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The decision of the Authority follows:
27 FLRA NO. 1
GENERAL SERVICES ADMINISTRATION Agency and AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, NATIONAL COUNCIL 236 Union Case No. 0-AR-1243
I. Statement of the Case
This matter is before the Authority on exceptions to the award of Arbitrator Ellen M. Bussey filed by the Agency under section 7122(a) of the Federal Service Labor - Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations.
II. Background and Arbitrator's Award
The dispute in this case concerned the arbitrability of a grievance over the Agency's decision to reorganize some of its regional offices. According to the Arbitrator's award, the parties' collective bargaining agreement provided that certain management decisions, including a decision to reorganize, would be accomplished in accordance with applicable laws, rules, regulations, and the provisions of the agreement. The agreement defined "grievance" as any complaint concerning "the effect or interpretation, or a claim of breach of (the) agreement, or any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment." The agreement also provided in Article 2, Section 1, that "(in) the administration of all matters covered by (the) agreement, officials and employees shall be governed by existing or future laws, existing Government-wide regulations, and existing or future GSA regulations."
The only matter submitted to arbitration was whether the grievance was arbitrable. Specifically, the Union grieved the Agency's failure "to comply with OMB Circular A-105, dated April 4, 1974, when (the Agency) announced substantial changes in (GSA) Regions 1, 8 and 10, which in turn, violated Article 2, Section 1 of the National Agreement." Arbitrator's Decision at 3. The Union argued that for a matter to be grievable, conditions of employment must be affected and there must be a violation of law, rule, regulation or contract, and that all of these conditions have been met. The Agency contended before the Arbitrator that the matter was not grievable because the OMB Circular was not a law, rule, or regulation, but was merely an executive level policy document with which management need not comply. The Agency also contended that the reorganization of its employees is solely a management right under section 7106(a)(1) over which an arbitrator has no jurisdiction.
The Arbitrator found that the grievance was arbitrable. She rejected the Agency's argument that it was not compelled to comply with OMB Circular A-105 because the Circular was not issued by an "authority" and did not prescribe binding principles. She found that "a reading of OMB Circular A-105 leaves no doubt that it was intended to do more than provide the executive policy guidelines management claims." Arbitrator's Decision at 5. She further found that the Agency had "not introduced evidence to show that OMB Circular A-105 is sufficiently different from other OMB Circulars to make it an exception." Arbitrator's Decision at 6. She noted that in an earlier hearing, "the Agency never questioned that it, or the Union, (was) required to comply with OMB Circular A-76 (governing contracting out)." Id. She determined that, "(t)here being no evidence which differentiates the legal status of OMB Circular A-105 from that of OMB Circular A-(76), and the provisions of . . . the current Contract being identical to those of the Contract of May 1982 under which the Circular A-76 issue was raised and decided, it must be concluded that management's argument that the Circular's legal status does not meet the grievance requirements of the Contract has no merit." Arbitrator's Decision at 6. Accordingly, she concluded that the Circular has the force of law. She ruled, therefore, that the Agency's decision to reorganize the regions must comply with the provisions of the Circular as required by the collective bargaining agreement.
In response to the Agency's argument that the union cannot grieve the Agency's exercise of its right to reorganize under section 7106(a)(1) of the Statute, the Arbitrator stated that a review of the parties' agreement indicates that the Agency had "surrendered to the Union" some of its rights. Arbitrator's Decision at 7. The Arbitrator stated that under the parties' contract, management was required to act "in accordance with law, rule, regulation and the (contract) in any area affecting employees," and that employees have a right "to grieve if they are adversely affected by management action which allegedly did not conform to the requirements of law, rule, regulation or contract." Id. She noted that it was undisputed that employees were adversely affected by the reorganization. As her award, she found that the issue was grievable and arbitrable. She made no ruling on the merits of the dispute.
The Agency contends that the award is contrary to section 7106(a) of the Statute because it would subject to arbitral review the exercise of the substantive management right to determine organization and because the award erroneously states that the Agency "surrendered" some of its rights when it signed the agreement. The Agency maintains that the issue in this case differs from the issue presented in cases involving contracting out and OMB Circular A-76. In this regard, the Agency argues that section 7106(a)(2) of the Statute requires the right to contract out to be exercised in accordance with applicable laws, while section 7106(a)(1) "specifically does not place such a restriction on management's right to determine its organization, which is at issue here." Agency's Exceptions at 10. The Agency also contends that the award is contrary to section 7103(a)(9) of the Statute because the Union's grievance does not fall within the definition of grievance contained in that section. The Union submitted an opposition to the exceptions, contending that the exceptions provide no basis for vacating the award.
IV. Analysis and Conclusions
We find that the Agency's exceptions fail to establish that the award is contrary to the Statute.
With regard to the right to determine agency organization under the Statute, the Authority has consistently recognized that section 7106(a)(1) expressly reserves to management officials the right to determine the organization of the agency. See, for example, Congressional Research Employees Association and The Library of Congress, 3 FLRA 737 (1980) (Section 1 of the proposal). Management's right to determine the organization of the agency includes the right to determine its administrative or functional structure. See American Federation of Government Employees, AFL - CIO, Local 3805 and Federal Home Loan Bank Board, Boston District Office, 5 FLRA 693 (1981) (a bargaining proposal requiring an agency to maintain duty stations for employees in effect prohibited the agency from eliminating duty stations and therefore interfered with the right to determine agency organization). However, a proposal which would have required an agency to comply with the provisions of an Army regulation in determining the "mix" of civilian and military employees assigned to positions was held not to violate the agency's right to determine its organization. See American Federation of Government Employees, AFL - CIO, Local 1858 and Army Missile and Munitions Center and School, Redstone Arsenal, Alabama, 15 FLRA 273 (1984), in which the Authority applied its ruling in American Federation of Government Employees, AFL - CIO, National Council of EEOC Locals and Equal Employment Opportunity Commission, 10 FLRA 3 (1982), enforced sub nom. EEOC v. FLRA, 744 F.2d 842 (D.C. Cir. 1984), cert. dismissed, 106 S. Ct. 1678 (1986), to find that the proposal on civilian and military "mix" sought only to contractually recognize higher level limitations on local management's rights and therefore was within the duty to bargain.
In the present case, the Union's grievance does not concern the substantive decision of management to reorganize the regions but only seeks to compel compliance with applicable law, rule or regulation under the express terms of the parties' agreement. In finding the grievance to be arbitrable, the Arbitrator did not address the merits of the grievance but merely ruled that the question of compliance with whatever obligations may be imposed on the Agency by OMB Circular A-105 is a proper matter under the parties' agreement for arbitral review. 1 Because the Arbitrator's award concerns only the arbitrability of the Union's grievance, we are not presented with any question related to the merits of the grievance. This award, finding the matter grievable and arbitrable, does not interfere with the exercise of management's rights under section 7106(a)(1) of the Statute.
The Agency contends that a distinction exists between section 7106(a)(1) and section 7106(a)(2), and argues that its right under section 7106(a)(1) to determine its organization is not restricted by the requirement that its exercise of that right be made "in accordance with applicable laws." This argument provides no basis for overturning the award. The Authority has specifically recognized that the exercise of the rights enumerated in section 7106(a)(2), such as contracting out, must be in accordance with applicable laws. In Congressional Research Employees Association and the Library of Congress, 23 FLRA No. 15 (1986), the Authority discussed the development of case law relating to the arbitration of the exercise of management's rights under section 7106(a) and concluded that a grievance which would have directly challenged a management decision to contract out certain functions was not arbitrable even though it was based on a provision in the collective bargaining agreement. The Authority distinguished between grievances over the failure of management to exercise its right to contract out under section 7106(a)(2) in accordance with applicable laws and a grievance which would interfere with the right to make the original determination to contract out at all. Further, based on its decision in National Federation of Federal Employees, Local 1167 and Department of the Air Force, Headquarters, 31st Combat Support Group (TAC), Homestead Air Force Base, Florida, 6 FLRA 574 (1981) (Proposal 1), enforced sub nom. National Federation of Federal Employees v. FLRA, 681 F.2d 886 (D.C. Cir. 1982), the Authority held that although law or regulation may place limits on management discretion, the Statute precludes the negotiation of contractual limitations on management rights. Library of Congress, 23 FLRA No. 15 (1986).
In the present case, the agreement provision which the Arbitrator applied does not place any contractual limitation on management's discretion to determine its organization. The requirement that the reorganization of the regions must comply with applicable law, rule or regulation, including OMB Circular A-105, which the Arbitrator found to be imposed by the agreement, does not affect management's substantive right to determine its organization. The Agency has failed to demonstrate in what way that or any other requirement that management rights be exercised in accordance with law, rule or regulation interferes with the exercise of those rights. Consequently, we reject the Agency's contention that a requirement that decisions be made in accordance with applicable law, rule or regulation applies only to actions taken under section 7106(a)(2) and does not apply to actions taken under section 7106(a)(1).
The Agency also contends that the Union's grievance is not a grievance under section 7103(a)(9) of the Statute or the agreement because the complaint does not concern a violation of the agreement or of a law, rule or regulation affecting conditions of employment. Section 7103(a)(9) of the Statute defines "grievance" as any complaint "by any employee concerning any matter relating to the employment of the employee . . . or a claim of breach of a collective bargaining agreement or any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment." Moreover, unless specifically excluded, grievances are covered by negotiated grievance procedures. In Bureau of Indian Affairs and National Federation of Federal Employees, Local 243, 25 FLRA No. 74 (1987), we found that the agency failed to show that a grievance concerning a claimed violation, misinterpretation or misapplication of law was specifically excluded from the parties' negotiated grievance procedure and we upheld an arbitrator's determination that the grievance was properly grievable and arbitrable under the parties' negotiated agreement. In American Federation of Government Employees, Local 1904, AFL - CIO and United States Army Communications and Electronics Materiel Readiness Command, 16 FLRA 358 (1984), the Authority applied the court's decision in EEOC to a grievance over an activity's decision to contract out certain support functions. The Authority emphasized the court's finding that under the expansive definition of grievance in section 7103(a)(9) of the Statute and with no exclusion of section 7121(c) of the Statute applicable to contracting out, a complaint that an agency failed to comply with OMB Circular A-76 or with any other law or rule governing contracting out is a matter within the coverage of the grievance procedure prescribed by the Statute. Materiel Readiness Command at 359-60. The Authority concluded on that basis that the agency did not establish that the award finding the grievance to be arbitrable was contrary to section 7106(a) of the Statute and denied the agency's exceptions.
Similarly, in the present case, the Union's grievance sought to enforce the provision of the collective bargaining agreement which required that certain actions, including reorganization, be done in accordance with laws, rules, regulations, and the provisions of the agreement. The definition of grievance in the parties' agreement is similar to the definition of grievance in section 7103(a)(9) of the Statute. As the Authority noted in Materiel Readiness Command, the court in EEOC (744 F.2d at 850) considered the definition in section 7103(a)(9) to be "expansive." Further, as with the subject of contracting out, there is no exclusion under section 7121(c) of the right to determine organization or any other of the matters relating to those listed in section 7106(a)(1).
The Arbitrator in this case interpreted and applied the parties' agreement to require that the rights enumerated in section 7106(a)(1), including the right to determine Agency organization, must be exercised in accordance with OMB Circular A-105. As we have already found, the agreement requirement does not interfere with the exercise of management's rights under section 7106(a)(1). We conclude that the definition of "grievance" in section 7103(a)(9) of the Statute includes the grievance filed by the Union in this case.
Finally, with regard to the Agency's argument concerning the Arbitrator's ruling on the legal status of OMB Circular A-105, we find nothing erroneous in her ruling that the circular is binding on the Agency under the terms of the collective bargaining agreement. That part of the exceptions constitutes nothing more than disagreement with the Arbitrator's interpretation and application of the parties' agreement and provides no basis for finding an award deficient under the Statute. See U.S. Army Corps of Engineers, Kansas City District and National Federation of Federal Employees, Local 29, 22 FLRA No. 15 (1986).
In sum, we deny the Agency's exceptions to the award because no basis has been presented for finding the award deficient under the Statute. We emphasize that this award found only that the matter involved was grievable and arbitrable under the parties' agreement. It did not address the merits of the dispute. Arbitrators' awards which resolve the merits of disputes involving the exercise of management's rights are also subject to the requirements of the Statute and the scope of an arbitrator's remedial authority in such cases may be limited. See, for example, Headquarters, 97th Combat Support Group (SAC), Blytheville Air Force Base, Arkansas and American Federation of Government Employees, AFL - CIO, Local 2840, 22 FLRA No. 72 (1986) (discussing the scope of an arbitrator's remedial authority in resolving grievances disputing determinations by agencies to contract out agency work).
For the above reasons, the Agency's exceptions are denied.
Issued, Washington, D.C., May 6, 1987.
Jerry L Calhoun, Chairman
Henry B. Frazier III, Member
Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY
Footnote 1 OMB Circular A-105, "Standard Federal Regions," states in Section 3 that "(t)his Circular applies to all domestic Federal departments and agencies, and to any new Federal departments and agencies that may be created, except as exempted." Attachment 2 to the Circular, entitled "Coverage," exempts certain specified departments and agencies. There is no indication in the Circular or elsewhere in this case that the Agency is exempted from coverage of the Circular.