53 FLRA at 153-54. Under prong II, the Authority considers whether the award reflects a reconstruction of what management would have done if management had not violated the