[ v17 p997 ]
The decision of the Authority follows:
17 FLRA No. 134 U.S. DEPARTMENT OF EDUCATION, DIVISION OF CIVIL RIGHTS, ATLANTA, GEORGIA Activity and AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL UNION NO. 3887 ATLANTA, GEORGIA Union Case No. 0-AR-688 DECISION This matter is before the Authority on exceptions to the award of Arbitrator Ralph Roger Williams filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute and part 2425 of the Authority's Rules and Regulations. The parties submitted to arbitration the issue of whether the Activity's denial of a within-grade increase to the grievant was in violation of the parties' collective bargaining agreement. The Arbitrator ruled that the Activity had violated the agreement because the Activity had failed to sustain by a preponderance of the evidence that the disputed aspects of the grievant's work were not being performed at an acceptable level of competence (the negative determination). The Arbitrator found that grievant's work product met acceptable standards and consequently allowed the grievance and granted the grievant the within-grade increase retroactively. In its first exception the Agency contends that the award is contrary to law. The Authority however concludes that the Agency fails to establish that the award is deficient. The Authority has uniformly held that in order for an award of backpay to be authorized under the Back Pay Act, 5 U.S.C. 5596, there must be not only a determination that the aggrieved employee was affected by an unwarranted personnel action, but also a determination that such unwarranted action directly resulted in the withdrawal or reduction in the pay, allowances, or differentials that the employee would otherwise have earned or received. E.g., American Federation of Government Employees, Local 51 and U.S. Department of the Mint, Old Mint Building, Customer Service Division, 15 FLRA No. 164 (1984). In addition, with respect to the denying or withholding of a within-grade increase, the Authority has recognized under 5 U.S.C. 5335(a) that in order for an employee to be entitled to the increase, the work of the employee must be determined to be at an acceptable level of competence. Social Security Administration and American Federation of Government Employees, AFL-CIO, 16 FLRA No. 76 (1984). Thus, in order for an award by an arbitrator of a retroactive within-grade increase to be authorized, the arbitrator must find that agency action in connection with the withholding or denying of the increase was unwarranted and that but for the unwarranted action, the grievant otherwise would have received the within-grade increase. In this regard, the arbitrator must find either that the negative determination was not sustained or that due to some action or failure to take action on the part of the agency, the work of the grievant was determined not to be at an acceptable level of competence when it otherwise would have been. See id. at 2. In terms of this case, as has been noted, the Arbitrator on finding a violation of the agreement, constituting the unjustified or unwarranted personnel action, further found that the negative determination had not been sustained and that the grievant's work met acceptable standards. Thus, the Arbitrator effectively found that but for the unwarranted action, the grievant otherwise would have received the within-grade increase. Consequently, the Arbitrator made the findings necessary for a proper award of a retroactive within-grade increase. In its exception in this respect, the Agency, however, has argued that these findings were based on the Arbitrator's determination that the Activity had failed to sustain the negative determination by a preponderance of the evidence, a standard the Agency contends is contrary to law. Citing to 5 U.S.C. 7701(c)( 1), /1/ the Agency claims that the standard of proof required in cases challenging the denial of a within-grade increase is substantial evidence. With the Arbitrator affirmatively finding that the "Grievant's work performance met acceptable standards," it is not clear, however, as maintained by the Agency, that the award is based only on the negative determination not having been sustained by a preponderance of the evidence. Nevertheless, the Agency in any event fails to establish that the award is deficient because the Arbitrator was required by law to apply the standard of substantial evidence. In this regard the Authority has previously held that section 7701(c) expressly pertains only to the appellate procedures of the Merit Systems Protection Board (MSPB) in reviewing agency decisions in any action appealed to MSPB and that accordingly section 7701(c) is not applicable to grievances submitted to arbitration. E.g., Naval Weapons Station, Yorktown, Virginia and National Association of Government Employees, Local R4-96, 13 FLRA 133 (1983). At the same time, the Authority recognized that under section 7121(e)(2) of the Statute, /2/ an arbitrator in certain matters is governed by the standards set forth in section 7701(c). However, that section of the Statute does not pertain to the denying or withholding of within-grade increases and therefore neither that section nor the standards set forth in section 7701(c) apply in this case. Consequently, contrary to the contention of the Agency, no specific standard of proof is required by law and the Authority has held that unless a specific standard of proof is required, an arbitrator may establish whatever standard the arbitrator considers appropriate and the award is not subject to being found deficient on that basis. Department of Defense Dependent Schools, Europe and Overseas Education Association, 4 FLRA 412 (1980). Furthermore, with such arbitrations not being subject to judicial review by the U.S. Court of Appeals for the Federal Circuit under section 7121(f) of the Statute, /3/ the Agency additionally has failed to establish that section 7701(c)(1) requires the application of the standard of substantial evidence to denials of within-grade increases. Although that is the standard determined by MSPB and the U.S. Court of Appeals for the Federal Circuit to be required by section 7701(c)(1), Parker v. Defense Logistics Agency, 1 MSPB 489 (1980); Gordon v. Veterans Administration, No. 84-1327 (Fed. Cir. Dec. 11, 1984), three other U.S. courts of appeal have held that the standard of preponderance of the evidence of section 7701(c)(1)(B) applies to denials of within-grade increases. Ommaya v. National Institutes of Health, 726 F.2d 827 (D.C. Cir. 1984); White v. Department of the Army, 720 F.2d 209 (D.C. Cir. 1983); Stankis v. EPA, 713 F.2d 1181 (5th Cir. 1983); Schramm v. Department of Health and Human Services, 682 E.2D 85 (3D Cir. 1982). Accordingly, for these reasons this exception provides no basis for finding the award deficient. In its other exceptions the Agency contends that the Arbitrator exceeded his authority by applying the standard of preponderance of the evidence because the parties had agreed that the Arbitrator was to apply the standard of substantial evidence, and that the Arbitrator failed to conduct a fair hearing if he considered the decision in Stankis v. EPA, 713 F.2d 1181 (5th Cir. 1983) because a copy of the decision was forwarded by the Union after the record before the Arbitrator was closed. The Authority concludes that the Agency in these exceptions fails to provide a basis for finding the award deficient. The Agency fails to establish that the parties had agreed that the Arbitrator was to apply the standard of substantial evidence. The Agency also fails to establish that the Arbitrator in any manner denied the Activity a fair hearing. Accordingly, the Agency's exceptions are denied. Issued, Washington, D.C. May 13, 1985 Henry B. Frazier III, Acting Chairman William J. McGinnis, Jr., Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- /1/ Section 7701(c)(1) pertaining to the appellate procedures of the Merit Systems Protection Board provides: (c)(1) Subject to paragraph (2) of this subsection, the decision of the agency shall be sustained under subsection (b) only if the agency's decision-- (A) in the case of an action based on unacceptable performance described in section 4303 of this title, is supported by substantial evidence, or (B) in any other case, is supported by a preponderance of the evidence. /2/ Section 7121(e)(2) provides: "In matters covered under sections 4303 and 7512 of (title 5) which have been raised under the negotiated grievance procedure in accordance with this section, an arbitrator shall be governed by section 7701(c)(1) of (title 5), as applicable." /3/ Section 7121(f) pertinently provides: In matters covered under sections 4303 and 7512 of this title which have been raised under the negotiated grievance procedure in accordance with this section, section 7703 of this title pertaining to judicial review shall apply to the award of an arbitrator in the same manner and under the same conditions as if the matter had been decided by the Board.