DEPARTMENT OF COMMERCE PATENT AND TRADEMARK OFFICE ARLINGTON, VIRGINIA and PATENT OFFICE PROFESSIONAL ASSOCIATION

United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

In the Matter of

DEPARTMENT OF COMMERCE

PATENT AND TRADEMARK OFFICE

ARLINGTON, VIRGINIA

Case No. 00 FSIP 55

and

PATENT OFFICE PROFESSIONAL

  ASSOCIATION

DECISION AND ORDER

    The Patent Office Professional Association (Union or POPA) filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under section 7119 of the Federal Service Labor-Management Relations Statute between it and the Department of Commerce (DOC), Patent and Trademark Office, Arlington, Virginia (Employer or PTO).

    After investigation of the request for assistance, the Panel asserted jurisdiction and directed the parties to resume negotiations, over a 45-day period, under the direction of the Federal Mediation and Conciliation Service, concerning their dispute over the Employer’s decision to implement conflict of interest rules and financial disclosure filing requirements affecting unit employees.(1) Following the resumed negotiations, the parties were jointly to provide a status report regarding the results of the mediation efforts, including the parties’ final offers, after which the Panel would take whatever action it deemed appropriate with respect to the matter. During the resumed negotiations, the parties were able to agree on one provision. Subsequently, the Panel directed the parties to present the dispute to a private factfinder of their choice, who was given the authority to conduct a hearing and issue a report and recommendations for settlement, with supporting rationale, to the parties and the Panel.

    The parties selected Factfinder Michael Fischetti, and factfinding hearings were conducted on September 12, 14, 26, 27, 28, and 29, 2000. A stenographic record was made, testimony and argument were presented, and documentary evidence was received. A Factfinding Report and Recommendations (FR&R) was submitted by the Factfinder to the parties and the Panel on November 14, 2000. The FR&R is attached hereto. Thereafter, in accordance with the Panel’s regulations, on December 14, 2000, the parties notified the Panel of their respective responses to the FR&R. In this regard, the Union notified the Panel that it accepted the Factfinder’s recommendations, while the Employer stated that it could accept only some of the recommendations.(2) Because the recommendations did not provide a basis for settling the entire dispute, and the rationale provided in the FR&R in many cases did not sufficiently explain the underlying merits of the provisions being recommended, the parties submitted supplemental briefs to address the Panel’s concerns. The parties also met with the undersigned on May 1, 2001, in the Panel’s offices to clarify any issues prior to the submission of the dispute to the Panel for final resolution. The Panel has now considered the entire record, including the Factfinder’s recommendations, the parties’ initial responses and supplemental briefs, and transcripts of the hearings.

BACKGROUND

    The Employer’s mission is to issue patents and register trademarks. The Union is the exclusive representative of a bargaining unit of approximately 3,200 professional employees in pay grades GS-5 through -15, most of whom are patent examiners. The unit also includes reference librarians and classifiers. The parties have different views regarding whether they are covered by a master collective bargaining agreement.

    The parties are at impasse over all or parts of six sections in an agreement that would result from their negotiations over the Employer’s decision to implement conflict of interest rules and financial disclosure filing requirements. The major subjects over which they disagree are: I. § C. Education (generally, the degree to which the Employer should provide training beyond what is required in the applicable Government-wide regulations issued by the OGE, 5 C.F.R. Ch. XVI); II. § D. Substantive Rules (generally, who should be required to file a Confidential Financial Disclosure (CFD) Form, and how employee requests for guidance should be handled); III. § E. Definition of Technological Areas (whether a committee should be established to hear appeals of the Employer’s definitions of an employee’s technological area and, if so, what criteria the committee should apply in evaluating such appeals); IV. § F. Appropriate Arrangements for Alleged Conflicts of Interest (essentially, whether the Employer should be restricted in the remedies it may pursue where it has determined that an employee has a potential or actual conflict of interest); V. § G. Procedures for Divestiture (the procedures the Employer should follow where it has decided to require an employee to divest existing assets); and VI. § H. Rights to Information (the type of information the Employer should maintain and make available to employees and the Union regarding compliance with conflict of interest rules and financial disclosure requirements).

PRELIMINARY MATTERS

    Preliminarily, the Employer consistently has raised a generic duty-to-bargain argument during all stages in the Panel’s processing of this case which applies to a number of the Union’s proposals, and the Factfinder’s subsequent recommendations insofar as they contain similar or identical wording.(3) More specifically, the Employer essentially contends that the OGE regulations confer "sole and exclusive authority" to agencies when implementing their various requirements. In its view, because the Employer has no obligation to negotiate over Union proposals or Factfinder recommendations which are inconsistent with the sole and exclusive discretion the regulations confer upon agencies, such proposals and/or recommendations should be rejected by the Panel. To support its position, the Employer cites OGE Guidance Memorandum DO-99-014, dated April 12, 1999.(4)

    In general, in Commander, Carswell Air Force Base, Texas and American Federation of Government Employees, Local 1364, 31 FLRA 620 (1988)(Carswell) and U.S. Department of the Interior, Bureau of Reclamation, Lower Colorado Region, Yuma, Arizona and National Federation of Federal Employees, Local 1487, 41 FLRA 3 (1991)(Bureau of Reclamation), the Federal Labor Relations Authority (FLRA) established the obligations and limitations relating to the Panel’s authority to resolve impasses where duty-to-bargain issues are raised.(5) In this regard, the FLRA determined in Patent Office Professional Association and U.S. Department of Commerce, Patent and Trademark Office, 53 FLRA 625 (1997)(POPA and PTO), that most of Union proposal’s (and the Factfinder’s subsequent recommendations, insofar as they contain similar or identical wording) currently before the Panel in this case are negotiable. Consistent with the guidance contained in Carswell and Bureau of Reclamation, we conclude that the Employer’s argument that the OGE regulations confer "sole and exclusive authority" to agencies when implementing their various requirements provides no basis for rejecting either the Union’s proposals or the Factfinder’s recommendations.(6) Consequently, the Employer’s generic duty-to-bargain argument will not be addressed further herein. Accordingly, we will proceed to the merits of the dispute.

I. § C. Education

1. The Union’s Position

    The Panel should adopt the following wording to resolve the parties’ dispute over the remaining portions of § C.:

C.1.: (i) The Office shall provide at least yearly ethics training to all bargaining-unit employees in accordance with 5 C.F.R. Part 2638.701 et seq.; (ii) At the time the Office makes an offer to a candidate for a bargaining-unit position, the Office will provide an OGE Form 450 that the candidate may complete and mail to the OGC if they accept the job offer. If the candidate fills out the form, OGC will promptly review the Form 450 and, if they identify any potential conflicts of interest, notify the candidate of the results.(7)

C.2.: Live ethics training will be offered once per year for all second year employees and GS-11 employees. All other bargaining-unit employees will be offered live ethics training every three years.

Preliminarily, § C.1.(i) and 2. were both recommended by the Factfinder, who "had the opportunity to observe the demeanor of the witnesses, and the demeanor of the advocates through whom many material facts were established." As with all of the Factfinder’s recommendations, "in the absence of extremely compelling evidence to the contrary," they "must be allowed to stand."(8) In addition, the Employer stated that it did not object to § C.1.(i) in its December 14, 2000, written response to the Panel.

    These provisions also should be adopted because they would expand yearly ethics training from the "minimum that is required of the Agency by the rules" to include yearly training for the entire bargaining unit, i.e., lower graded employees who are not required to file a CFD form. Expanding upon the minimum requirements under the regulations could "prevent situations that create problems for employees and potentially embarrass the agency." Ethics training that all new hires receive within the first 90 days of employment, on the other hand, may be inadequate because it is combined with training on many other types of issues. Moreover, as examiners go up in grade they have more income to invest, so yearly training on the ethics requirements becomes more pertinent. In this regard, § C.2. builds on the requirements of § C.1. by specifying that ethics training for all second year employees and GS-11 employees be live, which may be a more effective way to explain the complexities of the regulations. Since second-year employees often are GS-11s, the provision would apply to fewer people than might be apparent. Contrary to the Employer’s contention, the live yearly training that would be required "is very inexpensive to provide." Management could meet the intent of the wording by scheduling training once per year in a large auditorium.

    The adoption of the Union’s additional wording in § C.1.(ii) could avoid undue hardship for candidates that initially accept PTO job offers by permitting them to reverse their decision if they are apprized by the Office of General Counsel (OGC) that a potential conflict of interest may exist should they work in a particular examining art. Its adoption also would implement "the Congressionally desired scheme for evaluating conflicts of interest." The Employer’s argument that "it does not have the resources to provide an individual review of new hires" should be rejected. In balancing management’s interests in conserving its resources against the potential adverse impact on an employee, "it seems obvious" that the employee’s interests should outweigh those of management. Finally, the inclusion of wording requiring the OGC to "promptly review" CFD Form 450 is necessary because it sometimes takes months for that office to respond to employees’ requests for ethics opinions.

2. The Employer’s Position

    The Panel should reject the Factfinder’s recommendation, as well as § C.1.(ii), "because the Union has presented no evidence to show that they are warranted." While it is true that the Employer initially agreed to accept the Factfinder’s recommendation on § C.1., it believed it would only be required to comply with the training requirements specified in the regulations. Subsequent discussions established that the Union interpreted the wording as requiring yearly ethics training for employees who do not file annual CFD forms. This, as well as the other disputed items under this section, go well beyond what the current regulations provide or, for that matter, what is necessary "to educate the intended audience."

    Adoption of the provisions also would be administratively burdensome. Among other things, § C.2. would "require live training sessions throughout the year as employees are promoted or hired." Such a requirement is unnecessary because all new employees receive ethics training within 1 month of entry into service, and training is provided annually for all filers, with live sessions given every 3 years to filers. Moreover, there are many unit employees who would never be required to file financial disclosure forms (e.g., librarians) that nevertheless would receive training under the recommended wording. Specifically as to § C.1.(ii), it "was not even mentioned in the [FR&R]." The proposed wording is "flawed" for a number of reasons, among them, because "ethics determinations cannot be made on hypothetical facts present before employment." The proposal "amounts to a useless exercise at significant Agency expense."

CONCLUSIONS

    We turn first to the Union’s contention that unless there is "extremely compelling evidence" to the contrary, the Factfinder’s recommendations regarding all of the disputed issues in this case, including those in § C., should be adopted. For the reasons stated by the Union, deference normally is accorded to a factfinder’s recommendations, regardless of whether the factfinder is a Panel representative or, as here, a private individual. In our view, however, the degree of deference to be accorded is dependent upon our ability to discern from a factfinder’s supporting rationale the basis of the recommendations. Among other things, this could involve an explanation of the practical workplace problem the adoption of the wording is intended to address, and the factors, such as the evidence presented during the hearing, that the factfinder found persuasive in reaching his conclusions. A thorough understanding of the merits of the recommendations is particularly important in the circumstances of this case, which involves issues of first impression for the Panel. Unfortunately, the FR&R only contains clearly and thoroughly articulated rationale regarding the underlying merits of the recommendations in a few instances. Accordingly, post-FR&R written submissions were solicited from the parties so that the Panel could fully discharge its independent responsibilities in evaluating the underlying merits of the parties’ proposals and/or positions.

    Having carefully considered the entire record concerning § C., including the FR&R, the relevant portions of the transcript, and the arguments and evidence presented by the parties, we shall order the Union to withdraw its proposals. In our view, the administrative burdens their adoption would entail, even as interpreted by the Union, outweigh the benefits that would be provided to employees. If adopted, annual training would be given to hundreds of employees who are not required to submit CFD forms, as well as to others who may never have to file such forms at all. The benefits to employees, on the other hand, are primarily based on speculation as to how training beyond what is currently mandated by the ethics regulations would prevent situations that cause problems for employees and the Agency. There is no evidence, however, that any of the 58 instances in the past year where the OGC has identified potential conflicts of interest among unit employees could have been avoided by a better understanding of the ethics rules. The Union, therefore, has failed to demonstrate the need to change the status quo which prevails not only at the PTO, but throughout the Federal government. Similar concerns apply to the additional wording proposed by the Union under § C.1., where the parties have already agreed to provide prospective employees with a booklet summarizing the ethics rules, and candidates for employment may receive personal guidance regarding their ethics inquiries from the OGC.

II. § D. Substantive Rules

1. The Union’s Position

    The Panel should order the adoption of the following wording, as recommended by the Factfinder:

D.4.: E-mail may be used for communication with the prior permission of the employee.

D.7.: (i) The Office hereby determines that the duties of patent examiner positions which are below GS-13, below GS-12 for design examiners, are positions at such a low level of responsibility that the submission of a CFD statement is unnecessary because of the substantial degree of supervision and review over these positions; (ii) The Office hereby determines that the following POPA bargaining unit employees will not be required to file the Form 450 unless procurement activity or contract supervision requires otherwise: All classifiers regardless of grade except those who are actively examining patent applications; all librarians regardless of grade; and all employees of the Scientific Technical Information Center.

D.9.: Employees should request guidance from the DAEO in writing. The written request for guidance should contain all the relevant and correct information regarding the potential conflict of interest. The DAEO will acknowledge receipt of a written request for guidance as soon as possible, usually within five (5) business days, and will, if necessary, discuss a time frame for a final written decision. Final decisions will be written upon a written request by the employee. The employee's written request and the DAEO written decision may be via e-mail, unless the employee requests a more private form of communication. Decisions and opinions of the DAEO will be effective from the time they are first communicated to the employee. The DAEO will keep records of their decisions.

It also should impose the following wording, which was rejected by the Factfinder:

D.6.: If management assigns a case or project to an employee that would conflict with any holding listed in the employee’s most recently filed financial disclosure statement, management shall, upon the employee’s written request, provide a detailed written explanation of why the case or project must be assigned to the employee, and why any alternative assignment suggested by the employee would not be feasible.

§ D.4. would protect "the privacy of employees who feel that the e-mail system used by the Agency is too insecure" to transmit "very sensitive" financial information. As established by testimony provided at the hearing, management also has the capability of diverting e-mail sent to an employee "to a central location for review." Nor does the wording prevent management from using e-mail altogether, but merely requires the employee’s permission. Its adoption would "demonstrate the Agency’s respect for the privacy of confidential personal financial information" and "engender confidence in and cooperation with ethics officials." Although the Employer relies on a particular FLRA case to support its contention that the provision interferes with its right to determine the methods and means of performing work, under § 7106(b)(1) of the Statute, that case "does not involve any privacy interests on the part of employees." Rather, the provision is a fully negotiable appropriate arrangement under § 7106(b)(3), and is "similar in concept" to a proposal found to be negotiable by the FLRA.(9)

    The Employer’s principal objection to § D.7. is that it violates the agency’s "sole and exclusive authority" to determine which employees are required to file financial disclosure forms and comply with the ethics rules. Not only did the FLRA determine in POPA and PTO that a "substantially similar" proposal was negotiable but, contrary to the Employer’s contention, § D.7. "is intended to specify who is not required to file." Moreover, "there is no question that none of the employees specified in this section have ever been required to file" CFD forms.

    § D.9. would ensure that employees receive timely guidance from the OGC concerning situations or investments that could be potential conflicts of interest, and is consistent with the regulatory obligation to provide advice to employees. The provision is necessary because Agency ethics officials "do not have a good reputation for timely responses." In this connection, the Chief of the Ethics Division in the OGC admitted during the factfinding hearing that 5 days "seemed reasonable." The Employer is simply incorrect in interpreting the sentence "decisions and opinions of the DAEO will be effective from the time they are first communicated to the employee," as shielding employees from the consequences of impermissible conduct until the Agency ethics official states otherwise.

    The proposed wording in § D.6. was actually offered by the Employer at some point during the parties’ negotiations. Requiring management to supply a written explanation of why a case or project could not be assigned to someone else would force it to provide more serious and thoughtful consideration of the matter. Given the adverse impact on an employee if the OGC directs the divestiture of financial holdings, its adoption appropriately ensures an additional measure of protection from unnecessary management decisions. Contrary to the Employer’s contention, it would not impose an unreasonable burden on management.

2. The Employer’s Position

    Regarding § D.4., the Employer proposes that "e-mail or other appropriate means may be used for communication with employees." With respect to the Factfinder’s recommendation on § D.7. and 9., as well as the Union’s proposed § D.6., the Employer objects to their inclusion in the parties’ agreement. § D.4. interferes with management’s right to determine the methods and means of performing work."(10) Even if the Panel had jurisdiction over the issue, "the Union’s position should be rejected on the merits" because the Factfinder gave no explanation for why he recommended it. The Union’s "alarmist position, unsupported by the facts," that management would intentionally divert e-mails to a central location for review "is absurd." E-mail "is an accepted form of communication in contemporary society" and should be welcomed by the Union if it is "indeed concerned with the timeliness of ethics advice."

    With respect to § D.7., "no basis exists in fact or in law for changing the well-established ethics rules applicable to agencies and government employees" by permitting the Union to dictate "which employees are required to file" CFD forms. As to § D.9., the second to last sentence "is inconsistent with 5 C.F.R. § 2635.107(b)" and, therefore, contrary to Government-wide ethics regulations, "by suggesting that conduct otherwise prohibited is permissible until the DAEO says otherwise." In addition, including § D.9. in the parties’ agreement would impose a "substantial burden" on the OGC, as established by the Chief of the Ethics Division when he testified that the requirements of the proposal "would seriously impact his ability to provide ethics counseling to employees in a timely fashion."

CONCLUSIONS

    After careful review of the outstanding items in § D., we are persuaded that compromise wording should be imposed to resolve the parties’ dispute. With respect to § D.4., there is no evidence in the record supporting the Union’s concern that the Employer would use existing technology to divert confidential financial information to a central location for review, or that the Agency previously has failed to respect employee privacy interests regarding such information. Therefore, we shall order the adoption of the Employer’s proposal, whereby management’s discretion to use such a widely-accepted form of communication as e-mail would not be unjustifiably limited.(11) As to the Union’s proposed § D.6., the Factfinder found "no compelling basis on the record" to incorporate the wording into the parties’ agreement. In this regard, management’s witnesses testified that, as a practical matter, the work would almost always be transferred to someone else if it would conflict with any holding listed in the employee’s most recently filed financial disclosure statement. We see no reason to disturb the Factfinder’s recommendation in an instance where he provided sufficient justification for rejecting the Union’s proposal. Accordingly, we shall order the Union to withdraw its proposal in this subsection.

    Overall, § D.7. appears to represent the Employer’s current practices with respect to which positions are not required to file a CFD form. While imposing § D.7. would prevent the Employer from requiring employees occupying the identified positions to file such forms while the agreement is in effect, the OGC has already exercised its best judgement at least once in identifying such positions. Moreover, the Employer does not argue that it is actively considering changing its previous decisions concerning which positions to exclude from the filing requirements. Since the Employer’s concerns appear to be theoretical, we shall order the adoption of the Factfinder’s recommendation in § D.7. Finally, for the most part § D.9. sets forth reasonable procedures for employees and management to follow which are fully consistent with the requirements of the ethics regulations concerning employee requests for guidance. In our view, the procedures outlined in the subsection would only be burdensome if the Employer is flooded with such requests, which seems unlikely. The meaning of the sentence stating that "decisions and opinions of the DAEO will be effective from the time they are first communicated to the employee," however, is unclear. Because this could lead to future disputes between the parties, it shall be eliminated from our Order adopting the remaining portions of the Factfinder’s recommendation in § D.9.

III. § E. Definition of Technological Areas

1. The Union’s Position

    The Panel should impose the Factfinder’s recommendation in its entirety on § E., which is as follows:

E.2.: (i) A committee will be established to hear appeals if an examiner disagrees with the definition of his/her technological area or a particular company's designation in a technological area. The appeals committee will gather the information necessary to apply the standards set forth in subsections (ii) to (iv) below. Past practice within the art unit will not be precedential since any one examiner may not be concerned with this issue. The appeals committee will issue a written decision which shall be precedential to the extent circumstances have not changed; (ii) The fact that a company has fewer than twelve (12) patents issued in a technological area in the most recent eight (8) years, is prima facie evidence that such company is not within that technological area; (iii) If an examiner has not acted on any application from a company in the past two years, this will be considered prima facie evidence that the company is not in the examiner's technological area; (iv) Prima facie evidence of an examiner's technological area will be the cases that the examiner has acted on in the past year; (v) When making an allegation that a particular company is in an examiner's technological area, management will cite at least one patent application that the examiner has acted upon in the last year or one patent application that is docketed to the examiner that will have a direct and predictable impact on the company; (vi) In applying the standards set forth in (ii) to (v) above, it is understood that other relevant data may be applied in any individual case if the evidence shows that it is warranted.

E.3.: Management shall provide each examiner with a list of six digit Standard Industry Classification (SIC) codes for the examiners assigned technological area or with a particular company's designation in a technological area. Management shall yearly identify all companies that fall within the identified SIC codes within each technological area for companies listed on the New York Stock Exchange, the American Stock Exchange or the NASDAQ Market.

E.4.: (i) A committee will be established to hear appeals if an examiner disagrees with the designated SIC codes for the examiner's assigned technological area or with a particular company's designation in a technological area. The appeals committee will gather the information necessary to apply the standards set forth in subsection (ii) and (iii) below. Past practice in the art unit will not be precedential since any one examiner may not be concerned with this issue. The appeals committee shall issue a written decision which shall be precedential to the extent circumstances have not changed; (ii) The fact that a company's total patents classified in a particular class are less than 1 % of its total patent portfolio and less than 1 % of the total patents classified in that class will be prima facie evidence that such company is not within the technological area defined by/encompassed by that class; (iii) A company shall be deemed to be within a technological area if 10% or more of the company's revenue is generated by activities within the technological area. Revenue of less than 10% will be prima facie evidence that such company is not within the technological area; (iv) In applying the classifications as set forth in (ii) and (iii) above, it is understood that the SIC codes are being used as a guide, and that other relevant data can be taken into consideration if the evidence shows that it is warranted.

Overall, adoption of the Factfinder’s recommendation would establish alternative, but compatible, methods for a joint labor-management appeals committee to evaluate an employee’s objection at having been placed into a technological area by the Agency, or of a particular company’s designation in a technological area. Its adoption is warranted because placement in a technological area could have a significant affect on the scope of an employee’s prohibited financial interests. The Employer’s decisions regarding what entities an examiner may not have a financial interest in should be based on objective criteria and consistently applied to all examiners, rather than being based on the whim of the Agency ethics officer. The criteria identified in § E.2. were developed "in light of the experience of how the [OGC] dealt with the potential conflicts of one" of its witnesses, and are "set forth as guidelines rather than immutable rules." While the Employer "complains" that the Union was willing to withdraw § E.4. during the hearing, the "offer was made in the context of a proposal to substitute" § E.2. for § E.4. because "it is likely to be useful in more situations." As the Factfinder recommended, however, "the best situation is to use all of the information available."

    The Employer’s main problem with the use of SIC Codes is that "it will require it to do work," i.e., provide lists of codes which it has never used before. As the Factfinder explained, SIC Codes would "offer a patent examiner a viable method of identifying companies that may pose a potential conflict of interest in his or her art unit." Moreover, the Employer’s allegation that § E.2. "calls for a blanket determination" is untrue, given the wording in § E.2.(vi) which specifies that in applying the standards, "other relevant data may be applied in any individual case if the evidence shows that it is warranted." Finally, the Employer’s contention that "the appropriate remedy for an employee to challenge an improper allegation of a conflict of interest is the grievance procedure" is flawed. Among other things, "many of our grievances take years to resolve" while financial decisions, "including the divestiture of stock, require faster decisions" which the Factfinder’s recommendation would provide.

2. The Employer’s Position

    The Factfinder’s recommendation on this section "should be rejected because it incorporates an unworkable scheme that fails to provide employees with an understandable method for determining when a conflict of interest arises." Not only did he decide to include the proposals in his recommendation after concluding they would not work, but "even more perplexing," they were adopted "in the aggregate even though the Union viewed these proposals as alternatives." If they are imposed by the Panel "they will lead only to endless disagreement and litigation."

    In addition to being "absurd," § E.2, 3., and 4. attempt to define a conflict of interest, a task that the OGE has determined is a matter within the sole and exclusive discretion of the Employer, by creating "an adversarial system for determining ethics violations." § E.3. and 4. are particularly "flawed and unworkable." Contrary to Federal law, they place the burden of avoiding any conflict of interest on the Agency, rather than on employees, by imposing "two schemes" where the Agency would have to identify investments that create conflicts of interest. The first scheme, which requires the use of SIC Codes, was admitted by the Union and the Factfinder during the hearing to be difficult to apply in determining what companies employees would be allowed to invest in. Any system that rejects the current ethics rules, especially where the current system has not clearly been shown to be deficient, "should at least be workable as a threshold matter." Finally, the current system for reviewing ethics forms "has revealed few instances of a potential conflict of interest," and "none of these proposals will give the intended guidance for determining when a conflict of interest arises."

CONCLUSIONS

    Having thoroughly reviewed the parties’ dispute under this section, we conclude that their impasse should be resolved on the basis of a modified version of the Factfinder’s recommendations. In our opinion, the Factfinder’s recommended wording is intended to ensure that the Employer’s decisions regarding the entities an examiner may not have a financial interest in are based on objective criteria consistently applied to all examiners. Although the interest which underlies the recommendation appears to be legitimate, we are persuaded that as written it contains certain defects which must be corrected if the committee approach is to be effective. In this regard, we believe that the labor-management committee it establishes should be integrated into the framework the parties have already established under § E.1.(12) In addition, the charge of the committee and its membership must be clarified to avoid future disagreements between the parties, and to comport with the FLRA’s decision in POPA and PTO.(13) Accordingly, we shall order the adoption of wording consistent with the rationale provided above.

IV. § F. Appropriate Arrangements for Alleged Conflicts of Interest

1. The Union’s Position

    In addition to the provisions recommended by the Factfinder, § F.4. also should be imposed on the parties by the Panel. In its entirety, § F should read as follows:

F.1.: When a potential conflict of interest arises under E(5) above, the following procedure will be used:

 

(i) When an examiner has a compelling pre-existing financial interest that would be adversely affected by an Office-initiated change in work assignment pursuant to E(5) above, management shall not generally make the transfer or the change referred to above, unless there is no other qualified examiner available to do the work. The bargaining unit employee may appeal to the Office for reconsideration of the proposed change. Among other things to be considered are (1) needs of the Office, (2) expertise of the bargaining unit employee, and (c) the degree of adverse financial impact on the bargaining unit employee. 

Typical examples of compelling financial interest are spousal employment, significant illiquid assets and significant interests in the business of a relative. To be considered compelling the financial interest must rise to a level analogous to the examples above.

(ii) Where an examiner has a significant pre-existing financial interest that would be adversely affected by the Office-initiated change in work assignment pursuant to E(5) above, the examiner may appeal to the Office for reconsideration of the proposed change. The appeal will balance the expertise of the examiners involved, management's needs in distributing work assignments and the degree of adverse financial impact on each examiner involved. A written decision will be rendered before the employee will be required to take any action regarding his or her financial interests.
A typical example of a significant pre-existing financial interest is an asset that exceeds 30% of the bargaining unit employee's gross annual salary, but, in accordance with the law, any amount exceeding $5,000.00 could be regarded as potentially requiring possible divestiture.

F.2.: (i) In the event that an application is assigned to an examiner that is not typical of those found in the assigned technological area, recusal or waiver, at the sole discretion of management, will be the remedy for any possible conflicts of interest based on the examiner's pre-existing financial interests; (ii) In the event temporary transfers of work create a conflict of interest based on an examiner's pre-existing financial interests, recusal or waiver, at the sole discretion of management, will be the remedy for any possible conflicts of interest based on the examiner's pre-existing financial interests; (iii) In all other situations, the Office will normally require the examiner to divest the financial interest causing the conflict.

F.3.: For an intractable conflict of interest, such as a vested interest in a company-sponsored retirement plan, recusal or waiver, at the sole discretion of management, will normally be the remedy. An intractable conflict of interest is one wherein the employee cannot divest or has no control over divesting the asset. Marriage and divorce are not considered to be within one's control for the purpose of this proposal.

F.4.: In the event that a conflict of interest arises due to the current employment of a bargaining-unit employee’s spouse or dependent child, recusal, waiver, or transfer, at the sole discretion of management, will normally be the remedy.

Adoption of the Factfinder’s recommendations in § F.1. and 2. would protect pre-existing employee financial interests in situations where the Agency "for its own convenience and reasons has changed the work assignment of an employee." As such, the protections provided "balance the interests of the employee and the Agency." § F.3. and 4. address "intractable conflicts of interest" and conflicts of interest that arise due to the current employment of a bargaining-unit employee’s spouse or dependent child, respectively. Both were agreed to by the parties "in principle" during the factfinding hearing, although it appears that § F.4. was "totally overlooked" by the Factfinder "by accident and should be reinserted by the Panel." Moreover, all of the subsections in § F. "were a matter of general agreement between the Agency and the Union during the interest-based bargaining phase" of the parties’ earlier negotiations. The Employer’s only substantive objection to these provisions is based on whether the wording interferes with its alleged "sole and exclusive right," under the ethics regulations, to determine what remedies are appropriate to correct situations involving conflicts of interest, a position the FLRA has already rejected. Finally, § F. also should be adopted because it would prevent the Employer from changing work assignments for the purpose of harassing employees "with an action that has an extreme adverse financial impact."

2. The Employer’s Position

    The Factfinder’s recommendation on § F., and the Union’s additional proposed § F.4., "should be rejected in their entirety as inconsistent with the Government-wide ethics regulations." Preliminarily, as in a number of other sections where he alleges that the parties were in agreement, "the Factfinder is in error." While he "appears to have incorporated" an Employer proposal "responsive to the concerns of the Union when an examiner is subjected to a management-directed change in work assignment" in § F.1.(i), the Union did not agree to the proposal, and ultimately all of the proposals in § F were rejected by the Employer. This is because all the proposals "seek to restrict the reviewing official in his determination of the appropriate remedies available to remedy a conflict of interest," which is management’s "sole and exclusive right to determine" under 5 C.F.R. § 2634.605(b). Moreover, adoption of the Factfinder’s recommendations could be extremely burdensome in circumstances where new patent applications in a particular art unit are piling up, and examiners need to be reassigned on short notice to meet work requirements. Finally, as with the Union’s proposed wording in § C.1.(ii) above, the Factfinder failed to even mention § F.4. in his recommendations.

CONCLUSIONS

    After examining the evidence and arguments presented by the parties concerning § F., we conclude that the dispute should be resolved on the basis of the Union’s proposal. Aside from the Employer’s legal position, it raises what appears to be only relatively minor and speculative concerns regarding the impact that adopting the Factfinder’s recommendation would have on its ability to meet its mission requirements. In our view, the benefits that affected employees would receive under the recommendations outweigh such concerns. In this regard, § F.1. and 2. protect employees against the negative impact of management-initiated actions, some of temporary duration, which otherwise could lead to a requirement to divest certain assets. Similarly, § F.3. and 4. apply in situations which to a large degree are outside an employee’s direct control and, therefore, appear to be steps which a reasonable employer otherwise would take on its own initiative. For these reasons, we shall order the adoption of the Union’s proposal to resolve the parties’ impasse over this section.(14)

V. § G. Procedures for Divestiture

1. The Union’s Position

    In addition to the Factfinder’s recommendation cited below, the Union proposes that the bolded wording also should be adopted to resolve the parties’ dispute over § G.:

G.1.: Before issuing any suggestion or directive to divest, the office of the Designated Agency Ethics Officer (DAEO) must contact the employee and verify the employee's technological area of primary responsibility. Any directive to divest will include the description of the employee's technological area of primary responsibility.

G.2.: An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634. Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. The Office shall support the employee's request for a COD unless there is well-established precedent to the contrary and application of the precedent to the facts is clear cut. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee. The employee may appeal this decision to the Director of the PTO.

G.3.: (i) In the event the Office directs an examiner to divest financial holdings as a result of a conflict created by an Office-initiated action or through an inadvertent mistake on the part of the examiner, the Office shall provide such notice in writing and will allow 30 days for divestiture, but not before a requested COD has been granted or denied. For assets not listed on an exchange, the Office shall allow 90 days for divestment; (ii) The notice shall inform the examiner of the possibility of obtaining a COD (providing for non recognition of gain in the case of a sale to comply with the conflict of interest requirements) as provided for under 5 C.F.R., Part 2634, Subpart J, and shall provide a form letter to request a COD from the Office of Government Ethics.

These provisions are necessary because of the significant impact divestiture of assets has on employees, and the fact that "divestiture is not a mere theoretical concern." With respect to the latter, in the past year the OGC identified "58 situations involving a potential conflict of interest," and "26 letters requiring divestiture were mailed out (mostly through e-mail)." Such directives are generally the first contact the DAEO has with the employee, and the e-mail the employee receives requires divestiture within 7 to 10 days. Such letters "greatly upset the recipients," and are usually based on a misunderstanding. In these circumstances, the adoption of § G.1. is justified because it would require an initial contact between the employee and DAEO before the employee receives a directive to divest. It would "lower the confrontational tone," notwithstanding the Employer’s contention that it is unnecessary to ask employees to identify their technological area of primary responsibility.

    The Employer does not object to the first and third sentences of the recommended wording in § G.2., which provide information on CODs, and a written justification for why an employee’s request to have the DAEO submit a request for a COD was denied. The second sentence of § G.2. would prevent the DAEO from "being the level at which new interpretations of the regulations are initiated," i.e., under the regulations, the OGE ultimately has the authority to grant or deny a COD, so the wording would permit the DAEO to perform a screening function, but no more. This is appropriate "since divestiture is being ordered for the convenience of the government" and "the benefit of a COD ought to be applicable to everyone who possibly qualifies unless there is clear cut precedent that a COD is not warranted."

    The fourth sentence of § G.2. provides employees with an avenue within the Agency to appeal a decision of the DAEO not to forward the employee’s request for a COD, and is justified because "the decision of one person should never control the ultimate outcome of a situation." Since the ethics regulations do not provide for appeals, "an alternate form of appeal is necessary." Nor is the requirement inconsistent with the regulations. Moreover, sending appeals to the Director of the PTO is appropriate given that he or she has the ultimate responsibility for maintaining the integrity and reputation of the agency.

    § G.3.(i) "provides for an explicit written agency decision requiring divestiture" and a minimum 30-day period when divestiture is to be accomplished. The latter would give employees a sufficient period of time to request a COD, and is particularly important given the Agency’s practice of ordering divestiture in 7 to 10 days "even when there is no identified need for accelerated action" because CODS "must issue prior to the sale of the asset." The additional bolded wording proposed by the Union would "be useful in those rare instances when assets are not publicly traded," as such assets "are more difficult to divest at a reasonable price quickly." Its omission "appears to be an oversight, since the Factfinder did not provide any recognition or explanation in his report of why this change from what was proposed was made." Finally, § G.3.(ii) merely provides the employee who is being notified to divest with information about obtaining a COD, a requirement which the Agency admitted would not be administratively burdensome.

2. The Employer’s Position

    The Panel should reject the wording recommended by the Factfinder in § G.1. and 3.(i). Additionally, instead of what the Factfinder recommends in § G.2. and 3.(ii), the following wording should be adopted:

§ G.2.: An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634, Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee.

G.3.(ii): In the event that divestiture is necessary, the bargaining-unit member will be provided written notice specifying all relevant particulars and requirements, including the work matter(s) and the bargaining-unit employee’s particular financial interest, available options to remove the conflict and manner(s) by which the bargaining unit may exercise such options.

With respect to § G.1., requiring the DAEO to contact the employee to verify the employee’s technological area of primary responsibility before issuing any suggestion or directive to divest "is superfluous." In this regard, the DAEO can contact the employee’s supervisor to obtain the information instead of the employee, and such considerations are the first step in determining whether an employee has a conflict of interest. The Factfinder’s recommendation on § G.2. is acceptable only if the second sentence is removed. This is because "any restriction or limitation upon the discretion of the DAEO" is contrary to 5 C.F.R. § 2634 (Subpart J–Certificates of Divestiture). Similarly, the last sentence of this subsection also "is contrary to law." Permitting an employee to appeal to the Director of the PTO in circumstances where the OGC determines to decline to submit a request for a COD to the OGE is contrary to the regulations, and "essentially meaningless." Decisions to request CODS on behalf of employees are made exclusively in the Ethics Division of the DOC’s OGC, and the Director of the PTO has no authority over the Ethics Division in the OGC. Moreover, § G.2. is totally at odds with the Union’s main concern that first and second level management "be excluded from this process" by "inexplicably" calling for the highest managerial level of the PTO to become involved.

    By restricting the time available for divestiture from a period not to exceed 90 days to 30 days, § G.3.(i) is inconsistent with the regulations,(15) and should be rejected on that basis. Further, as in a number of other instances where the Union suggests wording not included in the Factfinder’s recommendation, its proposal that the Office allow 90 days for divestment of assets not listed on an exchange was not even addressed by the Factfinder. Finally, the Factfinder’s recommendation concerning § G.3.(ii) is deficient because it focuses on only one option employees may have for removing a conflict of interest and coming into compliance with applicable laws and regulations, and may mislead employees. The Employer’s proposed wording for this subsection would rectify this shortcoming.

CONCLUSIONS

    Having carefully considered the parties’ impasse over § G., we shall order the adoption of a modified version of the Factfinder’s recommendation to resolve their dispute. In this regard, we are persuaded that a balancing of the equities involved requires the elimination of the following from the recommendation: (1) the last sentence of § G.2., which permits employees to appeal to the Director of the PTO decisions by Agency ethics officials not to submit requests for CODS; and (2) § G.3.(ii), which requires the Employer to inform employees who are asked to divest of the possibility of obtaining a COD, and to provide employees with a form letter to request a COD from the OGE. In our judgement, the Union has failed to establish why the Director of the PTO should play any role in reviewing the decisions of OGC ethics officials, particularly where such officials are employees of the DOC and not the PTO. As to § G.3.(ii), this portion of the Factfinder’s recommendation appears to be unnecessary because most of the matters it covers are already addressed in § G.2. In our opinion, the Employer’s alternative proposal also is deficient in that, once the DAEO has determined that divestiture is required, there appear to be no other options to be explained.

    Turning to the other portions of the recommendation, the Employer essentially opposes the adoption of § G.1. because there is no need for the DAEO to contact the employee to verify the technological area of primary responsibility before issuing a directive to divest. Its argument, however, disregards the Union’s concern that affected employees perceive the Employer’s current practice as confrontational. Moreover, the parties’ experience during the previous CFD reporting cycle appears to confirm the value of communication between the OGC and affected employees. In this regard, a high percentage of initial determinations that an employee may have to divest assets because of a conflict of interest ultimately do not result in divestiture after the employee and the OGC discuss the matter more thoroughly. Thus, while recognizing that the benefits may be marginal, we nevertheless believe that § G.1. addresses a legitimate interest and should be adopted.

    The Employer’s chief objection to the second sentence of § G.2. and to § G.3.(i) once again is based on legal grounds which the FLRA rejected in POPA and PTO. The second sentence of § G.2. would limit the OGC’s ability to decline to submit an employee’s request for a COD to the OGE, which ultimately has the authority to grant or deny such requests, only where "there is well-established precedent to the contrary and application of the precedent to the facts is clear cut." In our view, the OGC’s support of an employee’s request for a COD generally is warranted given the adverse impact of divestiture. We also are not convinced that this would have any practical effect on the way the OGC normally responds to COD requests from employees. With respect to § G.3.(i), we find that providing employees with a 30-day period before divestiture is required, after a requested COD has been granted or denied, is reasonable given that the regulations permit agencies to grant employees up to 90 days, and the Employer’s initial notification to employees normally specifies that divestiture must occur within 7 to 10 days. Finally, the Union has not provided reasons sufficient to justify changing the Factfinder’s recommendation to include the additional sentence it proposes under § G.3.(i), particularly where the regulations permit the Employer to grant greater than 90 days for divestiture in cases of unusual hardship.

VI. § H. Rights to Information

1. The Union’s Position

    The Panel should impose the Factfinder’s recommendation in § H.1.(ii) and (iii) and H.2.(i):

H.1. (ii): A log will be kept of names and dates of all individuals who access any information from the employee's CFD statements, except that entries in the log will not be required for the Agency ethics officials or for persons for whom disclosure of the releases to the employee is precluded by law or regulation; (iii) In the first month of every fiscal year, employees may request a copy of the log detailing access to their own records in the prior fiscal year.

H.2.(i): The Office shall provide a report to POPA within one month of the end of each fiscal year describing each instance of an examiner being required to divest financial holdings or transfer because of a conflict of interest, and each instance in which a waiver has been granted, without identifying the examiner. This description shall include the company name, the art and the rationale relating the two and, in the case of a waiver, the reason for the waiver.

The Union would accept either the Factfinder’s recommendations in § H.1.(ii) and (iii), or the wording proposed by the Employer "if the FSIP decides that there is no difference in meaning in either formulation." The Union was unwilling to accept the change proposed by the Employer "without a clear history that there is no change in meaning." The Union’s concern is "with preventing disclosures to first and second line supervisors who may become jealous of the significant assets possessed by their subordinates." As to § H.2.(i), its adoption would allow the Union to ensure that Agency decisions are consistent. Contrary to the Employer’s contention, if the reports required by the provision are "carefully crafted," there "will be no negative impact on the privacy of any individual."

2. The Employer’s Position

    Instead of including the word "access" in § H.1.(ii) and (iii), as recommended by the Factfinder, the Employer proposes that the words "receive" and "release of," respectively, be used in its place. In addition, the Factfinder’s recommended wording in § H.2.(i) should be omitted from the parties’ agreement. The substitution of its preferred wording for that recommended by the Factfinder in § H.1.(ii) and (iii) is warranted because "the transcript firmly establishes that the only persons accessing this information are the Ethics attorneys who review the OGE Form 450s." Its approach also meets the Union’s concerns regarding the persons to whom any such disclosure would be made, "particularly first or second line supervisors." As to § H.2.(i), the information requested by the Union "would negatively impact on the privacy interests of unit employees." Even with "personal identifiers redacted," the amount of information the Union would receive under the recommended wording "may still be sufficient" to permit it to determine the identity of the individual. Furthermore, such disclosure to the Union would "most likely" violate the Privacy Act, 5 U.S.C. § 552a.

CONCLUSIONS

    Concerning the disputed portions of § H., we conclude that the Employer has provided insufficient grounds to disturb the Factfinder’s recommendations on the subsections in question. Regarding § H.1.(ii) and (iii), the difference between the wording it prefers and that of the Factfinder is marginal at best, and the Employer has failed to adequately specify the sorts of future disagreements that the adoption of its position is intended to prevent. Finally, with respect to § H.2.(i), we are persuaded that the Union’s need to monitor the consistency of the Employer’s conflict of interest decisions regarding divestitures, transfers, and waivers outweighs the Employer’s concern that the privacy of employees would be compromised. In agreement with the Union, if the Employer is careful in constructing the reports required under the provision, we find no basis for its speculation that the Privacy Act would be violated.

ORDER

    Pursuant to the authority vested in it by the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their dispute during the course of proceedings instituted under the Panel’s regulations, 5 C.F.R. § 2471.6(a)(2), the Federal Service Impasses Panel under § 2471.11(a) of its regulations hereby orders adoption of the following:

Previously Initialed and Agreed-Upon Sections

    § A.; § B.; § C.3., 6., and 7.; § D.1, 2., 3., 5., 8., and 10.; § E.1. and 5.; § H.1.(i) and 2.(ii); and § I.1. and 2, previously initialed and agreed to by the parties on February 14, 2001, shall be incorporated into the parties’ agreement.

I. § C. Education

    The parties shall adopt the Employer’s position, i.e., the Factfinder’s recommended wording shall not be included in the parties’ agreement.

II. § D. Substantive Rules

The parties shall adopt the following wording:

D.4.: E-mail or other appropriate means may be used for communication with employees.

D.7.: (i) The Office hereby determines that the duties of patent examiner positions which are below GS-13, below GS-12 for design examiners, are positions at such a low level of responsibility that the submission of a CFD statement is unnecessary because of the substantial degree of supervision and review over these positions; (ii) The Office hereby determines that the following POPA bargaining unit employees will not be required to file the Form 450 unless procurement activity or contract supervision requires otherwise: All classifiers regardless of grade except those who are actively examining patent applications; all librarians regardless of grade; and all employees of the Scientific Technical Information Center.

D.9.: Employees should request guidance from the DAEO in writing. The written request for guidance should contain all the relevant and correct information regarding the potential conflict of interest. The DAEO will acknowledge receipt of a written request for guidance as soon as possible, usually within five (5) business days, and will, if necessary, discuss a time frame for a final written decision. Final decisions will be written upon a written request by the employee. The employee's written request and the DAEO written decision may be via e-mail, unless the employee requests a more private form of communication. The DAEO will keep records of their decisions.

In addition, the Union’s proposed § D.6. shall be withdrawn.

III. § E. Definition of Technological Areas

    The parties shall adopt the following wording with respect to the disputed subsections under § E.:

In accordance with § E.1., the Office’s written decision will occur only after it has been presented with recommendations from a joint labor-management committee regarding any disagreement between the examiner and the Office concerning the definition of his/her technological area or a particular company's designation in a technological area. The joint labor-management committee will consist of no more than two representatives from each side. The committee will gather the information necessary to apply the standards set forth in subsections (ii) to (v) below. Past practice within the art unit will not be precedential since any one examiner may not be concerned with this issue. If the committee reaches a consensus regarding its recommendation, the recommendation will promptly be issued in writing to the Office. If no consensus is reached by the committee, two separate written recommendations will promptly be issued to the Office. In either case, the Office will then promptly issue its written decision to the examiner, in accordance with E.1. above; (ii) When the committee considers its recommendations, the fact that a company has fewer than twelve (12) patents issued in a technological area in the most recent eight (8) years, is prima facie evidence that such company is not within that technological area; (iii) If an examiner has not acted on any application from a company in the past two years, this will be considered prima facie evidence that the company is not in the examiner's technological area; (iv) Prima facie evidence of an examiner's technological area will be the cases that the examiner has acted on in the past year; (v) When making an allegation that a particular company is in an examiner's technological area, management committee members will cite at least one patent application that the examiner has acted upon in the last year or one patent application that is docketed to the examiner that will have a direct and predictable impact on the company; (vi) In applying the standards set forth in (ii) to (v) above, it is understood that other relevant data may be considered by the committee, including SIC and/or NAICS Codes, and applied in any individual case if the evidence shows that it is warranted.

IV. § F. Appropriate Arrangements for Alleged Conflicts of Interest

    The parties shall adopt the Union’s proposals.

V. § G. Procedures for Divestiture

    The parties shall adopt the following wording with respect to the disputed subsections under § G.:

G.1.: Before issuing any suggestion or directive to divest, the office of the DAEO must contact the employee and verify the employee's technological area of primary responsibility. Any directive to divest will include the description of the employee's technological area of primary responsibility.

G.2.: An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634. Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. The Office shall support the employee's request for a COD unless there is well-established precedent to the contrary and application of the precedent to the facts is clear cut. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee.

G.3.: In the event the Office directs an examiner to divest financial holdings as a result of a conflict created by an Office-initiated action or through an inadvertent mistake on the part of the examiner, the Office shall provide such notice in writing and will allow 30 days for divestiture, but not before a requested COD has been granted or denied.

VI. § H. Rights to Information

    The parties shall adopt the Factfinder’s recommendations.

 

By direction of the Panel.

H. Joseph Schimansky

Executive Director

June 12, 2001

Washington, D.C.

 

1. The Employer implemented its decision to require employees to fill out the financial disclosure forms required by the Office of Government Ethics (OGE) on or around March 2, 2000, about 1 week after the Union filed its request for assistance.

2. After the parties received the FR&R, they reached agreement and initialed-off on the Factfinder’s recommendations with respect to the following: § A.; § B.; § C.3., 6., and 7.; § D.1, 2., 3., 5., 8., and 10.; § E.1. and 5.; § H.1.(i) and 2.(ii); and § I.1. and 2. It should be noted that the parties numbering system differs slightly, in some instances, from the numbering system used in the FR&R.

3. The Employer makes the specific allegation referred to here with respect to the following Union proposals and/or Factfinder recommendations: § D.7.; § E.2., 3., and 4.; § F.1., 2., 3., and 4.; and § G.2. and 3.(i).

4. In interpreting its regulations, the OGE stated the following:

Criteria for agencies to apply in identifying which of their employees must file [CFD] reports are listed at 5 C.F.R. §§ 2634.904 and 2634.905. The regulations at 5 C.F.R. § 2634.904(a)(1) state that “the agency” is responsible for concluding who is a confidential filer based on the requirements set forth in § 2634.904. In 5 C.F.R. § 2634.905, “the agency head or designee” determines exclusions from the filing requirements. No one else may make these determinations. Any proposal to the contrary would, therefore, be nonnegotiable because the agency’s authority is sole and exclusive. [Emphasis added.]

5. Carswell allows the Panel to resolve duty-to-bargain issues raised in impasse proceedings where the FLRA previously has found a “substantively identical” proposal negotiable; Bureau of Reclamation allows such resolution even where an employer’s negotiability arguments are different from those previously addressed by the FLRA.

6. As to the view the Employer expresses in footnote 8 of its “Response to Factfinder’s Report and Recommendations,” that “it is likely that the FLRA would indeed have given some credence to the OGE’s official interpretation of its regulations,” had OGE Guidance Memorandum DO-99-014 been available at the time the FLRA decided POPA and PTO, the Panel is bound by the precedent established by the FLRA, unless the FLRA reverses itself, or is reversed by the U.S. Supreme Court.

7. As to the view the Employer expresses in footnote 8 of its “Response to Factfinder’s Report and Recommendations,” that “it is likely that the FLRA would indeed have given some credence to the OGE’s official interpretation of its regulations,” had OGE Guidance Memorandum DO-99-014 been available at the time the FLRA decided POPA and PTO, the Panel is bound by the precedent established by the FLRA, unless the FLRA reverses itself, or is reversed by the U.S. Supreme Court.

8. The Union also states that the Factfinder’s recommendations should “be given the respect normally given to the decision of a lower court - reversal only for error, not for mere differences in judgement.”

9. NFFE, Local 1482 and U.S. Department of Defense, Defense Mapping Agency, Hydrographic/Topographic Center, Washington, D.C., 44 FLRA 637 (1992).

10. The Employer cites American Federation of Government Employees, Local 644 and U.S. Department of Labor, Occupational Safety and Health Administration, Norfolk, Virginia, 40 FLRA No. 65 (1991) to support its

11. Given this result, it is unnecessary to address the Employer’s argument that the Factfinder’s recommendation in § D.4. interferes with management’s right to determine the methods and means of performing work.

12. § E.1. states as follows:

1.(i) The Office will provide annually to each examiner a definition of the technological area which is within the primary responsibility of the examiner; (ii) At the examiner’s request the definition will be reconsidered and a written decision with an explanation will be promptly issued.

13. In this regard, the Factfinder’s recommendation in § E. is based on Proposal 6 in POPA and PTO. In finding the wording negotiable, the FLRA stated that “nothing in Proposal 6 indicates that committee decisions are final and binding on the Agency.” See POPA and PTO at 654.

14. In reaching this decision, we are mindful that the FR&R contains no reference to § F.4. While there is little basis in the record to support the Union’s conclusion that this was an accidental oversight on the part of the Factfinder, it is included in our Order because we are persuaded of its merits.

15. 5 C.F.R. § 2635.403(d) states that, “except in cases of unusual hardship, as determined by the agency, a reasonable period shall not exceed 90 days from the date divestiture is first directed.”

 

 

FEDERAL SERVICE IMPASSES PANEL

In the Matter of Factfinding

                    between

Patent and Trademark Office              Case No.:00 FSIP 55

          and

Patent Office Professional Association

 

FACTFINDING REPORT AND RECOMMENDATIONS

Submitted: November 14, 2000

Michael Fischetti

Factfinder

 

APPEARANCES

 

On Behalf of the Patent and Trademark Office

 

Marilyn Blandford, Esq. (Co-Presenter), Office of the General Counsel (OGC), U. S. Department of Commerce (,DOC)

Peggy Coleman Durfey, Esq. (Co-Presenter), Chief Labor Counsel (OGC)

U.S. Patent and Trademark Office (PTO)

Gerald Goldberg, Director, TC 3600, PTO

David Dalke, Office of Labor Relations, PTO

James C. Housel, Supervisory Primary Examiner, TC 1600, PTO

Emory Rounds, Office of the General Counsel, DOC

David Maggi, Ethics Division, OGC, DOC, Witness

Janet Naughton, Ethics Division, OGC, DOC

Peter Jones, Ethics Division, OGC, DOC

 

On Behalf of the Patent Office Professional Association

 

Ronald Stern, Esq. (Presenter), President and Chief NegotiatorPatent Office Professional Association (POPA)

Karen M. Hastings, Negotiator (POPA), Patent Examiner, PTO

Robert Budens, Patent Examiner, PTO

Pamela R. Schwartz, Assistant Secretary (POPA), Patent Examiner, PTO

Melanie H. Tung, Patent Examiner, PTO

Sandra Soucier, Patent Examiner, PTO, Witness

Robert Kunemund, Patent Examiner, PTO, Witness

Chester Barry, Patent Examiner, PTO, Witness

Lawrence Oresky, Director of Grievances (POPA), Patent Examiner, PTO, Witness

BACKGROUND

    On July 13, 2000, the Federal Service Impasses Panel (the Panel) directed the Patent and Trademark Office (the PTO or the Office) and the Patent Office Professional Association (POPA or the Union) to proceed immediately, no later than August 14, 2000, with the selection of a factfinder and the scheduling of the proceedings pertaining thereto. On August 11, 2000, the parties selected Michael Fischetti to serve as the Factfinder to the proceedings ordered by the Panel.

    Prior to the order to appoint a factfinder the parties had engaged in Interest Based Bargaining sessions with the aid of a facilitator, and also in mediation sessions under the auspices of the Federal Mediation and Conciliation Service (FMCS). On August 29, 2000, the Factfinder conducted a Pre-hearing Conference at which time he outlined the schedule mutually agreed upon, and the manner and procedures to be followed by the respective parties. Hearings were held on September 12, 14, 26, 27, 28, and 29. Each party initially had three hours to present their positions on each of the issues without any interruption from the other. Subsequent to their presentations, the parties had a full and fair opportunity to present any and all evidence; to present and examine or to confront and cross-examine any and all witnesses; and to present any and all arguments in support thereon as each deemed appropriate. During the course of the proceedings the parties had the opportunity to amplify, modify, or alter their positions in an effort to resolve their impasse.

Organization of the Patent and Trademark Office (PTO)

The PTO is an agency of the U.S. Department of Commerce. It performs three primary tasks:

    1. Grants patents to protect inventions;

    2. Registers trademarks; and

    3. Preserves, classifies, and disseminates information about intellectual property, which includes patents, trademarks, and copyrights.

Patent examiners are responsible for reviewing applications for patents submitted by the general public. After examining an application to determine whether the proposed invention warrants a patent, the examiner drafts a written response to the applicant concerning the invention's patentability.

Patent examiners are assigned to work in 1 of 16 "groups," which are established in accordance with general areas of technology. Within each group, examiners are assigned to smaller, more specialized "art units". Each group comprises from 4 to 13 art units, and each art unit typically comprises between 10 and 20 examiners who are assigned to specific industry sectors.

Patent examiners work under a "docket system". Each examiner has a docket that lists all the patent applications that have been assigned to that examiner. A Supervisory Primary Examiner (SPE) is responsible for ensuring that patent applications within the SPE's art unit are reviewed in a timely manner. The Patent Office Professional Association (POPA) is the collective bargaining agent for the Patent Examiners.

    This report focuses on the issues that the Authority defined as within the duty to bargain in its DECISION AND ORDER ON NEGOTIABILITY ISSUES, dated September 30, 1997 (U7). During the course of the factfinding proceedings the Union made proposals to which the Agency made counter proposals. In numerous instances the Union and the Agency were able to agree and in other instances they were not able to agree.

    The Authority considered the following issues within the duty to bargain. They are contained in Exhibit U-7, and correspond to the issues the Union presented in its proposals to the Authority. Accordingly, they represent the issues that were under discussion at the factfinding proceedings. They are listed herein with the proposal numbers they were given in the twenty-five (25) issues presented to the Authority. The factfinder has retained the original numbers which are as follows:

    Proposal 1--Defines the financial interests that will be presumed to constitute a conflict of interest.

    Proposal 2 and 3--Provides the methods by which examiners may determine a company's industry sector so as to permit examiners to identity conflicting financial interests.

    Proposal 6--Provides for a method for resolving disputes over the industry codes assigned to an examiner's art unit or to a particular company.

    Proposal 7--Requires that examiners be told which financial holdings are barred because of their new or changed work assignments, and that management provide the information in the form specified in Proposal 3.

    Proposal 8--Concerns situations when a preexisting financial interest becomes conflicting because the Agency transfers an examiner to a new art unit or changes the industry sectors assigned to the examiner's art unit.

    Proposal 9(a) and 9(b)--Specify the actions that the Agency is permitted to take when conflicts of interest arise because an examiner is assigned work that is either not typical of the work in the examiner's assigned industry sector, or the result of a temporary transfer of work.

    Proposal 10(a)--Establishes certain time limits for accomplishing divestiture.

    Proposal 17--Prohibits the Agency from removing an examiner based on particular conflicts of interest.

    Proposal 21--Exempt examiners at GS-12 level and lower from any requirement to file a financial disclosure statement.

    Proposal 22--Establish a joint labor-management committee to address conflict of interest issues which are the result of currently employed examiners seeking employment outside the Agency.

    Proposal 23--Requires the Agency to establish a code to enable examiners to identify on their time sheets the work time they spend fulfilling financial disclosure and conflict of interest requirements.

    Proposal 24--Exempt examiners from including in their financial disclosure statements information concerning the interests set forth in the proposal.

    Proposal 25--Require the Agency to seek OGE approval of an alternative financial disclosure procedure that satisfies the criteria of the proposal, and would require that a Union representative be included in the development and drafting of the alternative procedure.

Magnitude of Potential Conflicts of Interest

    As set forth in U-12, the Agency noted that it had collected and reviewed 1,110 confidential financial disclosure (CFD) reports as of July 3, 2000. The total number of potential employees was 1, 454, so 344 employees were outstanding. The Agency noted that it had made efforts to get all of the remaining employees to comply. Fifty-eight (58) reports were identified as presenting potential or actual conflicts of interest. Thirty-two (32) of these were resolved through contact with the employee's Technology Center or Art Unit. The Agency noted that no names of filers were given out during these phone contacts. Of the remaining cases, twenty-one (21) were resolved after a contact with the filer. The remaining five (5) reports had issues that were still being addressed by the filer and the staff reviewer.

Areas of General Agreement between the Parties

    The following issues represent specific areas where the Union and the Agency are in substantial agreement. This is not to state that the parties are in complete agreement, but rather that, in principle, they generally and conceptually agree. The following also represents the revisions and compromises which the Union and the Agency have made during the course of the factfinding proceedings.

A. Confidential Financial Disclosure (CFD) Form Submission

The parties were able to compromise and agree on the following, which represents specific positions they set forth in A-5 and U-1, and modified in U-27. Accordingly, the Factfinder recommends that the following language be incorporated into the Agreement between the parties.

1. Bargaining unit employees be provided the option of filing the OGE Form 450A in accordance with OGC regulations. Materials accompanying the form will explain when it is appropriate to use the simplified 450 A Form.

2. Filers will be supplied with a blank Form 450, a blank Form 450A, as appropriate, and a self-addressed postage paid return envelope at least six (6) weeks prior to the required Form 450 return date.

3. Completed CFD Forms will be sent directly to the Office of the Designated Agency Ethics Official (DAEO). Bargaining unit employees will not be required to submit forms to their first and second line supervisors.

B. Availability of Non-Production Time

The parties compromised on this issue and the following language represents their joint effort as set forth in Jt. # 1. Accordingly, the Factfinder recommends that the following language be incorporated in the Agreement between the parties.

1. POPA bargaining unit employees on production schedules who complete and submit a CFD report shall be granted two (2) hours on non-production time to read directions for completing the form and to complete the report.

2. Time spent for the following:

a. contacts initiated by ethics official(s);

b. consulting with ethics official(s) to resolve potential conflicts of interests created by marriage, gifts, inheritance, acceptance of honoraria, expense reimbursement, and corporate action involving a current holding, and other matters which may create an actual or apparent conflict of interest, or

c. interacting with ethics official(s) and/or supervisors when management assigns work to the examiner that is outside of their technological area of primary responsibility will be accounted for separately and accurately recorded. Time spent shall be reasonable relative to the issue. Management will identify a subproject code which will be applicable to conflict of interest matters. Employees shall record on their time sheet the name(s) of ethics official(s) contacted, date(s), and the general nature of the issue(s). Time will be recorded in the pay period in which it occurs.

C. Education

The parties were able to agree on the following proposal which is contained in U-21. Accordingly, the Factfinder recommends that the following language be incorporated into the Agreement between the parties.

1. The Office shall provide at least yearly ethics training to all bargaining unit employees in accordance with 5 C.F.R., Part 2638.701 et sec.

2. Live ethics training will be offered once per year for all second year employees and GS-11 employees. All other bargaining unit employees will be offered live ethics training every three years.

3. Bargaining unit employees on production schedules who attend classroom training or receive training via written materials shall be granted one hour of non-production time for completing the training. The Agency encourages employees to list time spent reading the written training materials as non-production time.

D. Substantive Rules

1. With the exception of regulatory exemptions, a patent examiner may not hold or acquire financial interests in entities which the examiner knows have commercial or research activity in the technological area within the examiner's primary responsibility. The technological area within the examiner's primary responsibility is classes or subclasses or portions of classes and subclasses, whichever is more limited, assigned to the examiner by management. POPA bargaining unit employees other than examiners may not acquire or retain financial interests which conflict with their assigned duties.

2. If at any time, a bargaining unit employee believes his or her examination of an application may result in a conflict of interest, the employee should recuse himself or herself from working on that application and seek guidance from the Agency Ethics official designated pursuant to 5 C.F.R. Part 2638. Conflicts of interest may be the result of being assigned an application that is not typical of the technological area within the bargaining unit employee's primary responsibility or a temporary transfer of work.

3. In the event the designated Agency ethics official determines that a bargaining unit employee has a conflict of interest, the Agency ethics official shall first attempt to counsel the bargaining unit employee, which will normally include providing possible remedies to the situation, including those set forth at 5 C.F.R., Part 2640.

4. E-mail may be used for communication with the prior permission of the employee.

5. No bargaining unit employee will be removed from PTO employment due to a conflict with a financial interest that existed prior to employment, or due to an Office-initiated change of work assignment, unless the conflict was knowingly concealed by the bargaining unit employee during an inquiry by the Office.

6. The parties are not in agreement with the POPA proposal in this paragraph of U-1. It will be discussed in more detail later in this report.

7. (i) The Office hereby determines that the duties of patent examiner positions which are below GS-13, below GS-12 for design examiners, are positions at such a low level of responsibility that the submission of a CFD statement is unnecessary because of the substantial degree of supervision and review over these positions.

(ii) The Office hereby determines that the following POPA bargaining unit employees will not be required to file the Form 450 unless procurement activity or contract supervision requires otherwise:

* All classifiers regardless of grade except those who are actively examining patent applications;

* All librarians regardless of grade; and

* All employees of the Scientific Technical Information Center.

8. The parties were not able to agree on the language of this paragraph set forth in U-1. It will be discussed further later in this report.

9. Employees should request guidance from the DAEO in writing. The written request for guidance should contain all the relevant and correct information regarding the potential conflict of interest. The DAEO will acknowledge receipt of a written request for guidance as soon as possible, usually within five (5) business days, and will, if necessary, discuss a time frame for a final written decision. Final decisions will be written upon a written request by the employee. The employee's written request and the DAEO written decision may be via e-mail, unless the employee requests a more private form of communication. Decisions and opinions of the DAEO will be effective from the time they are first communicated to the employee. The DAEO will keep records of their decisions.

10. POPA bargaining unit employees in non-examining positions will be treated in a manner consistent with the treatment of patent examiners.

E. Definition of Technological Area

1. (i) The Office will provide annually to each examiner a definition of the technological area which is within the primary responsibility of the examiner.

(ii) At the examiner's request the definition will be reconsidered and a written decision with an explanation will be promptly issued.

2. (i) A committee will be established to hear appeals if an examiner disagrees with the definition of his/her technological area or a particular company's designation in a technological area. The appeals committee will gather the information necessary to apply the standards set forth in subsections (ii) to (iv) below. Past practice within the art unit will not be precedential since any one examiner may not be concerned with this issue. The appeals committee will issue a written decision which shall be precedential to the extent circumstances have not changed.

(ii) The fact that a company has fewer than twelve (12) patents issued in a technological area in the most recent eight (8) years, is prima facie evidence that such company is not within that technological area.

(iii) If an examiner has not acted on any application from a company in the past two years, this will be considered prima facie evidence that the company is not in the examiner's technological area.

(iv) Prima facie evidence of an examiner's technological area will be the cases that the examiner has acted on in the past year.

(v) When making an allegation that a particular company is in an examiner's technological area, management will cite at least one patent application that the examiner has acted upon in the last year or one patent application that is docketed to the examiner that will have a direct and predictable impact on the company.

(vi) In applying the standards set forth in (ii) to (v) above, it is understood that other relevant data may be applied in any individual case if the evidence shows that it is warranted.

Comment: The addition of 2 (vi) provides for flexibility in the application of the standards set forth in 2. (i) to (v). The Factfinder maintains that paragraph 2. (vi) offers management flexibility in determining potential conflicts of interest, while the provisions set forth in paragraphs 2. (i) to (v) offer a set of standards which may be applied as a general guide in determining whether potential conflicts of interest may exist in any individual case.

3. Management shall provide each examiner with a list of six digit Standard Industry Classification (SIC) codes for the examiners assigned technological area or with a particular company's designation in a technological area. Management shall yearly identify all companies that fall within the identified SIC codes within each technological area for companies listed on the New York Stock Exchange, the American Stock Exchange or the NASDAQ Market.

Comment: During the course of the proceedings the Standard Industry Codes (SIC) showed that there might be some shortcomings for their use in the PTO's art units. In spite of these potential shortcomings, the SIC is well recognized in the securities industry, and the Internal Revenue Services uses the SIC to classify businesses for tax purposes. Moreover, the SIC provides generally recognized classifications that have broad based acceptability in the business community. Because of this broad based acceptance, the agency can use readily available published materials, which are authoritative. The various industrial sectors can be readily matched with the art units in the PTO. The Factfinder recognizes that the PTO does not use the SIC. However, the SIC would offer a patent examiner a viable method of identifying companies that may pose a potential conflict of interest in his or her art unit. When the SIC code is fully replaced in 2001, the PTO may use NAICS, which when implemented will be the successor to the SIC.

4. (i) A committee will be established to hear appeals if an examiner disagrees with the designated SIC codes for the examiner's assigned technological area or with a particular company's designation in a technological area. The appeals committee will gather the information necessary to apply the standards set forth in subsection (ii) and (iii) below. Past practice in the art unit will not be precedential since any one examiner may not be concerned with this issue. The appeals committee shall issue a written decision which shall be precedential to the extent circumstances have not changed.

(ii) The fact that a company's total patents classified in a particular class are less than 1 % of its total patent portfolio and less than 1 % of the total patents classified in that class will be prima facie evidence that such company is not within the technological area defined by/encompassed by that class.

(iii) A company shall be deemed to be within a technological area if 10% or more of the company's revenue is generated by activities within the technological area. Revenue of less than 10% will be prima facie evidence that such company is not within the technological area.

(iv) In applying the classifications as set forth in (ii) and (iii) above, it is understood that the SIC codes are being used as a guide, and that other relevant data can be taken into consideration if the evidence shows that it is warranted.

Comment: The inclusion of 4 (iv) above provides management with flexibility in determining whether a specific company should be classified within a specific art unit. It also provides the flexibility needed where special circumstances or situations can be taken into consideration when significant changes in revenue in a specific company or its competitor(s) necessitate a variance from the provisions set forth in 4. (ii) and (iii) above.

5. In the event the Office transfers an examiner to a new art unit or changes the technological area within the examiner's primary responsibility, the Office shall provide the examiner with a written statement defining the new technological area which has been assigned. The Office shall include a reminder in the written statement that it is the examiner's responsibility to review their financial holdings and inform management of any potential conflicts.

F. Appropriate Arrangements for Alleged Conflict of Interest

1. When a potential conflict of interest arises under E(5) above, the following procedure will be used:

(i) When an examiner has a compelling pre-existing financial interest that would be adversely affected by an Office-initiated change in work assignment pursuant to E(5) above, management shall not generally make the transfer or the change referred to above, unless there is no other qualified examiner available to do the work. The bargaining unit employee may appeal to the Office for reconsideration of the proposed change. Among other things to be considered are (1) needs of the Office, (2) expertise of the bargaining unit employee, and (c) the degree of adverse financial impact on the bargaining unit employee.

Typical examples of compelling financial interest are spousal employment, significant illiquid assets and significant interests in the business of a relative. To be considered compelling the financial interest must rise to a level analogous to the examples above.

(ii) Where an examiner has a significant pre-existing financial interest that would be adversely affected by the Office-initiated change in work assignment pursuant to E(5) above, the examiner may appeal to the Office for reconsideration of the proposed change. The appeal will balance the expertise of the examiners involved, management's needs in distributing work assignments and the degree of adverse financial impact on each examiner involved. A written decision will be rendered before the employee will be required to take any action regarding his or her financial interests.

A typical example of a significant pre-existing financial interest is an asset that exceeds 30% of the bargaining unit employee's gross annual salary, but, in accordance with the law, any amount exceeding $ 5,000.00 could be regarded as potentially requiring possible divestiture.

2. (i) In the event that an application is assigned to an examiner that is not typical of those found in the assigned technological area, recusal or waiver, at the sole discretion of management, will be the remedy for any possible conflicts of interest based on the examiner's pre-existing financial interests.

(ii) In the event temporary transfers of work create a conflict of interest based on an examiner's pre-existing financial interests, recusal or waiver, at the sole discretion of management, will be the remedy for any possible conflicts of interest based on the examiner's pre-existing financial interests.

(iii) In all other situations, the Office will normally require the examiner to divest the financial interest causing the conflict.

3. For an intractable conflict of interest, such as a vested interest in a company-sponsored retirement plan, recusal or waiver, at the sole discretion of management, will normally be the remedy. An intractable conflict of interest is one wherein the employee cannot divest or has no control over divesting the asset. Marriage and divorce are not considered to be within one's control for the purpose of this proposal.

G. Procedures for Divestiture

1. Before issuing any suggestion or directive to divest, the office of the DAEO must contact the employee and verify the employee's technological area of primary responsibility. Any directive to divest will include the description of the employee's technological area of primary responsibility.

2. An employee who is asked to divest shall also be instructed as to how to apply for a certificate of divestiture (providing for non-recognition of gain for income tax purposes in the case of a sale to comply with conflict of interest regulations) pursuant to 5 C.F.R. Part 2634. Subpart J, and shall be given the opportunity to be granted such a certificate prior to any final requirement to divest. The Office shall support the employee's request for a COD unless there is well-established precedent to the contrary and application of the precedent to the facts is clear cut. If the Agency ethics official declines to submit the request, the official shall provide a written justification to the employee. The employee may appeal this decision to the Director of the PTO.

3. (i) In the event the Office directs an examiner to divest financial holdings as a result of a conflict created by an Office-initiated action or through an inadvertent mistake on the part of the examiner, the Office shall provide such notice in writing and will allow 30 days for divestiture, but not before a requested COD has been granted or denied.

(ii) The notice shall inform the examiner of the possibility of obtaining a COD of the possibility of obtaining a COD (providing for non recognition of gain in the case of a sale to comply with the conflict of interest requirements) as provided for under 5 C.F.R., Part 2634, Subpart J, and shall provide a form letter to request a COD from the Office of Government Ethics.

H. Rights to Information

1. (i) Except for Office of Government Ethics (OGE) officials, Agency ethics officials designated pursuant to 5 C.F.R., Part 2638, and officials of the Inspector General's Office, the Office shall notify an employee prior to disclosing any information from the employee's CFD statement unless such disclosure is barred by taw or regulation. Notice will be by electronic mail or telephone or other expeditious means, including voice mail, as soon as possible after the information request requirement is received by the Office.

(ii) A log will be kept of names and dates of all individuals who access any information from the employee's CFD statements, except that entries in the log will not be required for the Agency ethics officials or for persons for whom disclosure of the releases to the employee is precluded by law or regulation.

(iii) In the first month of every fiscal year, employees may request a copy of the log detailing access to their own records in the prior fiscal year.

2. (i) The Office shall provide a report to POPA within one month of the end of each fiscal year describing each instance of an examiner being required to divest financial holdings or transfer because of a conflict of interest, and each instance in which a waiver has been granted, without identifying the examiner. This description shall include the company name, the art and the rationale relating the two and, in the case of a waiver, the reason for the waiver.

(ii) The Office shall provide a copy of POPA of the required annual report that is sent to the OGE that outlines activities used to resolve conflicts.

The following areas represent issues where the parties could not come to general agreement.

C. Education

Comment: Regarding paragraph C.6 (U-1), proposed by the Union, the Agency has agreed to try to accommodate, where practicable, employees who are attorneys in an attorney-only training session. Moreover, the Union has stated that the attorneys desire CLE credit for their attendance at Ethics Training classes, and that they be issued a certificate of completion. Accordingly, the Factfinder recommends the following language be incorporated into the Agreement between the parties:

Recommended Language: The Office agrees, in accordance with applicable law and regulation, that it will accommodate, if practicable, bargaining unit employees in an attorneys-only training session in Ethics Training. The Office also agrees to issue a certificate of completion to each attendee who so requests. It is the responsibility of the individual employee to secure CLE credit, however.

D. Substantive Rules

Regarding paragraph D.6 of the POPA proposal, the parties have not come to agreement. The POPA proposal reads as follows:

If management assigns a case or project to an employee that would conflict with any holding listed in the employee's most recently filed financial disclosure statement, management shall, upon the employee's written request, provide a detailed written explanation of why the case or project must be assigned to the employee, and why any alternative assignment suggested by the employee would not be feasible.

Comment: During the course of the hearings management witnesses, Mr. Goldberg and Mr. Maggi, testified that, as a practical matter, except under the most exceptional circumstances, the work would be transferred to another employee. The Union has taken the view that it wants the above language written in to the Agreement. It contends that there is a need to have a written explanation so that the employee will have a clear statement of the reason why he or she cannot have another employee perform the work. The Factfinder finds no compelling basis on the record to incorporate the above language into the Agreement between the parties, and recommends that the above language not be included.

Regarding paragraph D. 8 of the POPA proposal, the Agency and the Union do not agree. It reads as follows:

Mere assignment of a matter to an employee, where the employee has not taken action on the matter, does not constitute a conflict of interest.

Comment: During the course of the proceedings the PTO has stated that it cannot agree to the above language because it is inconsistent with its interpretation of the law, and that it is an improper characterization of the intent of the law. The Union contends that some examiners do not get the chance to see their docket when cases are assigned, although it does admit that some examiners do review there docket when cases are assigned. The Factfinder finds that the PTO has correctly interpreted the law. He also understands that there may be a practicality within the workings of the PTO that leads the Union to assert that the above language is necessary. Since no language in the Agreement may be contrary to law or regulation, the Factfinder recommends that the above language not be included in the Agreement between the parties.

I. Unresolved Matters

Regarding Section I, Unresolved Matters, the parties are not in agreement. The Union has proposed the following:

1. A joint committee shall be formed to address conflict of issues which are the result of seeking employment outside the Office. If the committee reaches no agreement within one year of its inception, negotiations of this topic will be reopened.

Comment: The PTO contends that matters such as seeking employment outside the Office are covered under existing regulations such as those contained in 5 C.F.R., Part 2635.601-605. It also contends that there is nothing prohibiting an employee seeking advise from the ethics office. Moreover, the PTO points out that such information is included in packets of materials disseminated to each employee. In addition, the Agency asserts that various employees may wish to maintain their privacy in such matters. In sum, the Agency notes that the regulations cover all types of outside activities, whether part-time, speaking, teaching writing, or seeking future employment, including post-employment rules that apply to employees once they leave federal service. On the other hand, the Union contends that there is a need to know when employees are being "wined and dined," or are accepting gifts among other issues. The Union asserts that it is not acceptable to "sweep these issues under the rug." The Factfinder believes that the PTO has shown sufficiently that there is no compelling need for the establishment of a joint committee as called for in the proposal above.

    Recommendation: The Factfinder recommends that the above proposed language not be incorporated into the Agreement between the Parties.

    2. The Office agrees to forward an alternative POPA proposed     reporting plan to OGE.

    Comment: The above proposed language was offered at the end of the last hearing session. The PTO did not endorse the proposal, but neither did it have any strong objection to the proposal. Moreover, the OGE, in its November 9, 1999 letter, specifies that the PTO may discuss an alternative reporting procedure with POPA, but that a "proposed alternative procedure would have to be reviewed and then approved by OGE if we determine the new procedure to be appropriate."(see A-1.1). Accordingly, the Factfinder finds that the proposal offers POPA an opportunity to make an input into the reporting process.

Recommendation: The Factfinder recommends that the above proposed language be incorporated into the Agreement between the parties.

CONCLUSION

    During the course of the proceedings in this case the Factfinder was aware of the past efforts of the parties to come to settlement. Accordingly, I have been guided throughout by what is fair and reasonable to the relationship between the parties. This means that the PTO should not have burdensome and/or unwarranted procedures foisted upon it in a collective bargaining agreement. It also means that POPA, where negotiability has been positively determined, should have a fair chance t