United States, Department of the Treasury, Internal Revenue Service (Agency) and National Treasury Employees Union, Chapters 22, 34, & 60 (Union)
[ v62 p56 ]
62 FLRA No. 16
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
CHAPTERS 22, 34, & 60
(61 FLRA 168 (2005))
March 29, 2007
Before the Authority: Dale Cabaniss, Chairman and
Wayne C. Beyer, Member
I. Statement of the Case
This matter is before the Authority on remand from the United States Court of Appeals for the District of Columbia Circuit in Nat'l Treasury Employees Union v. FLRA, 466 F.3d 1079 (D.C. Cir. 2006) (NTEU). In that decision, the court set aside the Authority's decision in United States Dep't of the Treasury, IRS, 61 FLRA 168 (2005) (Member Pope dissenting) (IRS), where the Authority found an award contrary to law because it required time-off awards for volunteers whose customer-service work fell below a minimally successful level. The court vacated the Authority's decision and remanded the case to the Authority for further proceedings. Consistent with the court's decision, we remand the case to the parties for resubmission to the Arbitrator.
II. Background and Arbitrator's Award
The facts are fully set forth in the Authority's decision in IRS and are only briefly summarized here. Each year, the Agency needs additional customer service representatives during the tax-filing season. To this end, the national parties agreed to allow "local negotiations to encourage more volunteers." See Joint Exhibit (JE) 5 at 5, ¶ 10. Subsequently, the local parties negotiated memoranda of understanding (MOUs), which provided that "[a]s an incentive for volunteering, all volunteers who are utilized will receive . . . a Time Off Incentive [ v62 p57 ] Award in accordance with NORD V, Art. 18, Sec. 4." [n1] See JE 13b at 4 and JE 32. These MOUs were applicable for the 2001 and 2002 filing seasons. NORD V, Art. 18, Sec. 4(B) gives the Agency "sole discretion to offer time off in lieu of cash" and requires it to grant time-off awards "in a fair, consistent, and objective manner without discrimination." Joint Appendix (JA) at 149. In 2002, the parties reached a national agreement, which amended Art. 18, Sec. 4(B) to require the Agency to grant time-off awards to employees "on the basis of their performance, in a fair, consistent, and objective manner without discrimination." JE 3 at 65.
Also in 2002, the parties reached a national agreement for the 2003 filing season, which provided that prior national and local agreements would remain in effect unless explicitly modified by a new agreement. See Award at 6. During local negotiations, the parties resolved all issues except time-off awards. The Union wanted to retain the time-off awards provision from the previous MOUs but the Agency claimed that it was contrary to law and violated Art. 18, Sec. 4(B) of the parties' 2002 national agreement. The parties did not resolve this issue, and the Agency implemented the local MOUs without the time-off awards provision.
The Union filed grievances alleging, as relevant here, that the Agency failed to comply with the parties' national agreement for the 2003 filing season when it failed to offer volunteers time-off awards during that season. Unresolved, the grievances were submitted to arbitration.
The Arbitrator rejected the Agency's claim that the Union's proposal to retain the time-off awards provision was inconsistent with 5 U.S.C. § 4502(e) and 5 C.F.R. § 451.104(a). [n2] In this regard, the Arbitrator found that by volunteering, an employee makes a personal effort that contributes to the efficiency of the Government, consistent with these laws. In so concluding, the Arbitrator disagreed with the Agency that these laws require it to condition time-off awards on "level of performance rather than mere work[.]" Id. at 13.
The Arbitrator also rejected the Agency's claim that Art. 18, Sec. 4(B) of the parties' 2002 national agreement precludes bargaining over the Union's time-off awards proposal because under that provision, time-off awards must be based on performance. In this regard, the Arbitrator interpreted the words "on the basis of their performance" to mean that an employee must "do some act" to receive a time-off award, "not that the act has to be at a certain level of performance." Id. at 13-14.
According to the Arbitrator, the parties' national agreement for the 2003 filing season requires them to retain local agreements that have not been modified. The Arbitrator found that the parties' 2001 and 2002 local MOUs authorizing time-off awards for volunteers "remained in effect, as those provisions were never modified" during local negotiations for the 2003 filing season. Id. at 15. Therefore, he concluded that the Agency was obligated to provide time-off awards to volunteers until it successfully negotiates a modification or change to the local MOUs. Based on the foregoing, the Arbitrator found that the Agency repudiated the parties' national agreement for the 2003 filing season, in violation of § 7116(a)(1) and (5) of the Federal Service Labor-Management Relations Statute, when it implemented the 2003 local MOUs without the time-off awards provision.
The Agency filed exceptions to the Arbitrator's award contending, as relevant here, that the award violated 5 U.S.C. § 4502(e) and 5 C.F.R. § 451.104(a).
III. Authority's Decision In IRS
The Authority reviewed the Arbitrator's award de novo to determine the award's consistency with 5 U.S.C. § 4502(e) and 5 C.F.R. § 451.104(a)(1). The Authority stated that these laws permit agencies to grant employees time off from duty "in recognition of superior accomplishment or other personal effort that contributes to the quality, efficiency, or economy of Government operations." IRS, 61 FLRA at 170. Relying on NAGE, Local R1-109, 53 FLRA 271, 273 (1997) , the Authority found that time-off awards granted under these provisions must be based on employees' "performance or activity" that "contribute[s] to the efficiency, economy, or other improvement of Government operations." Id. at 171. The Authority also found that less than minimally successful performance does not contribute to the efficiency, economy, or Government operations.
According to the Authority, the Arbitrator found that volunteers were entitled to time-off awards and [ v62 p58 ] "[h]e did not limit that entitlement to employees who were performing at any particular level." Id. Thus, the Authority found that "the Arbitrator directed time-off awards without regard to whether the employees' performance contributes to the efficiency, economy, or other improvement of Government operations." Id. Based on the foregoing, the Authority held that the award was inconsistent with § 4502(e) and § 451.104(a), and the Authority set aside the award.
IV. Court's Decision
The court disagreed with the Authority's reading of the award as directing the Agency "to award time off without regard to an employee's actual performance and thus potentially in the absence of any contribution to the efficiency, economy or improvement of Government operations." NTEU, 466 F.3d at 1081. According to the court, the Arbitrator "made no finding whether the agreements contemplated time-off awards when an employee's performance was less than minimally successful." Id.
The court stated that "the agreements, on their face, [do not] resolve the question of awards to underperforming individuals" because "[t]he text makes no explicit mention of performance, stating only that `all volunteers who are utilized' will get time off." Id. at 1081-82. According to the court, the term "utilized" may or may not impose a minimum performance threshold and "the record contains arguably contradictory evidence about the parties' contemporaneous understanding of the MOUs." Id. at 1082. Therefore, the court stated that the agreements contain "textual ambiguities[.]" Id. According to the court, "the Authority did not address the MOUs' textual ambiguities or offer any independent interpretation of the agreements." Id. The court explained that it is "not in a position to resolve factual disputes or to decide whether the evidence can in fact be reconciled (insofar as it controls the outcome)." Id. Accordingly, the court vacated the Authority's decision and remanded the case for further proceedings.
V. Analysis and Conclusions
The court rejected the Authority's finding that the award requires the Agency to grant time off to employees with less than minimally successful performance because the Arbitrator "made no finding whether the agreements contemplated time-off awards when an employee's performance was less than minimally successful." NTEU, 466 F.3d at 1081. The court further found that neither the text of the written agreements nor the record evidence regarding the parties' contemporaneous understanding resolves the question of whether the parties' MOUs require time-off awards for underperforming employees.
The court held that the applicable MOUs are ambiguous inasmuch as they require the Agency to grant a time-off award to "all volunteers who are utilized" without specifically referring to performance. See JE 13b at 4 and JE 32. According to the court, the term "utilized" may or may not "impose a minimum performance threshold[.]" NTEU, 466 F.3d at 1082. The Arbitrator did not interpret the phrase "all volunteers who are utilized."
In addition, the court pointed out that the record contains conflicting testimony regarding the parties' contemporaneous understanding of whether the provision requires the Agency to give time-off awards to volunteers with less than minimally successful performance. The Union's witness testified that, during national negotiations, the Union intended time-off awards to be given to volunteers that did "the work that was asked of them at a fully successful level." Lovett testimony at 140 (Aug. 31, 2004). However, when asked whether the Union ever told the Agency, during local negotiations, that "management would have the discretion to withhold time-off awards from volunteers based on the employee's performance[,]" Lovett replied "No." Id. at 139 (Sept. 1, 2004). Moreover, the Agency's witness testified that during national negotiations, the Union would not agree to expressly condition time-off awards on "successful performance[.]" Canning testimony at 59 (Sept. 1, 2004). Another Agency witness testified that the parties "didn't talk about performance" when they negotiated the 2001 MOUs but claimed that in subsequent local negotiations, the Agency advised the Union that it would not agree to "mandatory awards." Wolfson testimony at 35; 12 (Sept. 1, 2004).
In sum, the court found that neither the text of the parties' MOUs nor the record evidence resolves the "ambiguities" it perceived within the parties' agreements. Thus, consistent with the court's conclusions, we are unable to resolve the Agency's exceptions to the award based on this record. Accordingly, consistent with Authority precedent, we remand the award to the parties for resubmission to the Arbitrator, absent settlement, for further proceedings, consistent with the court's opinion in NTEU. See, e.g., Dep't of Health and Human Serv., Soc. Sec. Admin., Balt., Md., 47 FLRA 1167, 1174 (1993) (on remand from the Court of Appeals for the 4th Cir., the Authority remanded an unfair labor practice case to provide parties an opportunity to provide evidence and testimony on the meaning of a provision of a collective bargaining agreement).
The award is remanded for action consistent with this decision.
Footnote # 1 for 62 FLRA No. 16 - Authority's Decision
Footnote # 2 for 62 FLRA No. 16 - Authority's Decision
5 U.S.C. § 4502(e) provides: "The Office of Personnel Management may by regulation permit agencies to grant employees time off from duty, without loss of pay or charge to leave, as an award in recognition of superior accomplishment or other personal effort that contributes to the quality, efficiency, or economy of Government operations." 5 C.F.R. § 451.104(a) provides, in pertinent part: "An agency may grant . . . time-off without charge to leave or loss of pay . . . on the basis of --
(1) A suggestion, invention, superior accomplishment, p