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The decision of the Authority follows:
25 FLRA No. 96 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 1770 Union and U.S. DEPARTMENT OF DEFENSE DEPENDENT SCHOOLS, FORT BRAGG, NORTH CAROLINA Agency Case No. 0-NG-892 DECISION AND ORDER ON NEGOTIABILITY ISSUE /1/ I. Statement of the Case This case comes before the Authority because of a negotiability appeal filed under section 7105(a)(2)(D) and (E) of the Federal Labor-Management Relations Statute (the Statute) and presents issues as to the negotiability of a single Union proposal. We find that the proposal is negotiable. /2/ II. Proposal Employees will be paid an amount equal to the wages or salary paid to other employees at Fort Bragg in equivalent wage grade or General Schedule positions. III. Positions of the Parties The Agency contends that the proposal (1) conflicts with law; (2) conflicts with an agency regulation for which a compelling need exists; (3) does not concern a condition of employment within the meaning of the Statute, and (4) interferes with the Agency's right to determine its budget. The Union disputes the Agency's contentions. IV. Analysis A. The Proposal Does Not Conflict with 20 U.S.C. Section 241 Section 241 of title 20 relevantly requires that under specified circumstances the Secretary of Education shall make arrangements for providing a free public education for children residing on Federal property and children of members of the Armed Forces on active duty. It further provides that for purposes of providing such education personnel may be employed whose compensation and other incidents of the employment relationship may be fixed without regard to "the Civil Service act and rules" and specified portions of Title 5. 20 U.S.C. Section 241(a). Additionally, it states that "to the maximum extent practicable" the Secretary shall limit total payments made for such education within the continental United States to an amount per pupil which does not exceed the amount spent in comparable communities in the state. 20 U.S.C. Section 241(e). The Agency contends that under these provisions the pay and benefits of the nonprofessional school personnel involved (custodians, maintenance workers, secretaries, and library clerks) must be comparable to the pay and benefits of personnel in schools in comparable communities -- in this case comparable communities in North Carolina. It contends that, because the payment of salaries as proposed would exceed the salaries and benefits provided school personnel in such communities, the proposal conflicts with the limitations imposed by 20 U.S.C. Section 241. Additionally, it asserts, based on its interpretation of the legislative history underlying one of the laws /3/ which established the provisions of 20 U.S.C. Section 241, that one purpose of that particular law was to limit school personnel salaries and benefits to levels of school personnel in comparable communities. Specifically, it relies on the Senate Report accompanying the legislation which became law in which the committee "took note" of and reproduced a letter from the Secretary of the Army which concerned the legislation before it. /4/ The letter expressed support for that portion of the legislation which provided for the employment, compensation and other conditions of employment of teachers to be established without regard to various Civil Service laws and rules. It noted that the proposed legislation reflected existing practice and cited some "illustrative" practices. One of the illustrative practices cited was: (1) Salary schedules are set up on the basis of a school year consisting of 9 or 10 months. The Federal Employees Pay Act of 1945, as amended (5 U.S.C. 944(c)(1)), requires computation on a calendar year basis. We find that the proposal conflicts with neither the express terms of 20 U.S.C. Section 241 nor the intent of Congress underlying that provision. First, with respect to the argument that the proposal would conflict with the express provisions of 20 U.S.C. Section 241(e) by causing the Agency to exceed the limitations on the total per pupil costs of providing an education, the Authority rejected the same argument in Fort Bragg Unit of North Carolina Association of Educators, National Education Association and Fort Bragg Dependents Schools, Fort Bragg, North Carolina, 12 FLRA 519 (1983), noting that compensation is only one aspect of total cost. As in Fort Bragg, the Agency in this case has not demonstrated that the proposal would necessarily prevent it from achieving the overall cost limitations specified in 20 U.S.C. Section 241(e). /5/ For the reasons set forth in Fort Bragg we find that the proposal does not conflict with the terms of 20 U.S.C. Section 241. Second,with respect to the intent of Congress in enacting 20 U.S.C. Section 241, the Agency's argument is identical to the one we rejected in Fort Knox Teachers Association and Fort Knox Dependent Schools 25 FLRA No. 95 (1987). In that decision we found that the Agency had not demonstrated that Congress intended to prohibit the payment of overtime compensation in some circumstances to teachers. Similarly, here we find for the reasons set forth in Fort Knox, that the Agency has not demonstrated that Congress intended to prohibit the payment of compensation to the employees covered by the proposal which is equal to that paid to other employees at Fort Bragg in equivalent positions. B. Compelling Need The Agency asserts that the proposal conflicts with a provision of its regulations which states that: /6/ 1-7. Compensation factors. Education provided . . . will be considered comparable to free public education offered by selected communities in the State when the following factors are, to the maximum extent practicable, equal: . . . . . . . h. Salary schedules It contends that this provision implements in a nondiscretionary manner a mandate of Congress to pattern personnel practices for the non-teaching school personnel involved here after those found in state school systems as opposed to those found in the Federal service, generally. Assuming without deciding that the proposal conflicts with the Agency's regulation, we find that the Agency has not established a compelling need under Section 2414.11(c) of the Authority's regulations. The regulation in question and the Agency's supporting argument here are the same as we addressed in Fort Knox Dependent Schools. We concluded in that decision that the agency did not establish that the language of 20 U.S.C. Section 241 or the intent of Congress in enacting the provisions in question mandates adoption of any specific employment or compensation practices. We therefore found that the agency's regulation did not reflect the nondiscretionary implementation of a mandate of Congress. Hence, for the reasons set forth in Fort Knox Dependent Schools, we find that the Agency has not demonstrated that a compelling need exists for its regulation to bar negotiations on the proposal. C. The Proposal Concerns a Condition of Employment We find that the Agency has not supported its argument that the proposal does not concern conditions of employment. In support of its argument it asserts that Congress did not intend pay to come within the ambit of "conditions of employment." We recently addressed this issue in detail in American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Forc e, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986), appeal filed sub nom. Department of the Air Force, Eglin Air Force Base, Florida v. FLRA, 87-3073 (11th Cir. Feb. 2, 1987). We reaffirmed in that decision that nothing in the Statute or its legislative history bars negotiation of proposals concerning compensation of employees insofar as (1) the matters proposed are not specifically provided for by law and are within the discretion of the agency and (2) the proposals are not otherwise inconsistent with law, Government-wide rule or regulation or an agency regulation for which a compelling need exist. Hence, we find that the proposal relating to compensation concerns a condition of employment about which, as noted in section IV A above, the Agency has discretion pursuant to 20 U.S.C. Section 241. Fort Bragg Unit of North Carolina Association of Educators, National Education Association and Fort Bragg Dependents Schools, Fort Bragg, North Carolina, 12 FLRA 519 (1983). D. The Proposal does not Interfere with the Agency's Right to Determine its Budget In American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604 (1980), enforced as to other matters sub nom. Department of Defense v. Federal Labor Relations Authority, 659 F.2d 1140 (D.C. Cir. 1981), the Authority held that in order to demonstrate that a union proposal directly interferes with management's right to determine its budget under section 7106(a)(1) it is necessary for the agency either to show that the proposal prescribes the programs and operations to be included in the agency's budget or the amount to be allocated for them, or to make a substantial demonstration that the anticipated increase in costs is significant and unavoidable and is not offset by compensating benefits. In the present case, the Agency claims that the proposal would result in a significant increase in costs -- $36,589 based on the then current budget -- which are not offset by compensating benefits. The proposal concerns a program or operation which already exists, i.e., wages for employees, and is currently funded by the Agency's budget. Moreover, the proposal does not prescribe the amount to be allocated to this program or operation. Thus, in this respect, the proposal does not directly interfere with the Agency's right to determine its budget. Furthermore, the Agency has not in our view made a substantial demonstration that the implementation of the proposal will result in a significant, unavoidable increase in costs. The claimed increase of $36,589 with respect to the bargaining unit is less than 1/3 of 1 percent of the $12,000,000 Fort Bragg school budget for the same period. National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans Districts, 3 FLRA 747, 764-66 (1980). Therefore, it is not necessary to consider whether the alleged increase in costs is outweighed by compensating benefits. Consequently, in this respect also the proposal at issue does not directly interfere with the right of the Agency to determine its budget under section 7106(a)(1). VI. Conclusion and Summary The proposal is within the duty to bargain. It concerns a condition of employment about which the Agency has discretion under 20 U.S.C. Section 241. It does not conflict with either 20 U.S.C. Section 241 or with an Agency regulation for which a compelling need has been established, as asserted by the Agency. Lastly, it does not interfere with the Agency's right to determine its budget under section 7106(a)(1). VI. Order The Agency must negotiate upon request, or as otherwise agreed to by the parties, concerning the Proposal. Issued, Washington, D.C., February 27, 1987. /s/ Henry B. Frazier III, Member /s/ Jean McKee, Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- (1) Chairman Calhoun dissents for the reasons stated in his separate opinion. (2) In finding the proposal negotiable, we make no judgment as to its merits. (3) Pub. L. No. 89-77, 79 Stat. 243 (1965), reprinted in 1965 U.S. Code Cong. & Ad. News 257. (4) S. Rep. No. 311, 89th Cong., 1st Sess., reprinted in 1965 U.S. Code Cong. & Ad. News 1910. Relevant portions appear as an Appendix to this Decision. (5) If, in combination with other practices and proposals relating to expenditures, such circumstances would result, the Agency has recourse to raising this argument before the Federal Service Impasses Panel in support of its position as to the merits of this and other proposals should an impasse occur in conjunction with negotiations. (6) AR 352-3. Separate Opinion of Chairman Calhoun I agree with the majority that the Agency's arguments in this case are essentially the same as those in Fort Knox Teachers Association and Fort Knox Dependent Schools, 25 FLRA No. 95 (1987). Therefore, for the reasons stated in my opinion in that case, as well as my opinion in American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986), petition for review filed sub nom. Department of the Air Force, Eglin Air Force Base, Florida v. FLRA, 87-3073 (11th Cir. February 2, 1987), I would find that the Agency is not obligated under the Statute to bargain over the Union's proposal. Accordingly, I do not join the majority opinion. Issued, Washington, D.C., February 27, 1987. /s/ Jerry L. Calhoun, Chairman Appendix S. REP. NO. 311, 89th Cong., 1st Sess., provides in relevant part: Section 2 of H.R. 5874, if enacted, would modify conditions of employment of teachers in dependents' schools in the United States. In adopting section 2 as an amendment to H.R. 5874 the committee took note of the request contained in correspondence under date of March 4, 1965, received from Honorable Stephen Ailes, Secretary of the Army, reproduced below: Department of the Army, Washington, D.C. Hon. Hubert H. Humphrey, President of the Senate. Dear Mr. President: A draft of legislation to amend section 6(a) of the act of September 30, 1950, relating to conditions of employment of teachers in dependents' schools, is enclosed. This proposal is part of the Department of Defense's legislative program for the 89th Congress and the Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this proposal for the consideration of the Congress. The Department of the Army has been designated as the representative of the Department of Defense for this legislation. It is recommended that the proposal be enacted by Congress. PURPOSE OF THE LEGISLATION The purpose of the proposed legislation is to amend section 6(a) of the act of September 30, 1950, chapter 1124, as amended (20 U.S.C. 241(a)), to provide that the employment, compensation, and other conditions of employment of teachers engaged under that section 6 may be established without regard to the Civil Service Act and rules (5 U.S.C. 631), the Classification Act of 1949, as amended (5 U.S.C. 1071), the Annual and Sick Leave Act of 1951, as amended (5 U.S.C. 2061), the Federal Employees Pay Act of 1945, as amended (5 U.S.C. 901), the Veterans' Preference Act of 1944, as amended (5 U.S.C. 851), and the Performance Rating Act of 1950, as amended (5 U.S.C. 2001). . . . . . . . The military services had considered that the present language of section 6 was sufficiently broad to permit the extension of the salary fixing system and pay and leave practices applicable in public schools' jurisdictions to its teachers in the dependents' schools. Employment practices and contract clauses have been established, therefore, to reflect the practices which exist in the public schools. However, they vary considerably from the provisions of statutes affecting Federal employees generally. The following are illustrative of some of these practices: . . . . . . . (a) Salary schedules are set up on the basis for a school year consisting of 9 or 10 months. The Federal Employees Pay Act of 1945, as amended (5 U.S.C. 944(c)(1)), requires computation on a calendar year basis. . . . . . . . The Comptroller General has ruled Comp. Gen. B-138773, May 15, 1959) that the general language of section 6 exempts school personnel only from the Civil Service Act and rules, as amended, and the Classification Act of 1949, as amended, and that other laws which affect Federal employees continue to apply to personnel in the dependents' schools. In his letter to the Secretary of Defense, dated November 13, 1961 Comp. Gen. B-146622), the Comptroller General stated further that the present practices could be continued temporarily with the understanding that clarifying legislation would be developed and presented for consideration during the 2d session of the 87th Congress. A legislative proposal was submitted to the Congress on June 7, 1962, and resubmitted on January 29, 1963; however, there was no action taken with respect to the proposal. . . . . . . . Based upon the Department's experience in operating section 6 schools, it is highly desirable that the personnel practices for instructional personnel be patterned after those usually encountered in the teaching profession rather than those which have been developed for the Federal service as a whole. The attached draft legislation would provide clear legislative authority considered necessary to permit continuation of present practices.