[ v17 p786 ]
The decision of the Authority follows:
17 FLRA No. 108 AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, AFL-CIO, LOCALS 2477 and 2910 Union and LIBRARY OF CONGRESS Agency Case No. O-NG-618 DECISION AND ORDER ON NEGOTIABILITY ISSUES The petition for review in this case comes before the Authority pursuant to section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute) and raises issues concerning the negotiability of three Union proposals. Upon careful consideration of the entire record, including the parties' contentions, the Authority makes the following determinations. Union Proposal 1 Section 2D-- Any and all standards used by the Library to evaluate the performance of employees shall be fair and equitable and shall be implemented and administered in such a way that every employee can reasonably be expected to obtain the standard. In American Federation of Government Employees, AFL-CIO, Local 32 and Office of Personnel Management, Washington, D.C., 3 FLRA 784 (1980), based upon the record before it in that case, particularly the Union's statement as to the intent of its proposal, the Authority interpreted a proposal requiring that performance standards be fair and equitable as providing a criterion for the application to employees of performance standards established by management. The Authority held that such a general, nonquantitative requirement by which the application of performance standards may subsequently be evaluated in a grievance by an employee who believes that he or she has been adversely affected thereby did not directly interfere with management's right, under section 7106(a)(2)(A) and (B) of the Statute, to establish performance standards and, thus, was within the duty to bargain. In the present case, the Union explicitly interprets its proposal, like the proposal in the Office of Personnel Management case, as prescribing criteria only for reviewing the application of a performance standard to an employee by management; the proposal would not authorize a grievance over the standard itself. /1/ Similarly, as to that portion of the proposal which requires that performance standards be so administered that each employee can reasonably be expected to achieve the standards, the Union explicitly states that the proposal does not require that a standard be established at any given level. /2/ Rather, the proposal only requires that management's implementation of the standard not deprive an employee of a reasonable opportunity to attain the standard. /3/ Under this interpretation, which is adopted for the purpose of this decision, the proposal would not require the Agency to establish a particular performance standard, nor would it permit arbitral review of the standard itself, or otherwise affect the quality, quantity, or timeliness of work production. Cf. American Federation of Government Employees, AFL-CIO, Local 1968 and Department of Transportation, Saint Lawrence Seaway Development Corporation, Massena, New York, 5 FLRA 70, 79-80 (1981), affirmed sub nom. American Federation of Government Employees, AFL-CIO, Local 1968 v. Federal Labor Relations Authority, 691 F.2d 565 (D.C. Cir. 1982), cert. denied, 461 U.S. 926, 103 S.Ct. 2085 (1983), wherein the Authority held that proposals which subject the exercise of management's rights to identify critical elements and establish performance standards to the negotiated grievance procedure are nonnegotiable because they would permit arbitrators to overturn an agency's determination of critical elements and performance standards and render awards which would require the agency to use different elements and standards. In this connection, under the proposal in dispute herein, the arbitrator would only determine whether an employee had had a reasonable opportunity to achieve the standard established by the Agency, i.e., whether the application of the standard was fair and equitable, but would not determine whether the standard itself was fair and equitable. See Union Proposal 5 in Office of Personnel Management, at 790-94 and subsection 4 of Union Proposal 4 in Saint Lawrence Seaway Development Corporation, at 80. In this regard, the proposal at issue herein is distinguishable from Union Proposal 3 in American Federation of Government Employees, Local 32 and Office of Personnel Management, 16 FLRA No. 127 (1984). The proposal at issue in that case, both by its language and by the union's stated intent, required that performance standards themselves be fair and equitable and, unlike the proposal at issue herein, was not restricted to the application of those standards. Thus, the Authority found that the proposal was intended to prescribe limitations on the content of performance standards and, as such, authorized arbitrators to substitute their judgment as to the proper content of those standards for that of the agency. Based upon its decision in Saint Lawrence Seaway Development Corporation, therefore, the Authority held that the proposal was nonnegotiable under section 7106(a)(2)(A) and (B) of the Statute. However, as indicated above, the proposal at issue herein, like Union Proposal 5 in Office of Personnel Management, 3 FLRA 784, 790-94 and subsection 4 of Union Proposal 4 in Saint Lawrence Seaway Development Corporation, 5 FLRA 70, 80, would not authorize an arbitrator to review the Agency's determination of its performance standards, but only to consider whether the standards which had been established were applied in a fair and equitable manner. Accordingly, for the reasons set forth above, in particular the Authority's dispositions as to Union Proposal 5 in Office of Personnel Management, 3 FLRA 284, 790-94 and subsection 4 of Union Proposal 4 in Saint Lawrence Seaway Development Corporation, Union Proposal 1 herein is within the Agency's duty to bargain under the Statute. Union Proposal 2 Section 6B-- An employee given an "Outstanding" rating shall receive an incentive award. Union Proposal 3 Section 6D-- An employee whose performance substantially exceeds normal requirements in one or more of the most important job elements will be given a special achievement award under 5 USC 45. Union Proposals 2 and 3 prescribe the levels of achievement under the Agency's performance appraisal system which are sufficient to entitle an employee to an incentive award. In thus establishing the criteria governing the Agency's decision to reward employee performance, these proposals are substantially to the same effect as Union Proposals 5 and 6 in National Treasury Employees Union and Internal Revenue Service, 14 FLRA 463, 469-471 (1984) (Member Haughton dissenting), appeal docketed sub nom. National Treasury Employees Union v. Federal Labor Relations Authority, No. 84-1292 (D.C. Cir. July 9, 1984). In that case, the Authority, in considering the negotiability of those proposals, which concerned incentive pay, stated as follows: . . . (A)n integral aspect of management's exercise of its rights to assign work and direct employees is to establish a system of rewards and sanctions for employee performance, including the provision of incentives to encourage and reward superior performance. The nature of the incentive (e.g., monetary or nonmonetary), the amount of a monetary incentive, and the circumstances under which an incentive may be awarded are essential components of management's judgment. That is, they directly relate to the potential success of the incentive in motivating the performance of particular job tasks and, hence, to some extent determine the priorities for accomplishing the agency's work. The Authority determined, therefore, that because those proposals "prescribed" the amount of the award of incentive pay and the circumstances under which it would be paid, the proposals directly interfered with management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute and were outside the duty to bargain. In a similar manner, Union Proposals 2 and 3 herein are determinative of the conditions under which the Agency will grant an incentive award, i.e., the attainment of a stated level of achievement or performance rating. Thus, for the reasons more fully set forth in the Internal Revenue Service case, Union Proposals 2 and 3 directly interfere with management's rights, under section 7106(a)(2)(A) and (B), to direct employees and assign work through the establishment of rewards for employee performance /4/ and, thus, are outside the duty to bargain. /5/ Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations, IT IS ORDERED that the Union's petition for review as to Union Proposals 2 and 3 be, and it hereby is, dismissed. IT IS FURTHER ORDERED that the Agency shall upon request (or as otherwise agreed to by the parties) bargain concerning Union Proposal 1. /6/ Issued, Washington, D.C., May 7, 1985 Henry B. Frazier III, Acting Chairman William J. McGinnis, Jr., Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- /1/ Union Reply Brief at 5. /2/ Id. at 3-4. /3/ Id. /4/ The Union explicitly concedes that the proposals concern rewards for employee performance. Union Reply Brief at 8. /5/ In view of the Authority's decision herein, it is unnecessary to consider the Agency's arguments that the proposals are outside the duty to bargain. /6/ In deciding that the proposal is within the duty to bargain, the Authority makes no judgment as to its merits.