36:0743(77)AR - - NLRB, Office of the General Counsel and NLRBU - - 1990 FLRAdec AR - - v36 p743

[ v36 p743 ]
The decision of the Authority follows:

36 FLRA No. 77











August 22, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on an exception to the award of Arbitrator David Goodman. The issue before the Arbitrator was whether the Agency's denial of the grievants' requests for permission to engage in outside employment was arbitrary and unreasonable. The Arbitrator concluded that the Agency violated the collective bargaining agreement when it denied the grievants' requests, and ordered the Agency to provide each grievant with $600 to compensate for the breach of the agreement.

The Agency filed an exception 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 exception.

For the following reasons, we conclude that the award is contrary to law. Accordingly, we will strike the portion of the award requiring the Agency to provide each grievant with $600.

II. Background and Arbitrator's Award

The grievants are attorneys employed by the Agency in Denver, Colorado. In early 1988, the grievants submitted separate requests to the Agency for permission to engage in outside employment as hearing officers for the Denver Civil Service Commission (DCSC). The Agency denied their requests based upon concerns of conflicts of interest. Because the Agency denied their requests, the grievants were not able to accept appointments as hearing officers. A grievance was filed over the denial of the requests and, when it was not resolved, the grievance was submitted to arbitration.

The parties stipulated the following issue before the Arbitrator:

Was the Agency's denial of Grievants' requests for permission to engage in outside employment arbitrary and unreasonable? If so, what is the appropriate remedy.

Award at 4.

The Arbitrator concluded that "[t]he Agency violated Article 4, Section 6 of the Agreement by acting in an arbitrary and unreasonable manner in refusing Grievants' outside employment requests to serve as hearing officers for DCSC." Id. at 32-33. The Arbitrator also concluded that:

[t]he loss in compensation was caused by and was the direct result of an Agency action in contravention of its commitment reflected in Article 4, Section 6 of the negotiated Agreement. Having breached that Agreement, and having knowledge and notice of the compensation which Grievants could have received had their requests been honored, Grievants are entitled to an appropriate make whole remedy.

Id. at 32.

The Arbitrator stated that the Union's suggestion that "each Grievant would have been assigned three [DCSC] cases is a fair and reasonable approach[,]" and that "[a]ssuming further that each case would have been heard in one day or less, the contracted rate of $35 per hour would have produced at least $600 in income for each Grievant." Id. Therefore, the Arbitrator ordered as a remedy that each grievant receive "$600 in compensation for breach of the Agreement." Id. at 33.

III. Agency's Exception

The Agency argues that the award is deficient because it is contrary to the Back Pay Act, 5 U.S.C. § 5596. The Agency asserts that the compensation awarded is not directly related to the contractual violation and that it, therefore, does not meet the "but for test." Exception at 2 (emphasis in original). According to the Agency, the Arbitrator's award constitutes an award of nominal damages and, as such, is deficient.

IV. Union's Opposition

The Union asserts that the Arbitrator was authorized to issue his award. Opposition at 2. The Union argues that because there was sufficient evidence on the record to estimate the income which the grievants would have earned if the Agency had not violated the parties' agreement, it is "just and proper that the Agency should be required to make whole those individuals that have been subject to its arbitrary and unreasonable acts." Id.

V. Analysis and Conclusion

It is clear that, as asserted by the Union, arbitrators have broad remedial authority. See, for example, American Federation of Government Employees, Local 12 and United States Department of Labor, 32 FLRA 771, 774 (1988). Nevertheless, awards of compensation under the Statute must comply with the requirements of the Back Pay Act or be authorized by some other clear expression of a waiver of sovereign immunity. The Union asserts that, under the Back Pay Act, "an arbitrator may issue an award granting outside earnings, as well as 'inside' earnings." Opposition at 2. The Union provides no support, and research fails to disclose any support, for its assertion, however.

For an award of backpay to be authorized under the Back Pay Act, the arbitrator must determine that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; (2) the personnel action directly resulted in the wi