DEPARTMENT OF THE TREASURY U.S. CUSTOMS SERVICE WASHINGTON, D.C. and NATIONAL TREASURY EMPLOYEES UNION

United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

In the Matter of

DEPARTMENT OF THE TREASURY
U.S. CUSTOMS SERVICE
WASHINGTON, D.C.

and


NATIONAL TREASURY EMPLOYEES UNION

 

Case No. 01 FSIP 153

DECISION AND ORDER

    The National Treasury Employees Union (Union) filed a request for assistance with the Federal Services Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119, between it and the Department of the Treasury, U.S. Customs Service, Washington, D.C. (Employer).

    Following investigation of the Union’s request for assistance, which involves an impasse over numerous issues which arose after the parties reopened their national labor agreement,(1) the Panel declined to assert jurisdiction over two issues which the Employer contended were outside its duty to bargain.(2) As to the remaining issues, the Panel determined that they should be resolved through the issuance of an Order to Show Cause.(3) In this regard, the parties were ordered to show why the Panel should not:

1. Impose the Arbitrator’s recommendations for settlement as to the disputed sections of Article 31 (Grievance Procedure), except for § 13.C (see below), Article 32 (Arbitration), Article 37 (Bargaining), except for those matters over which the Panel has declined jurisdiction, Article 45 (Public Transportation Incentive Program), Article 46 (Child Care Tuition Assistance Program), and Article 47 (Domestic Relocation Benefits).

2. Impose Article 31, § 13.C, as proposed by the Union on September 26, 2001, to reflect the mutual understanding of the parties on the processing of "mixed cases.(4)

3. Impose the Arbitrator’s primary recommendation for Article 37, § 10.F., as neither party has expressed a preference for the Arbitrator’s alternative recommendation.

4. Order that any provisions it imposes to resolve the dispute in this case remain in effect for the term of the national labor agreement following its renegotiation.

Pursuant to the Panel’s determination, both parties submitted written responses to the Order to Show Cause. The Panel has now considered the entire record.

BACKGROUND

    The Employer’s mission is the enforcement of customs and related laws and the collection of revenues from imports. The Union represents a nationwide consolidated bargaining unit of approximately 11,000 employees. Bargaining-unit employees hold positions such as customs inspector, import specialist, K-9 enforcement officer, and administrator, at grades GS-5 through GS-11. The parties’ national labor agreement expired on September 30, 1999. The parties currently are negotiating grounds rules for a successor national labor agreement.

ISSUES AT IMPASSE(5)

    In responding to the Order to Show Cause, the parties (either one side, or both) only contest the Arbitrator’s recommendations for settlement regarding the following issues: (1) Article 31, § 10, Step 2.E (circumstances under which the parties may waive Step 2 of their expedited grievance procedure for grievances involving suspensions of 1 to 14 days); (2) Article 37, § 6.A (whether Employer notices of proposed national changes should be served on the Union in consolidated packages on a quarterly basis, and whether the Union should be given equipment to expedite its responses to such proposed changes); (3) Article 37, § 10.F (procedures for resolving impasses reached during mid-term bargaining); and (4) Article 45 (among other things, whether the Employer should pay employees the maximum tax-free subsidy allowed by law for using public transportation). In addition, (5) the Employer proposes that the Panel modify the wording set forth in paragraph 4 of the Order to Show Cause regarding whether the provisions imposed to resolve the dispute in this case should remain in effect for the term of the national labor agreement following its renegotiation.

1.  Article 31, § 10, Step 2.E(6)

    a. The Union’s Position

    The Union proposes that the Panel order the adoption of only the first sentence of the Arbitrator’s recommendation for settlement on this issue (see footnote 6 above). As an alternative to its "primary position," however, the Union "would be willing" to accept what the Arbitrator recommended, but only if the final sentence, requiring the Employer to pay 75 percent of expedited arbitration expenses should either party waive the Step 2 panel meeting, is restored. Overall, "the presumption created by a show cause order is commonly overcome in public sector collective bargaining" when an existing recommendation: (1) "conflicts with significant public policy;" (2) forecloses "an opportunity to further increase efficiencies" for both sides (as well as for the Government); or (3) creates a "substantial inequity" that should be corrected. The Union objects to the Panel’s decision to decline jurisdiction over issues where the Arbitrator recommended retaining "the Union’s right to negotiate permissive subjects of bargaining" and clarification of the Federal Labor Relations Authority’s (FLRA) covered-by doctrine. This "has upset the balancing of interests which the Arbitrator attempted to reach in his decision."

    The Union argues with respect to the parties’ dispute over Article 31, § 10, Step 2.E, that the Arbitrator’s recommendation conflicts with "a significant public policy as outlined in 5 U.S.C. § 7121(a)(1)" of the Statute "that collective bargaining agreements have grievance processes." This is because it would permit the Employer to waive the Step 2 panel meeting, which is the only step before arbitration under the parties’ dispute resolution procedure (DRP). Since a decision as to whether to invoke arbitration is outside of an employee’s control, waiver by the Employer of Step 2 deprives the employee of a guaranteed forum. An employee’s right to file a grievance is "so sacred" that the Statute permits employees to file grievances without union consent "just to ensure that they can have their opportunity to challenge management’s actions."

    Beyond its argument that the Panel "must delete the sentences to which we object in order that employees retain the right to file a grievance," the Employer’s primary justification for proposing that suspensions of 1 to 14 days be excluded from the DRP (i.e., that the DRP is an unnecessary and costly step) is mitigated by an independent study commissioned by the Agency. In its 1999 study, Booz-Allen & Hamilton substantiated the cost-saving impact of the DRP by finding that the percentage of grievances resolved early in the DRP process had increased by an estimated 50 percent since it was implemented in 1996. This resulted in fewer grievances entering the arbitration stage, "which is the most costly step in the dispute resolution process." In addition, adoption of the Arbitrator’s recommendation also would create "a significant inequity," because it involves taking from an employee through a suspension something "to which the employee is otherwise entitled by statute, i.e., pay." Permitting management to waive the employee’s right to grieve is therefore objectionable.

    At an earlier point in the negotiations, the Union was willing to agree to the Employer’s proposal to waive Step 2 if it also was required to pay 75 percent of the costs of arbitration. This would have permitted the Union "to accept the risk of arbitration in virtually every case," even though it would have been denied all of the basic rights it argues are incumbent in the Step 2 grievance process described above. The Union argues the expenses the Employer would save from waiving Step 2 "would more than compensate" for its additional arbitration costs. The Union stands by its previous offer as an alternative to its preferred approach.

bThe Employer’s Position

    The Employer accepts the imposition of the Arbitrator’s recommendation for settlement. If the Panel is going to impose something else, however, it should be the Employer’s proposal, which would exclude suspensions of 14 days or less from the Article 31 DRP. Its proposal was intended to address the problem that "disciplinary decisions by management were subjected to consensus-based problem-solving discussions when disputed by the employee." Rights-based management decisions such as disciplinary suspensions, which are governed by a statutory requirement for a proposal, an opportunity for a formal reply, and a decision, should be argued in a rights-based framework like arbitration. While preferring its own proposal, management is willing to accept the Arbitrator’s recommendation, inter alia., "because it permits management to waive the dispute resolution panel unilaterally." The Union’s approach, on the other hand, is an attempt to force the Agency "to buy its way out of the problem." In this regard, the Arbitrator was correct to continue "the current 50/50 split in arbitration costs."

2.  Article 37, § 6.A(7)

    a. The Union’s Position

    The Union objects to the Arbitrator’s recommendation and requests imposition of its final offer, which is as follows:

The parties agree that proposed changes which apply on a nationwide basis shall be negotiated at the National Office. As of January 2002, all notices of proposed national changes will be served on the National Union and local Union chapters in consolidated packages on a quarterly basis. Such notice will be due to the Union within five (5) workdays of April 1, July 1, October 1, and January 1, of each year, respectively. These deadlines may be bypassed when a shorter implementation schedule is necessary due to circumstances beyond control of the moving party. In order to expedite the Union’s ability to respond to Employer-initiated bargaining, the Employer will give each NTEU chapter a computer, printer, modem, screen, telephone line and any other equipment needed to facilitate e-mail communication between chapters over bargaining and other labor-management relations matters.

Quarterly notification of changes in conditions of employment would provide both parties with: (1) the ability to prioritize and package bargaining issues; (2) order and structure, so that employees and managers in the field are informed of changes which will take place at their work site and when; (3) an alternative to the Agency’s current "haphazard notification process," thereby facilitating field input and national negotiations; (4) the ability to reduce costs by allowing the parties to put together bargaining teams of subject-matter experts prepared to negotiate multiple issues; and (5) the ability to negotiate outside the quarterly period based upon circumstances beyond the Agency’s control. Moreover, "it is disingenuous" for the Employer to claim that its proposal would delay bargaining, given the length of time it takes management to develop its policies and/or respond to the Union’s proposals, and the fact that IRS, "an agency many times the size of Customs, voluntarily agreed to quarterly notification almost 10 years ago."

    As to the portion of the proposal concerning equipment, its adoption would result in substantial savings and increased efficiency which is an appropriate trade-off for Union concessions which save a great deal of money, and respond to the Employer’s interest in moving midterm negotiations "at a faster pace." Among other benefits, giving each Chapter a computer at the work site would eliminate the current use of the U.S. Postal Service, which adds at least 4 weeks to the start of bargaining from the time management notifies the Union’s National President of a midterm change. Further, it "cannot provide these computers on its own" because of Treasury Department security rules, which the Union first learned about 5 years ago when IRS began supplying computers to the Union. The Employer has never argued that it is unable to pay for new computers, or rebutted the benefits advanced by the Union, nor has it otherwise explained how any of its interests would be adversely affected by the Union’s proposal. Instead, its only response has been that "the issue should be addressed by a work group." Finally, a decision by the Panel to adopt its proposal would encourage the "larger Federal sector community" to increase the mutual efficiency of the "labor-management interaction" by taking advantage of technology.

    b. The Employer’s Position

    The Employer accepts the Arbitrator’s recommendation for settlement on this issue and, as it did before the Arbitrator, continues to object to the Union’s proposal "in its entirety." Quarterly notification "could serve to delay implementation by up to 3 months," thereby reducing its flexibility to make necessary operational changes. Moreover, the section of the Union’s proposal that allows the quarterly notification procedure to be bypassed when there are "circumstances beyond control of the moving party" is too limited to prevent the Employer from having to delay important changes, such as those affecting its budget. As to equipment, that section of the proposal is "outside the scope of the agreed-upon ground rules" for these negotiations because they specifically provide that Article 34 of the national labor agreement, entitled "Access to Facilities and Services," would be addressed by a joint work group. In addition, providing the equipment sought by the Union would adversely impact the Employer’s budget and "raises internal security issues." With respect to the latter concern, the Employer’s policy is that employees and Union users should not have an expectation of privacy when using Government equipment. In fact, the proposal violates the parties’ separate agreement on internet policy which provides internet access to Union officials for conducting labor-management relations.

3.  Article 37, § 10.F(8)

    a. The Union’s Position

    The Union did not respond to the Panel’s order that the parties’ show cause why the Arbitrator’s primary recommendation for Article 37, § 10.F., should not be imposed to resolve their dispute over procedures for resolving impasses reached during mid-term bargaining.

    b. The Employer’s Position

    The Employer opposes the imposition of the Arbitrator’s primary recommendation. Instead, it proposes that his alternative recommendation be adopted. The Arbitrator’s alternative recommendation, which is a modified version of the Union’s initial proposal, is as follows:

(1)    If agreement is not reached, either party reserves the right to seek the services of the Federal Mediation and Conciliation Service (FMCS) and, if necessary, the Federal Service Impasses Panel (FSIP). Alternatively, either party reserves the right to continue negotiations with the assistance of a mutually chosen mediator/arbitrator. The Employer and the Union will designate one arbitrator from the existing panel to serve as the mediator/advisory arbitrator.

(2)    The parties will make every attempt to schedule the mediation/advisory arbitration session within three weeks of the conclusion of bilateral negotiations. The mediation/advisory arbitration process will be limited to five days. The mediator/arbitrator will first attempt to mediate outstanding issues. If agreement cannot be reached on all outstanding issues, the mediator/arbitrator will provide written recommendations to resolve the outstanding issues.

(3)    Any impasse(s) remaining after the mediator/arbitrator issues the written recommendations will be resolved through the statutory FMCS and FSIP process. A copy of the arbitrator’s written recommendations will accompany all requests for assistance. The party that moves the remaining impasse(s) to the FMCS and the FSIP for resolution will assume the burden of proof as to why the mediator/advisory arbitrator’s recommendations are not acceptable. Under these circumstances, the party invoking the services of FMCS will pay all of the fees and expenses of the mediator/arbitrator. Otherwise, the costs will be split equally by the parties.

The Arbitrator’s primary recommendation "was never proposed by either party and is incomplete as written." For example, the wording in their ground rules agreement is tied to a specific date and "does not respond to the interests of either party to have a clearly defined guide as to the date when mediation/arbitration should begin." It would require the parties, at a minimum, to return "to the table to agree on the introductory language and on dates when mediation/arbitration should begin." In addition, adopting the Arbitrator’s alternative recommendation also would "comply with the spirit" of the Panel’s Order to Show Cause.

4. Article 45(9)

   a. The Union’s Position

    The Union objects to imposition of the Arbitrator’s recommendation, and proposes that the following wording be adopted to resolve the parties’ dispute:

The Employer will pay to employees the maximum tax-free subsidy allowed by law for using public transportation. The Employer will continue current practices for disbursing funds, but if it wishes to change those practices during the life of this agreement, it may make such a proposal to NTEU and NTEU will have the right to bargain over those proposals. The Employer’s obligation to subsidize or otherwise support public transportation extends to all options under law, e.g. van pools. The Employer will implement a program that offers employees the option to exclude from taxable wages and compensation employee commuting costs incurred through the use of mass transportation and van pools up to the maximum allowed by law.

The Arbitrator’s recommendation on this issue creates a "substantial inequity," which would be in effect "for the life of the contract," that justifies the adoption of its proposal. Prior to the issuance of Executive Order (E.O.) 13150, eligible unit employees, regardless of location, received the same monthly transit subsidy of $21. After its issuance, agencies were required "immediately to pay the maximum transit subsidy to Federal employees in the Washington, D.C. area." Although the White House presumably had its reasons for doing this, unit employees "do not understand why the historical equity within Customs was destroyed." Moreover, IRS, among other agencies, decided to pay the maximum subsidy to all employees using public transportation, as the Union proposes here. In addition to the "obvious inequity of the situation," any local agreement or practice whereby employees outside the D.C. area (such as in New York City "where private transportation has become almost impossible") receive the maximum subsidy would violate the Arbitrator’s recommendation. Nor have previous Panel decisions "ever tolerated different levels of subsidies within agencies." Finally, at no time during negotiations did the Employer object to the Union’s proposal on the basis of cost, which the Union estimates would be about $720,000 more than Customs pays now. Such an increase is "modest," given the overall size of the Employer’s budget and that the current stipend has been in place since 1993.

    a.  The Employer’s Position

    The Employer would accept imposition of the Arbitrator’s recommendation for settlement regarding transit subsidies. E.O. 13150 "resulted in a threefold increase for employees in the National Capital Region" without providing additional funding in the Agency’s budget. The number of participants also increased, "which also impacts the budget in a manner that cannot be controlled." This is why the Employer decided not to raise the amount paid outside the Washington, D.C., area. While the Employer is "not against a subsidy," it estimates that the Union’s proposal would increase the cost of the program by $3.5 million, "which would certainly affect our budget." Finally, by including "car pools in an unexplained manner," its proposal also "could significantly increase the costs of the program."

5. Duration of Imposed Provisions

   a. The Union’s Position

   In its response to the Order to Show Cause, the Union did not address paragraph 4, requiring it to demonstrate why the Panel should not order that any provisions it imposes to resolve the dispute in this case remain in effect for the term of the national labor agreement following its renegotiation.

    b. The Employer’s Position

    The Employer "accepts the intent" of this portion of the Panel’s Order to Show Cause, "with the addendum that the word ‘provisions’ above would include matters rejected as articles under the term agreement by the Arbitrator." These would include the Union’s proposed articles regarding transit subsidies, child care tuition assistance, and domestic relocation benefits. This would ensure that "proposals that were rejected do not reappear in the upcoming term re-negotiation."

CONCLUSIONS

    Having carefully considered the evidence and arguments presented by the parties, we conclude that the Arbitrator’s recommendations should be imposed to resolve their impasse over Article 31, § 10, Step 2.E., Article 37, § 6.A, and Article 45, and that the Arbitrator’s alternative recommendation should be adopted to resolve their impasse over Article 37, § 10.F. Before explaining our rationale, however, it is necessary to address directly the Union’s statement that the Panel’s previous determination not to assert jurisdiction over the issues in Article 37, § 1.A and C.2 "has upset the balancing of interests which the Arbitrator attempted to reach in his decision." To the extent the Union is implying that the Panel’s previous determination regarding the aforementioned issues should have a bearing on our deliberations on the merits of the matters that remain before us, such implication must be rejected. In this regard, the parties mutually agreed to a dispute resolution procedure empowering a private individual to conduct a factfinding hearing, engage in mediation concerning issues they could not resolve themselves, and make recommendations to them for settling any matters that remained after his mediation efforts were completed. There is no evidence that the parties instructed the Arbitrator to set forth any rationale in support of his recommendations and, as a consequence, little was provided. In short, there is no way of knowing how the Arbitrator reached his recommendations. Our assumption is that they were made as the Panel would have made them, on an issue-by-issue basis, after carefully evaluating the evidence in the record. If this is not the case, this would appear to be a defect in the process the parties themselves created, rather than a function of the Panel’s determination to decline jurisdiction over matters which are arguably nonnegotiable.(10)

    Turning to the merits of the issues properly before us pertaining to Article 31, § 10, Step 2.E., Article 37, § 6.A, and Article 45, in our view the Union has failed to show cause why the Arbitrator’s recommendations should not be imposed. Our review of the record reveals that, for the most part, the Union has presented the identical evidence and arguments to the Panel in support of its current positions on these issues as were previously rejected by the Arbitrator when he offered his recommendations for settlement.(11) In such circumstances, the Panel ordinarily favors deferring to the process mutually agreed to by the parties, which respects their understanding that the Arbitrator’s recommendations would play a dominant role in any final agreement, and we are not persuaded that this case should be an exception. In fact, it is particularly important to reinforce the weight of the Arbitrator’s recommendations here because it appears that the parties have essentially agreed to employ a similar dispute resolution process with respect to future mid-term impasses.

    On the Article 37, § 10.F, issue concerning the procedures for resolving impasses reached during mid-term bargaining, we shall order the adoption of the Arbitrator’s alternative recommendation because his primary recommendation was proposed by neither side, and is ill-suited to meet the parties’ current needs. Moreover, the substantive differences between the two alternatives he recommended appear to be minor, so minor that the Union chose not to address the matter in its response to the Order to Show Cause.(12) Finally, as to the issue addressed in paragraph 4 of the Order to Show Cause, the Employer has demonstrated that our proposed wording is too narrow to meet the purpose for which it was intended. By ordering only that any provisions the Panel imposes to resolve this impasse over mid-term reopener negotiations remain in effect for the term of the national labor agreement following its renegotiation, issues rejected for inclusion in the parties’ contract could be raised by either side during upcoming successor agreement negotiations. This is inconsistent with the stability and repose we sought to ensure in issuing this portion of the Order to Show Cause. It is also inconsistent with the statutory rights of the parties previously established by the FLRA.(13) Accordingly, we shall order the adoption of wording which cures this defect.

ORDER

    Pursuant to the authority invested 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 5 C.F.R. § 2471.11(a) of its regulations, orders the following:

1.  Article 31, § 10, Step 2.E

    The parties shall adopt the Arbitrator’s recommendation for settlement.

2.  Article 37, § 6.A

    The parties shall adopt the Arbitrator’s recommendation for settlement.

3.  Article 37, § 10.F

    The parties shall adopt the Arbitrator’s alternative recommendation for settlement.

4.  Article 45

    The parties shall adopt the Arbitrator’s recommendation for settlement.

5.  Duration of Imposed Provisions

    Provisions regarding any subjects specifically imposed or rejected in the resolution of this case shall remain imposed or rejected for the term of the parties’ national labor agreement following its renegotiation.

6. All Other Matters

    With the exception of the two issues over which the Panel declined to assert jurisdiction, and Article 31, § 13.C (grievances involving mixed cases), the parties shall adopt the Arbitrator’s recommendations for settlement with respect to any matter not specifically identified in the previous sections of this Order. On Article 31, § 13.C, the parties shall adopt the wording proposed by the Union on September 26, 2001.

By direction of the Panel.

H. Joseph Schimansky

Executive Director

June 7, 2002

Washington, D.C.

1. Pursuant to the parties’ ground rules for the negotiations that resulted in this request for assistance, their dispute initially was submitted to Arbitrator E. William Hockenberry, who was to provide mediation assistance and, if necessary, recommendations to the parties for settlement of any issues that were not resolved through mediation. He initially conducted a factfinding hearing/mediation session from December 4 through 8, 2000. After a lengthy process which included the filing of post-hearing briefs and an additional “reply” brief by the Union, followed by additional mediation and post-mediation written submissions, the Arbitrator issued his recommendations for settlement on May 4, 2001.

2. The Union’s proposals on these issues involve Article 37, § 1.A and C.2, respectively. Under both proposals the Employer would be obligated to engage in mid-term negotiations over a matter unless it was “specifically addressed in this Agreement or an existing Memorandum of Understanding.” The Employer alleged before the Arbitrator, in both its post-hearing brief and post-mediation written submission, and later before the Panel, that the wording proposed by the Union concerns the waiver of a statutory right, a “permissive matter to management” over which it declines to bargain. The Arbitrator nevertheless recommended the adoption of the Union’s proposals on both issues. The Panel declined to assert jurisdiction because it was unclear whether an impasse existed with respect to these matters. It also should be noted that the Employer agreed to negotiate over matters covered by section 7106(b)(1) of the Statute in Article 37, § C.2, of the parties’ expired national labor agreement. On August 2, 2001, the Employer notified the Union that it had “decided to exercise its statutory right to terminate and no longer be bound by the provisions in the national agreement in which we agreed to bargain over matters covered by 5 U.S.C. 7106(b)(1).”

3. During the initial investigation, the Employer opposed the Union’s motion that the Panel issue an order to show cause why the Arbitrator’s recommendations for settlement should not be imposed in their entirety to resolve the impasse.

4. The parties define “mixed cases” as grievances that involve both Equal Employment Opportunity (EEO) and non-EEO issues.

5. As to those matters where the Arbitrator made recommendations for settlement that the parties either found acceptable, or did not contest, there is no basis for imposing alternative wording. Accordingly, we shall order the adoption of the Arbitrator’s recommendations for settlement on those issues, and they shall not be addressed further herein. In addition, with respect to Article 31, § 13.C, concerning grievances involving mixed cases, referenced in paragraph 2 of the Order to Show Cause, in its response the Employer states that it accepts the wording proposed by the Union on September 26, 2001. Since the Union did not respond to this portion of the Order to Show Cause, there also is no basis for imposing alternative wording on this issue. Therefore, we shall order the adoption of the wording proposed by the Union on September 26, 2001 to settle that issue. See paragraph 6 of the Order at the end of this decision.

6. The Union’s final offer to Arbitrator Hockenberry on Step 2.E of the grievance procedure was as follows:

Suspensions of one (1) to fourteen (14) days may be appealed by NTEU through the expedited arbitration procedures of Article 32, Section 11.A within fourteen (14) days after receipt of the decision to effect the suspension (thereby waiving the Step 2 panel), or beginning at Step 2 of the grievance provisions of this Article within seven (7) days after receipt of the decision to effect the suspension. In addition, the Employer, within fourteen (14) days of the final decision to suspend, may serve written notice to the other party that it is waiving the Step 2 panel meeting. If the Employer waives the Step 2 panel meeting, expedited arbitration must be invoked by the Union within fourteen days of the receipt of the waiver decision. If either party waives the Step 2 panel meeting and expedited arbitration is invoked, the Employer will pay 75% of the expedited arbitration expenses.
The Arbitrator recommended the adoption of the Union’s final offer to resolve the parties’ dispute over this matter, except for “the last sentence as to apportionment of 75 percent of costs to the Employer. Delete that final sentence. Shared process, shared decisions, shared costs.”

7. The Arbitrator rejected new wording offered by both parties regarding this section and recommended maintaining the status quo. Article 37, Section 6.A of the expired agreement provides: “The parties agree that proposed changes which apply on a nationwide basis shall be negotiated at the National Office.”

8. On this issue, the Arbitrator recommended acceptance of the “current med-arb provisions in place for national negotiations reaching impasse established in ground rules for this instant proceeding,” which are as follows:

A. If issues remain after all negotiating sessions are completed, the issue(s) will be submitted to a mutually agreed upon neutral, during the week of December 4, 2000. The neutral will use a combination of mediation and arbitration skills to encourage a voluntary settlement and, lacking that, issue a written recommendation for settlement.
B. The parties are encouraged to adopt the neutral’s recommendation(s) for a settlement. The parties will make a sincere effort to reach agreement on these recommendations. In addition, if only one party rejects the recommendations or any portion thereof, that party will pay all the costs of the neutral, e.g. travel, per diem, and fees. Otherwise these costs will be split equally by the parties. If the neutral’s recommendation(s) are not accepted by either party, either party may choose to pursue the impasse through the normal impasse resolution process, de novo, as if the neutral’s recommendations had never been issued.

9. On this issue, which involves transit subsidies, the Arbitrator essentially recommended the adoption of the Employer’s proposal. He also recommended, contrary to the Employer’s position that the provision be in a separate memorandum of understanding, that it be incorporated directly into the parties’ national labor agreement. The Arbitrator also added wording proposed by the Union (see paragraph 4 below) concerning bargaining over any changes in current practices. The Arbitrator’s recommended wording is as follows:

In accordance with Executive Order 13150, the Agency will offer each qualified employee within the National Capital Region (NCR) who commutes daily to work on a qualified mass transit system or in a qualified van pool either: 1) a monthly transit pass; or 2) an exclusion from taxable income. The value of the monthly transit pass or monthly exclusion from taxable income will be equal to the amount actually paid by the employee for that month, but in no event will it exceed the maximum amount allowed by law. In accordance with Executive Order 13150, the Agency will offer to all qualified employees outside of the NCR who commute daily to work on a qualified mass transit system or in a qualified van pool an exclusion from taxable income equal to the amount actually paid by the employee for that month, but in no event will it exceed the maximum amount allowed by law. The Employer will continue current practices for disbursing funds, but if it wishes to change those practices during the life of this agreement, it may make such a proposal to NTEU and NTEU will have the right to bargain over those proposals.

10. On December 13, 2001, the Union filed a petition for review with the FLRA to determine the negotiability of its proposals. We also note that the Arbitrator decided to recommend the Union’s position on these two issues even though the Employer stated unequivocally, first in its post-hearing