Federal Deposit Insurance Corporation (Agency) and National Treasury Employees Union, Chapter 273 (Union)
[ v62 p356 ]
62 FLRA No. 65
FEDERAL DEPOSIT INSURANCE
NATIONAL TREASURY EMPLOYEES
UNION, CHAPTER 273
March 5, 2008
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 Mei L. Bickner 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 determined that the grievant was entitled to a Corporate Success Award (CSA). For the following reasons, we deny the Agency's exceptions to the award.
II. Background and Arbitrator's Award
In 2002 and 2003 the parties agreed through a Compensation Agreement, a Memorandum of Understanding (MOU), and an Agency Circular, that the Agency would award a CSA to "top contributors" in the Agency and that such awards would be distributed in a "fair and equitable" manner. Award at 3, 6 (citing Compensation Agreement (Agency Exhibit B); FDIC Circular 2420.1 (Agency Exhibit C) and MOU dated March 13, 2003 (Agency Exhibit D). [n1] The parties agreed under the terms of the Compensation Agreement that the "Chairman has sole discretion to set the percentage of bargaining unit employees who will be recognized as top contributors" but that "the percentage of bargaining unit employees to receive the CSA shall be no less than 33 1/3 percent." Exceptions, Attachment B at 2. Pursuant to the Compensation Agreement, the Agency's Chairman determined that CSAs would be given to no more than 33 1/3 percent of all non-executive employees of the Agency. Award at 3, 4. Based upon her performance in 2003, the grievant was nominated by her supervisor to receive a CSA for the 2003 rating year but ultimately failed to receive a CSA. The Union filed a grievance and when the grievance was not resolved, it was submitted to arbitration.
The Arbitrator framed the issue as follows:
Did the Employer violate the collective bargaining agreement and Circular 2420.1 when it did not give a Corporate Success Award (CSA) to the Grievant . . . based on her contributions in 2003?
If so, what is the appropriate remedy?
Award at 2.
In resolving this issue, the Arbitrator noted that when making nominations for a CSA, supervisors are informed through a management memorandum that they are to prepare the CSA and "prioritize and assign a numerical ranking for all nominated employees within [their] span of control." Id. at 4 (citing The Regional Office CSA Nomination Procedures (management memo)). Those nominations, including the numerical rankings, are then forwarded to Field Supervisors for rankings and, thereafter, to the Regional Office Assistant Regional Director (ARD). The ARD then "consolidates and prepares the nomination forms for evaluation by first level review consisting of the ARDs and the Deputy Regional Director" and in so doing, "evaluates each CSA recommendation and prioritizes them by assigning a numerical ranking." Id. The CSA forms are then submitted for a second level of review to the Deputy Regional Director and the Area Director, where the forms may be re-ranked for final approval by the Regional Director. Id. at 4-5.
The Arbitrator found that, in this case, the grievant's immediate supervisor met with four other regional supervisors when making initial determinations as to what ranking to give the grievant and 20 other nominees. Id. at 5. The Arbitrator also found that the supervisors engaged in determining employee rankings even though they had not filled out the CSA nomination forms. Additionally, one of the supervisors became the acting Field Supervisor and served in such capacity at a [ v62 p357 ] meeting of Field Supervisors where the ranking lists were compiled.
Based upon the above, the Arbitrator determined that the Agency failed to comply with FDIC Circular 2420.1. First, the Arbitrator determined that the grievant's nomination form was flawed because it was not written prior to the initial rating meeting and that the process for rating the grievant did not comport with the management memo. Id. at 12-14. Second, the Arbitrator found that the supervisor failed to list additional accomplishments of the grievant in the CSA nomination form. Id. at 14. As such, the Arbitrator determined that the Agency failed to comply with the process of awarding CSAs in a "fair and equitable" manner, as prescribed by FDIC Circular 2420.1. Id. at 15.
Moreover, the Arbitrator determined that the grievant was entitled to a CSA because she had greater accomplishments than another employee who had received a CSA. In particular, the Arbitrator compared the grievant's accomplishments with that of an employee who had received a CSA and found that the grievant's "contributions were more substantial and more deserving of the CSA than at least one comparator who received the award." Id. at 17-18. As such, the Arbitrator ultimately concluded that the Agency violated the parties' collective bargaining agreement and the Circular, "when it did not give a Corporate Success Agreement (CSA) to the [g]rievant . . . based on her contributions in 2003." Id. at 18. The Arbitrator directed the Agency to award the grievant a 2003 CSA and a 3 percent retroactive salary increase from that date.
III. Positions of the Parties
A. Agency's Exceptions
The Agency claims that the award is deficient because it fails to draw its essence from the parties' agreements and because the Arbitrator exceeded his authority. [n2]
The Agency argues that the award fails to draw its essence from the parties' agreements in two respects. First, it contends that the Arbitrator's "findings about the errors of the Agency's CSA procedures are baseless and fail to draw their essence from the negotiated agreements concerning the CSA program." Exceptions at 13. Second, the Agency argues that the Arbitrator's decision to grant a remedy fails to draw its essence from the parties' Compensation Agreement because, by awarding such remedy, the Arbitrator violated the terms of the Compensation Agreement, which states that only 33 1/3 percent of bargaining unit employees may receive a CSA. Exceptions at 8-9.
With regard to the first essence contention, the Agency claims that the Arbitrator improperly relied upon the internal management memo when he found that the Agency had failed to appropriately apply the CSA process. In this respect, it states that "nothing in the negotiated agreements concerning the CSA . . . preclude . . . supervisors from discussing nominees with other supervisors or supervisors jointly ranking award nominees before award nominations are written." Id. at 14. Moreover, the Agency argues that other arbitrators have specifically found it appropriate for supervisors to discuss or jointly rank employees for CSAs prior to writing the award nominations. Id., (citing In the Matter of NTEU and FDIC, FMCS No. 04-57639, May 20, 2005); (In the Matter of Arbitration of FDIC and NTEU, FMCS No. 04-56302-A. October 7, 2005).
Moreover, the Agency claims that the Arbitrator's determination that the "nomination form incorrectly summarized some of the grievant's contributions fails to draw its essence from the negotiated CSA agreements." Exceptions at 15. In this respect, it contends that the space on the nomination forms is limited and that the supervisor would not have been able to include all of the grievant's accomplishments in the space available. Id. at 15-16. Additionally, the Agency contends that the parties' agreements do not preclude the Deputy Regional Directors from forwarding only the names and nomination forms for the 105 employees who were selected as finalists to receive a CSA to the Regional Director. Id. at 17. As such, the Agency argues that the Arbitrator erred in determining that it improperly failed to forward the names of those nominated for a CSA but who did not advance as finalists. Id. at 17-18.
With regard to the second essence contention, the Agency argues that "[b]y requiring the Agency to give this Grievant a CSA award without taking away the CSA from another San Francisco Region DSC [the Division of Supervision and Consumer Protection] bargaining unit employee, the Arbitrator imposed a remedy that on its face is inconsistent with the Compensation Agreement." Id. at 12. In this respect, the Agency argues that the Compensation Agreement caps the number of bargaining unit employees who may receive a CSA at 33 1/3 percent. The Agency contends, therefore, that the award is deficient because "the Arbitrator did not limit the number of CSA recipients to the percentage [ v62 p358 ] the parties negotiated under the Compensation [A]greement." Id.
The Agency also argues that the "Arbitrator exceeded her authority" by awarding the grievant a CSA. Exceptions at 20. In this respect, the Agency argues that by awarding a CSA the Arbitrator exceeded the 33 1/3 percent cap on the number of bargaining unit employees who could receive a CSA. Id. As such, the Agency contends that by exceeding that cap, the award is deficient.
B. Union's Opposition
The Union contends that the award does not fail to draw its essence from the parties' agreements. It argues that the management memo states that "[i]n order to ensure a fair and equitable distribution of the CSA's within the division, DSC will implement the following procedures for nominating employees." Opposition at 13, 14 (citing Union attachment 8) (emphasis in the original). As such, it contends that the Agency was required to adhere to the procedures set forth in the management memo in order to award CSAs in a fair and equitable manner.
Moreover, the Union specifically contends that the Arbitrator was correct in finding that the Agency failed to follow appropriate procedure when supervisors held a meeting to discuss ranking CSA nominees prior to filling out their nomination forms. Additionally, the Union argues that the grievant's supervisor failed to use all the available space on the nominating form to list the grievant's accomplishments and failed to include all relevant accomplishments. Id. at 18, 19. Finally, it argues that the management memo requires the Agency to forward all nomination forms to the Regional Director, not just forms for the finalists. Id. at 21-22 (citing management memo section 7). [n3]
Furthermore, the Union claims that none of the parties' agreements limits an arbitrator's ability to award CSAs. It claims that while no less than 33 1/3 percent of employees are entitled to compensation under the parties' agreements, the decision of the Chairman to not grant additional CSA's was his alone, and not part of the parties' agreements. Id. at 8. Additionally, the Union argues that the make "whole" portion of the parties' collective bargaining agreement specifically allows for the remedy the Arbitrator awarded and that "arbitrators have great latitude in fashioning remedies for contract violations." Id. at 8-9 (citing NTEU, Chapter 68, 57 FLRA 256 (2001); Article 48, Sec 4(B) of the parties' collective bargaining agreement (stating that "[t]he arbitrator will have the authority to make an aggrieved employee whole to the extent such remedy is not limited by law")).
Finally, the Union argues that the Arbitrator did not exceed her authority by granting the grievant a CSA. The Union contends that the Arbitrator is free to make the grievant "whole" and did this by granting the CSA. Opposition at 6.
IV. Analysis and Conclusion
A. The Award does not Fail to Draw its Essence from the Parties' Agreement.
In reviewing an arbitrator's interpretation of a collective bargaining agreement, the Statute provides that the Authority apply the deferential standard of review that Federal courts use in reviewing arbitration awards in the private sector. See 5 U.S.C. § 7122(a)(2). Under this standard, the Authority will find that an arbitration award is deficient as failing to draw its essence from the collective bargaining agreement when the appealing party establishes that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990). The Authority and the courts defer to arbitrators in this context because it is the arbitrator's construction of the agreement for which the parties have bargained. Id. at 576.
The Agency asserts that the Arbitrator's award fails to draw its essence from the parties' agreements in two respects. First, it argues that the Arbitrator's finding that the Agency failed to process the grievant's CSA nomination form in a "fair and equitable" manner is deficient because the management memo did not require it to process such forms in the manner found by the Arbitrator. Second, it argues that the Compensation Agreement sets the maximum number of CSAs which can be awarded at 33 1/3 percent and that the Arbitrator's award, by allowing for an additional CSA, is contrary to the Compensation Agreement.
The Agency's claims can be addressed together, as both constitute matters of contract interpretation to which we defer to the Arbitrator. In this respect, the [ v62 p359 ] term "fair and equitable" is not defined in the parties' Circular or MOU and the Agency provides no basis to conclude that the Arbitrator was constrained in his interpretation of the term. See FDIC Circular 2420.1 (Agency Exhibit C); MOU (Agency Exhibit D). As such, the Arbitrator's conclusion that the process used by the Agency in evaluating the grievant's nomination for a CSA was neither "fair" nor "equitable" under either the Circular or the MOU is not, as the Agency argues, deficient.
Similarly, the Agency's argument that the award impermissibly allows the number of CSAs distributed to exceed what it believes to be a 33 1/3 percent cap on the number of bargaining unit employees eligible to receive a CSA, must fail. The Compensation Agreement provides that "[t]he Chairman has sole discretion to set the percentage of bargaining unit employees who will be recognized as top contributors under the CSA program[,]" so long as that percentage does not fall below 33 1/3 percent. Exceptions, Attachment B at 2. This is a minimum, not a maximum, as argued by the Agency. While the Chairman determined that no more than 33 1/3 percent of bargaining unit employees could receive CSAs, awarding a CSA to the grievant does not preclude the Agency from taking other actions to ensure that the CSA award would comply with the requirements of the Compensation Agreement. Accordingly, the Agency has failed to show that the award is deficient on essence grounds.
B. The Arbitrator did not Exceed her Authority.
An arbitrator exceeds his or her authority when the arbitrator fails to resolve an issue submitted to arbitration, resolves an issue not submitted to arbitration, disregards specific limitations on his or her authority, or awards relief to persons who are not encompassed within the grievance. See AFGE, Local 1617, 51 FLRA 1645, 1647 (1996). When the parties fail to stipulate the issues, the arbitrator may formulate them on the basis of the subject matter of the grievance. See United States Dep't of Def., Educ. Activity, Arlington, Va., 56 FLRA 887, 891 (2000) (citations omitted).
The Agency claims that the 33 1/3 percent cap on the number bargaining unit employees that can receive CSAs limits the Arbitrator's ability to grant a CSA to the grievant. However, as noted above, the award does not preclude the Agency from taking any action it deems necessary to comply with the Compensation Agreement. Accordingly, the Agency has failed to show that the Arbitrator exceeded her authority and we deny the Agency's exception.
The Agency's exceptions are denied.
Circular 2420.1 - FDIC Rewards and Recognition Program
Chapter 11 - Corporate Success Awards
The Corporate Success Award is an annual award that provides for a 3.0 percent increase in basic pay (in addition to the annual pay adjustment) for those employees who are recognized as the top contributors within the Corporation. The purpose of this award is to recognize an employee's individual initiative, exceptional effort and/or achievements that reflect important contributions to the Corporation and/or its organizational components. Employee recognized with this award will have made important contributions that are within the scope of the employee's job, such contributions must reflect initiative, effort or achievement beyond that normally expected from an employee in that position and grade. . . . Corporate Success Awards shall be distributed to employees in a fair and equitable manner.
Award at 6.
Memorandum of Understanding Between FDIC & NTEU
1. CSAs will be