36:0375(46)AR - - Treasury, IRS, Louisville District and NTEU - - 1990 FLRAdec AR - - v36 p375



[ v36 p375 ]
36:0375(46)AR
The decision of the Authority follows:


36 FLRA No 46

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

U.S. DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

LOUISVILLE DISTRICT

(Agency)

and

NATIONAL TREASURY EMPLOYEES UNION

(Union)

0-AR-1661

DECISION

July 20, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on exceptions to the award of Arbitrator Alvin L. Goldman 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. The Union filed an opposition to the Agency's exceptions.

The grievance concerned the Agency's failure to select the grievant for one of several Internal Revenue Agent positions throughout the Louisville District of the Internal Revenue Service (IRS). The Arbitrator found that the Agency failed to comply with an applicable procedure when it made the selections to fill the vacant positions. The Arbitrator found that the grievant was prejudiced by the Agency's failure to follow the procedure and awarded the grievant priority consideration for a future Revenue Agent vacancy.

We conclude that the Agency has failed to establish that the award is deficient on any of the grounds set forth in section 7122 of the Statute. Accordingly, we will deny the exceptions.

II. Background

The grievant applied for the position of Revenue Agent in the Louisville District of the IRS pursuant to a vacancy announcement dated April 1, 1986. Award at 2. The grievant was placed on the "best qualified" list but was not among the IRS employees selected for the available positions. Several vacancies remained after the selections were made from among the IRS employees on the best qualified list. The selecting official reviewed the applications from outside candidates--that is, employees not employed by the IRS before April 1, 1986--and filled the remaining vacancies from among those candidates. Id.

The Union filed a grievance challenging the Agency's failure to select the grievant for a Revenue Agent vacancy. The grievance was not resolved and was submitted to arbitration. A hearing before the Arbitrator was held on May 24, 1988. The parties stipulated that the grievance was properly before the Arbitrator and was authorized under the parties' "NORD II" agreement. Id. at 1. At the hearing, both parties presented evidence on the merits of the grievance "but agreed to recess pending a determination by the Arbitrator as to whether Policy Statement P-0-4 is applicable to this case." Id. (1)

On July 3, 1988, the Arbitrator issued a "Determination of the Controlling Standard for Resolving the Merits" (Determination) (Exhibit 4 to Agency's Exceptions).(2) In his Determination, the Arbitrator described Policy Statement P-0-4 as a provision issued by the Agency "to control the conduct of selecting officials so that the decisions of those sub-delegated the authority to fill vacancies follow an agency-wide policy of providing IRS employees with the maximum opportunity for development and advancement within the agency." Determination at 4. The Arbitrator determined that

before the [Agency] selecting official selects an outside candidate [for a vacancy] he or she must, consistent with P-0-4 and in compliance with NORD II, compare the qualifications of that applicant with those of any remaining eligible IRS employees and give preference to the IRS employees if they are as well qualified as the outside candidate.

Determination at 11.

The Agency filed exceptions to the Arbitrator's "Determination of the Controlling Standard for Resolving the Merits." The Authority dismissed the Agency's exceptions as interlocutory, without prejudice to the Agency's right to refile exceptions with the Authority after a final award was rendered by the Arbitrator. Internal Revenue Service, Louisville District and National Treasury Employees Union, 32 FLRA 1231 (1988).

"[T]he Determination of the Controlling Standard for Resolving the Merits left some material facts in dispute." Award at 1. Therefore, the Arbitrator held a second hearing to resolve the remaining questions. The Agency excepts to the Arbitrator's final award issued after the second hearing.

III. Arbitrator's Award

The Arbitrator stated that the issue before him was "whether the procedure and decision of the Agency in filling Revenue Agent vacancies for which the [g]rievant had applied violated the [g]rievant's rights and, if so, what should be the remedy." Award at 2.(3)

As a preliminary matter, the Arbitrator restated his conclusions in the Determination that the negotiated selection procedures, construed in light of the policy set forth in section 1.A. of Article 13 of the NORD II agreement, obligated the selecting official to: (1) refrain from filling a vacancy with an outside candidate unless the outside candidate is more qualified than the inside candidates; and (2) compare the qualifications of outside candidates with those of inside candidates before selecting a candidate from outside of the Agency.

The Arbitrator noted that since the time of his Determination, the Union had asserted, in agreement with the Agency, that the NORD II agreement does not require the selecting official to give preference to Agency employees when the candidates are equally qualified. Award at 5-7. The Arbitrator stated that:

Because an arbitrator's responsibility is to carry out the parties' agreement, I must respect the mutually agreed position of the parties regarding the impact of NORD II on this case. Therefore, although it is contrary to my own interpretation of the parties' collective bargaining agreement, I conclude that this case must be resolved on the basis of the parties' mutual assumption that NORD II does not obligate the selecting official to give preference to an IRS employee who is at least equally qualified as an outside candidate.

Award at 7.

However, the Arbitrator agreed with the Union that Policy Statement P-0-4 obligates a selecting official, when filling a position, to give preference to IRS employees who are as well qualified for the position as candidates from outside the Agency. Award at 7. The Arbitrator stated that Article 1, sections 1 and 2 of the parties' NORD II agreement "recognize the applicability of provisions such as Policy Statement P-0-4 unless in 'specific conflict' with the terms of NORD II. Thus, absent a specific conflict between the two provisions, P-0-4 is a term and condition of the process for filling vacancies and must be taken into account in construing the agreement." Determination at 4. The Arbitrator found that the regulation was "not inconsistent with or in conflict with the procedural requirement of NORD II respecting the order in which applicant files will be considered." Award at 7-8.

The Arbitrator also found that the Agency's legal obligation to follow the policies published in the Internal Revenue Manual required the selecting official to abide by the preference provided IRS employees over equally qualified outside candidates when he made the selections for Revenue Agent. Id. at 8. The Arbitrator found that the only meaningful way in which the preference can be implemented is to compare the file of an outside candidate targeted for selection with the file of a favorably evaluated IRS employee who was not selected from the best qualified list. Id. at 9.

The Arbitrator noted the selecting official's testimony that: (1) he assessed each applicant's qualifications for the Revenue Agent position using the same criteria, (2) in assessing the outside candidates he did not compare them with the inside candidates who had not been selected from the best qualified list, and (3) if he could not find a sufficient number of outside candidates to fill the remaining vacancies, he could have returned to the list of qualified Agency employees and reconsidered them. Award at 2-3.

The Arbitrator stated that "[c]learly, based on the selecting official's testimony, in this case the outside candidate was picked from a pool of outside candidates alone. The competition was solely among that group and the necessary comparison with IRS employees was not made." Award at 8. The Arbitrator found that the selecting official failed to follow the procedure established in the Agency's regulation for filling positions. The Arbitrator also found that the selecting official's failure to compare the qualifications of the IRS employees with the qualifications of the outside candidates prejudiced the grievant because "the likelihood is very high that [the selecting official] would have concluded that the [g]rievant was at least as qualified (and probably more qualified) than the outside candidate." Award at 14-15.

In considering the appropriate remedy, the Arbitrator stated that "an arbitrator should not substitute his judgment for that of a selecting official in making the actual promotion decision." Award at 15. The Arbitrator found that Article 13, section 14 of the parties' agreement provided the guidance for shaping the remedy for an employee who is prejudiced because a selecting official followed the incorrect procedure in filling a position and where it is not certain that the employee would have been selected even if the correct procedure had been followed. In accordance with Article 13, section 14, the Arbitrator ordered, as a remedy, that the grievant be given priority consideration for the next Revenue Agent opening for which the grievant applies. Award at 16.

IV. First Exception

A. Positions of the Parties

The Agency contends that the Arbitrator does not have jurisdiction over Policy Statement P-0-4. The Agency asserts that the Arbitrator has jurisdiction only over the NORD II agreement and cannot impose on either the Agency or the Union any limitation or obligation not specifically provided for under the terms of the NORD II agreement. The Agency argues that the policy statement on which the Arbitrator relies is an exercise of management's discretion and is not the source of any substantive rights which are enforceable in arbitration. According to the Agency, the Arbitrator exceeded his authority by creating a substantive right from the Agency's policy statement "where neither the [S]tatute nor the parties' agreement permitted him to do so." Agency's Memorandum in Support of Exceptions (Agency's Memorandum) at 10.

The Union asserts that the terms of the policy statement are clear and are enforceable in arbitration.

B. Analysis and Conclusions

An arbitrator's award will be found deficient as in excess of the arbitrator's authority when the arbitrator resolves an issue not submitted to arbitration. Air Force Space Division, Los Angeles Air Force Station, California and American Federation of Government Employees, AFL-CIO, Local 2429, 24 FLRA 516 (1986).

At the first hearing before the Arbitrator on May 24, 1988, "[t]he parties stipulated that the grievance is properly before the Arbitrator." Determination at 1. After presenting evidence on the merits, the Agency and the Union "agreed to recess pending a determination by the Arbitrator as to whether Policy Statement P-0-4 is applicable" to the grievance. Award at 1. See also Determination at 1. Thus, it is clear from the record before us that the parties granted the Arbitrator authority to interpret Policy Statement P-0-4 and to determine what, if any, rights the parties have under that provision. Moreover, unless there is a specific exclusion in the agreement, a grievance concerning a violation of an agency regulation governing the selection process is a grievance within the meaning of section 7103(a)(9) of the Statute, and is arbitrable under negotiated grievance procedures. See Illinois Air National Guard, 182nd Tactical Air Support Group and The Association of Civilian Technicians, Illinois Chapter 34, 34 FLRA 591, 594 (1990), citing Local R-1-185, National Association of Government Employees and The Adjutant General of the State of Connecticut, 25 FLRA 509 (1987). Consequently, we find that the Arbitrator did not exceed his authority by determining the parties' respective rights under Policy Statement P-0-4 and enforcing the Policy Statement in a manner consistent with the requirements of the parties' agreement. Accordingly, the Agency's first exception is denied.

V. Second Exception

A. Positions of the Parties

The Agency asserts that the Arbitrator ignored the clear and unequivocal wording of the NORD II agreement and relied on provisions of the Agency's policy statement which conflict with the NORD II agreement. The Agency states that the NORD II agreement specifically provides that "[t]o the extent that Policy Statement P-0-4 conflicts with the NORD II Agreement, then the NORD II provision will govern." Agency's Memorandum at 13 (emphasis in original). The Agency argues that "the substantive preference of Policy Statement P-0-4 conflicts with the procedural preference of first consideration under the NORD II Agreement." Id. at 14.

The Agency states that the "fact that the parties with their extensive negotiating experience were cognizant of Policy Statement P-0-4, yet failed to mention any procedure for comparing the wholly different 'data bases', strongly suggests that the parties limited their agreement on promotions to the express terms of Article 13[,]" which "permits the Agency to 'fill' positions after first consideration has been provided to bargaining unit employees." Id. at 15.

The Union states that the policy statement "gives effect to Article 13 of the parties' agreement, which incorporates the idea that the overall purpose of Article 13 is to ensure that advancement opportunities are available to employees." Union's Response to Exceptions Filed By Agency (Union's Response) at 16. The Union maintains that there is no conflict between the provisions of the policy statement and the parties' collective bargaining agreement. The Union asserts that the Agency merely disagrees with the Arbitrator's interpretation of the policy statement and the parties' agreement and is attempting to argue before the Authority the same matters which were unsuccessfully argued before the Arbitrator.

B. Analysis and Conclusions

The Agency contends that the Arbitrator failed to apply the appropriate rules of construction in interpreting the parties' NORD II agreement. The Agency disagrees with the Arbitrator's conclusion that there is no conflict between Policy Statement P-0-4 and the parties' NORD II agreement and that the policy statement was applicable under the parties' agreement. The Agency also contends that the Arbitrator incorrectly found that the Agency's internal regulation--Policy Statement P-0-4--provided a substantive preference for bargaining unit employees. We construe the Agency's arguments as a contention that the award fails to draw its essence from the parties' collective bargaining agreement.

In order to establish that an award is deficient on the basis that it does not draw its essence from the agreement, the party making the allegation must demonstrate that the award: (1) cannot in any rational way be derived from the agreement; or (2) is so unfounded in reason and fact, and so unconnected with the wording and purpose of the agreement, as to manifest an infidelity to the obligation of the arbitrator; or (3) evidences a manifest disregard for the agreement; or (4) does not represent a plausible interpretation of the agreement. U.S. Department of Veterans Affairs, Medical Center, Leavenworth, Kansas and American Federation of Government Employees, Local 85, 34 FLRA 166 (1990).

The Arbitrator interpreted the parties' agreement as requiring the Agency to follow the procedures in the policy statement of comparing bargaining unit employees and individuals outside the unit to determine their qualifications for vacant positions. The Agency's exception does not establish that the Arbitrator's award fails to draw its essence from the parties' agreement. In our view, the contentions merely constitute disagreement with the Arbitrator's interpretation and application of the parties' agreement. Those contentions provide no basis for finding the award deficient under section 7122(a) of the Statute. For example, U.S. Department of the Air Force, Air Force Logistics Command, Hill Air Force Base, Utah and American Federation of Government Employees, Local 1592, 34 FLRA 331 (1990). Accordingly, the Agency's second exception is denied.

VI. Third Exception

A. Positions of the Parties

The Agency contends that the Arbitrator's construction of the parties' agreement limits the Agency's ability to select from outside candidates when filling a position and, therefore, impermissibly restricts management's right to select under section 7106(a)(2)(C) of the Statute. Agency's Memorandum at 15-19.

The Agency asserts that the Arbitrator's decision establishes a substantive preference for bargaining unit employees and, therefore, has the same effect as the proposal found to be nonnegotiable in Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms v. FLRA, 857 F.2d 819 (D.C. Cir. 1988). The Agency argues that the Arbitrator's award, like the proposal in Bureau of Alcohol, Tobacco and Firearms, is "a direct and substantive impediment" to the Agency's exercise of its right under section 7106(a)(2)(C) to select from any appropriate source. Agency's Memorandum at 24. The Agency contends that the effect of the Arbitrator's award is to limit the Agency's rights under section 7106(a) to exercise discretion in its review of qualifications. The Agency asserts that the Arbitrator impermissibly substituted his judgment concerning the qualifications of the candidates for the Revenue Agent positions for that of the Agency's selecting official.

The Union contends that the Arbitrator's award is not contrary to law, rule or regulation. The Union states that the Agency "voluntarily incorporated [Policy Statement P-0-4] into the Internal Revenue Manual and the parties negotiated to be bound by all those Manual provisions which do not conflict specifically with other collectively bargained terms." Union's Response at 14.

The Union also contends that the Arbitrator's enforcement of Policy Statement P-0-4 does not interfere with the Agency's rights under section 7106 of the Statute. The Union argues that by promulgating the policy statement and incorporating it into the parties' agreement, the Agency created an enforceable procedure. The Union asserts that the policy statement does not interfere with the Agency's right to select under section 7106(a)(2)(C) because

[it] does not unconditionally mandate the selection of any certain person by the Agency. It does say that . . . the qualifications of employee-applicants must be compared to those of all outside-applicants who are being considered. And it says that if it appears the employee's qualifications are at least equal to those of the outsider, then the employee must be given preference.

Id. at 15-16 (emphasis in original).

The Union states that the Agency voluntarily defined how it would exercise its rights under section 7106(a)(2)(C) by issuing Policy Statement P-0-4. The Union contends that by issuing the policy statement, the Agency established that it would exercise its rights "by examining and comparing the qualifications of outsiders to insiders before making its selection." Union's Response at 16. The Union states that the Arbitrator "merely found that the Agency violated a rule it had itself established and which the parties had incorporated into their agreement. Nothing in the [award] violates 5 U.S.C. § 7106(a)(2)(C) or any other section of the [S]tatute." Id. at 18.

B. Analysis and Conclusions

The Agency has failed to show that the arbitration award limits the Agency's ability to select from among outside candidates when filling vacant positions or that the Arbitrator substituted his judgment for that of the Agency's selecting official. Therefore, the award does not directly interfere with management's rights under section 7106(a)(2)(C) of the Statute.

1. The Award Does Not Prevent the Agency from Making Selections from Any Appropriate Source

The Arbitrator held that the Agency's selecting official was obligated to simultaneously consider bargaining unit employees and individuals outside the unit to determine their relative qualifications for the vacant positions within the Agency. That requirement is contained in the Agency's policy statement, which the Arbitrator found was incorporated into the parties' negotiated agreement. The Agency contends that the Arbitrator's award is contrary to section 7106(a)(2)(C) of the Statute because it places a substantive limitation on the Agency's ability to select from among outside candidates when filling a position.

Management has the right to make selections for appointments from among properly ranked and certified candidates for promotion under section 7106(a)(2)(C)(i) or from any appropriate source under section 7106(a)(2)(C)(ii). However, management's rights under section 7106(a) of the Statute are subject to procedures negotiated under section 7106(b). Negotiable procedures are enforceable through grievance arbitration. See, for example, Internal Revenue Service, Cincinnati District Office and The National Treasury Employees Union, Chapter 9, 24 FLRA 288 (1986). Negotiated procedures to be used by an agency when selecting from among employees previously determined by management to be equally qualified to perform the work required by an assignment have been held by the Authority to be negotiable and enforceable under the Statute. See National Treasury Employees Union, Chapter 137 and United States Customs Service, Region IV, 34 FLRA 650 (1990).

As we stated above, the Arbitrator found that the procedure established in Policy Statement P-0-4 and incorporated in the parties' agreement only requires the Agency to simultaneously consider bargaining unit employees and nonbargaining unit employees to determine their relative qualifications for the vacant positions within the Agency. The Arbitrator found that the selecting official failed to follow this procedure when he made the selections to fill the Revenue Agent positions. See Award at 7-8. The Arbitrator held that by failing to follow this procedure, the selecting official made selections in a manner that was inconsistent with Policy Statement P-0-4 and, thereby, violated the parties' collective bargaining agreement.

By enforcing this procedure of comparing the qualifications of unit employees and outside candidates, the award does not directly interfere with the Agency's rights under section 7106(a)(2)(C) of the Statute. The award does not inhibit the Agency's ability to solicit or consider applications from outside the Agency. The award does not limit the universe of candidates that section 7106(a)(2)(C) guarantees management the right to consider. The Agency retains the discretion to determine the qualifications for a position and to determine which candidate is best qualified. Compare American Federation of Government Employees, Local 3296 and National Guard Bureau, Alaska National Guard, 33 FLRA 99 (1988) (provision which would preclude management from developing additional lists of qualified candidates, expanding the area of consideration, or considering other appropriate sources goes to the substance of management's right to make selections for appointments and is nonnegotiable) and Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms v. FLRA, 857 F.2d 819 (D.C. Cir. 1988) (proposal that would require the agency to rank and consider current employees before soliciting and considering outside candidates placed substantive limitation on management's right to select because it narrowed the universe of candidates that section 7106(a)(2)(C) is intended to guarantee management the right to consider).

We note that the Arbitrator did not enforce Policy Statement P-0-4 to require Agency officials to give selection preference to unit employees when they are as well-qualified as the candidates available from outside the Agency. Rather, the Arbitrator enforced the procedure in the parties' agreement requiring simultaneous comparison of the qualifications of unit employees and outside candidates. Our decision does not address whether an arbitration award enforcing the preference in Policy Statement P-0-4 would be consistent with the Agency's rights under section 7016(a)(2)(C) of the Statute.

The Agency has failed to show that the arbitration award prevents the Agency from selecting the most qualified candidates from any appropriate source to fill vacant positions. Therefore, the award is not deficient on that basis.

2. The Arbitrator Did Not Substitute His Judgment for that of the Agency's Selecting Official

The Arbitrator reviewed the qualifications of the grievant and other candidates and determined that had the selecting official compared the file of the grievant with the files of the outside candidates "the likelihood is very high, that [the selecting official] would have concluded that the [g]rievant was at least as qualified (and probably more qualified) than the outside candidate." Award at 15.

The Arbitrator specifically stated that:

Although an arbitrator can readily assess the likely impact of the procedural error of not comparing the most promising IRS employee with the external candidate before selecting the latter for a vacancy, contrary to the Union's principal remedial request, I hold that in a case of this sort an arbitrator should not substitute his judgment for that of a selecting official in making the actual promotion decision. To rule otherwise would permit the arbitral process, as an extension of collective bargaining, to interfere with Management's right, preserved by 5 USC §7106(a)(2), to fill vacant positions.

Award at 15.

The Arbitrator did not reject the selecting official's determinations concerning the qualifications of the candidates hired to fill the positions. Rather, the Arbitrator determined that the grievant was prejudiced by procedural flaws in the selection process. The Arbitrator then reconstructed the selection action to determine how the grievant was affected by the Agency's failure to follow the proper procedure. See American Federation of Government Employees, Local 1960 and Department of the Navy, Development Center, 26 FLRA 250, 252 (1987) (when a grievance before an arbitrator concerns whether an improper agency action has played a part in the failure of a specific employee to be selected for promotion it is necessary for the arbitrator to reconstruct what the responsible selecting official would have done if the unwarranted agency action had not occurred). See also Newark Air Force Station and American Federation of Government Employees, Local 2221, 30 FLRA 616 (1987).

Although the Arbitrator found that the grievant was prejudiced by the selecting official's failure to compare the inside candidates with the outside candidates, he did not determine that, as compared to the other candidates, the grievant was the most qualified candidate. The Arbitrator refused to promote the grievant or change any of the selections made by the Agency because he was not certain whether the grievant would have been selected for a position in the absence of the Agency's improper conduct. See, for example, American Federation of Government Employees, Local 1923, AFL-CIO and Health Care Financing Administration, Department of Health and Human Services, 33 FLRA 88 (1988) (arbitrator's award ordering that the grievant be promoted was not deficient where the arbitrator reconstructed the selection action and determined that the grievant would have been promoted if the agency had not failed to provide the grievant priority consideration in accordance with the parties' agreement).

Because the Arbitrator did not independently determine the necessary qualifications for the Revenue Agent position or dispute the selecting official's conclusions concerning the qualifications of the candidates for the position, there is no basis for us to conclude that the Arbitrator impermissibly substituted his judgment for that of the Agency.

The Agency has not shown that the arbitration award is deficient because it limits the Agency's substantive right to make selections from any appropriate source or because the Arbitrator substituted his judgment for that of the Agency concerning the qualifications of the candidates for the vacant positions. Therefore, we conclude that the award is not deficient on the basis that it directly interferes with the Agency's rights under section 7106(a)(2)(C) of the Statute. Accordingly, the Agency's exception is denied. Compare Department of Agriculture, Food and Nutrition Service and National Treasury Employees Union, 35 FLRA 1154 (1990) (interest arbitration award imposing contract provision requiring selection, from among equally qualified applicants, of applicant with most seniority held to directly interfere with management's right to select under section 7106(a)(2)(C)).

VII. Fourth Exception

A. Positions of the Parties

The Agency contends that the Arbitrator's award is inconsistent with Government-wide regulations which prohibit grievances over the nonselection of an employee to fill a position. The Agency argues that Federal Personnel Manual (FPM) chapter 335, subchapters 1-4 and 1-6 "make it clear that a properly-ranked individual cannot grieve non-selection." Id. at 20.

The Union contends that the Arbitrator's award is not contrary to law, rule or regulation and is consistent with the Agency's policy statement and the parties' agreement.

B. Analysis and Conclusions

The Arbitrator's award is not deficient on the basis that it is inconsistent with FPM chapter 335, subchapters 1-4 and 1-6.

In National Treasury Employees Union and Department of the Treasury and U.S. Customs Service, 31 FLRA 181 (1988) (U.S. Customs Service), enforced as to other matters sub nom. Department of the Treasury, United States Customs Service v. FLRA, 873 F.2d 1473 (D.C. Cir. 1989), the Authority considered a similar argument with respect to FPM chapter 335, subchapter 1-6, and concluded that "OPM regulations cannot limit the statutorily prescribed scope of the negotiated grievance procedure." Id. at 199, citing American Federation of Government Employees, AFL-CIO, Local 2782 and Department of Commerce, Bureau of the Census, Washington, D.C., 6 FLRA 314, 322 (1981) ("OPM regulations . . . may not be applied in a manner inconsistent with the scope of negotiated grievance procedures allowed under section 7121 of the Statute."). See also Office of Personnel Management v. FLRA, 864 F.2d 165 (D.C. Cir. 1988). The Authority stated that "the Statute and its relevant legislative history required that grievance procedures negotiated under section 7121 cover all matters that under the provisions of law could be submitted to the grievance procedure unless the parties exclude them through bargaining." U.S. Customs Service, 31 FLRA at 200.

The list of matters excluded from the coverage of the negotiated grievance procedures by section 7121(c) of the Statute does not include the nonselection of an employee to fill a position. Therefore, FPM chapter 335, subchapters 1-4 and 1-6 do not bar grievances over the nonselection of an employee to fill a position. See id. See also Equal Employment Opportunity Commission v. FLRA, 744 F.2d 842, 851 (D.C. Cir. 1984), cert. dismissed, 476 U.S. 19 (1986); Health Care Financing Administration, Department of Health and Human Services, 33 FLRA at 94 (consistent with management's right under section 7106(a)(2)(C) and FPM chapter 335, subchapter 1-4 to make selections for appointments, an arbitrator may review an agency's selection action and properly order an employee to be selected for a promotion when the arbitrator finds that the employee was affected by an improper agency action that directly resulted in the failure of the employee to be promoted). We conclude that the Agency's argument that the Arbitrator's award is contrary to the provisions of the FPM does not provide a basis for finding the award deficient. Accordingly, the Agency's exception is denied.

VIII. Decision

The Agency's exceptions are denied.(4)

APPENDIX

The Arbitrator cited the following provisions of the parties' NORD II agreement as relevant to the parties' dispute:

Article 2, Section 2. To the extent that provisions of the Internal Revenue Manual are in specific conflict with this Agreement, the provisions of this Agreement will govern.

Article 13. [Governs promotions and describes the procedures for filling vacancies.]

Section 1.

A. The purpose of this article is to ensure that all competitive promotions to bargaining unit positions and certain other placement actions as set forth in section 2.B. below are made on a merit basis by means of systematic and equitable procedures so that employees are given the opportunity to develop and advance to their full potential.

B. The purpose of this article is also to provide that Internal Revenue Service employees receive first consideration for all actions set forth in section 2.B. below.

Section 2.

B. The terms of this article will apply to all other placement actions within the bargaining unit. The following are examples of such actions:

1. filling a position by promotion;

2. filling by reassignment to or demotion to a position with a higher graded full performance level than the candidate's last position;

3. filling a position by transfer or reinstatement;

4. filling a position by temporary promotion for more than sixty (60) days;

5. permanent or temporary conversion, for more than sixty (60) days, from one work schedule to another (e.g., a seasonal or career/career-condit