[ v37 p216 ]
The decision of the Authority follows:
37 FLRA No. 14
FEDERAL LABOR RELATIONS AUTHORITY
OVERSEAS EDUCATION ASSOCIATION
U.S. DEPARTMENT OF DEFENSE
September 14, 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 Robert J. Ables. The Arbitrator denied the grievance concerning the Agency's denial of a living quarters allowance (LQA) to the grievant.
The Union filed exceptions to the award 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 Agency filed an opposition to the Union's exceptions.
For the following reasons, we remand the award to the parties for the purpose of requesting that the Arbitrator clarify his award to address fully whether the grievant was entitled to LQA in this case.
II. Background and Arbitrator's Award
In August 1985, the grievant accompanied her spouse and their son to Schweinfurt, West Germany, where her spouse had been assigned as a teacher. The family received LQA pursuant to Department of Defense Directive 1400.25-M, Chapter 592, "Overseas Allowances and Differentials" (DoD Directive).
On May 7, 1986, the grievant's spouse asked for early return of his wife (the grievant) and son to the United States to enable the grievant to initiate divorce proceedings. In the summer of 1986, the grievant received a divorce decree which was to be activated in West Germany if the grievant and her spouse decided to carry out their plans for a divorce. On July 24, 1986, pursuant to a request of the grievant's spouse, "his LQA was reduced to allowance 'without family.'" Award at 4.
In September 1986, the grievant returned to Fulda, West Germany. She returned "because prospects were good she could get a job at Fulda" and because "the grievant thought it would be good for her son to be near his father." Id. The grievant moved in with her sister, who was a teacher at Fulda and was still living with her sister at the time of the hearing. After working as a substitute teacher, the grievant received a permanent teaching assignment at Fulda on December 4, 1986. The grievant's divorce from her husband became final on February 12, 1987.
On August 19, 1987, the grievant filed an application for LQA. The application was approved on September 1, 1987. On October 2, 1987, the Agency concluded that it had authorized LQA erroneously and terminated the allowance. The Agency noted that as the grievant had no sponsor and was a local hire, she was not eligible for LQA. As the result of her LQA termination, the grievant filed the grievance which is the subject of the Arbitrator's award in this case.
The Arbitrator found that the issue before him was whether the Agency violated the parties' collective bargaining agreement "when it denied the grievant . . . certain living quarters allowances while serving as a teacher at one of the [Agency's] schools in Fulda, Federal Republic of Germany." Award at 1. The Arbitrator further found that the parties "effectively" agreed that the grievant's entitlement to LQA depended on whether she satisfied provisions in the Department of State Standardized Regulations, chapter 100, section 130, subsection 031 (the DSSR), as supplemented by the DoD Directive. Award at 7.(*)
The Arbitrator noted that for the grievant to be eligible for LQA under the DSSR, she must satisfy conditions in subparagraph a. and b. or c. of subsection 031.12. The Arbitrator found that the grievant satisfied the provisions in subparagraph a. "in that the quarters allowance in issue clearly is attributable to her employment by the United States Government." Id. at 9. The Arbitrator also found, however, that the grievant did not satisfy subparagraph b. because "prior to her appointment as a teacher in Fulda, West Germany, either as a substitute in October 1986 or in a permanent position in December 1986, she had not been recruited in the United States, or any of the other designated places[.]" Id. The Arbitrator determined that subparagraph c. did not apply because the Agency did not require the grievant to move to another area.
Although the Arbitrator found that the grievant was not entitled to LQA under the DSSR, he noted that the DoD Directive provides for waivers of the DSSR requirements. According to the Arbitrator, Section 2-2 of the DoD Directive provides in subsection b.(2) that the requirements of subsection 031.12 b. of the DSSR "'may be waived in individual cases when unusual circumstances exist'" and, in subparagraph (3) of that subsection, that "Civilian Personnel Officers 'will waive' those DSSR requirements for locally hired U.S. citizen employees when 'but for the conditions surrounding the employment, the employee would be residing in the United States[.]'" Id. at 10. The Arbitrator found that as a divorce was one of the events that must have occurred for a waiver to apply, the grievant "might have qualified under the 'but for' condition." Id. at 11.
The Arbitrator found that "'[u]nusual circumstances' . . . is the net standard by which to judge the disputed allowances." Id. at 11. The Arbitrator also found that waiver by an Agency official requires "a blocking condition to a grant of entitlement of the kind in issue and, then, exercise of discretion whether an exception should be granted to such blocking condition." Id. at 12. According to the Arbitrator, "[a]bsent arbitrary or capricious or clearly unreasonable action in exercising that discretion, there is no basis under a collective bargaining agreement to substitute judgment as to what facts justify finding an exception resulting in a grant of benefits[.]" Id.
The Arbitrator concluded that although reasonable officials might have decided differently than the Civilian Personnel Officer in this case, "it cannot be found that the [Agency] exercised discretion in an arbitrary, capricious or clearly unreasonable way in deciding not to grant that waiver." Id. at 13. The Arbitrator noted, in this regard, that as the grievant's "representations to her employer and apparent personal preferences were that she wanted to be on her own[,] . . . it cannot fairly be found that she was effectively left stranded, as would have been the case of a U.S. citizen hired locally following the death of a spouse, for example." Id. at 12. Accordingly, the Arbitrator denied the grievance on the grounds that the grievant had not shown that she satisfied the requirements of the DSSR, or that she was entitled to a waiver of those requirements under the DoD Directive.
III. Positions of the Parties
A. The Union's Exceptions
The Union claims that the Arbitrator's award is contrary to law and regulation.
The Union does not dispute the Arbitrator's conclusion that the grievant was not entitled to LQA under the DSSR. In addition, the Union does not dispute the Arbitrator's finding that in order to overturn the Agency's decision not to grant the grievant a waiver under Section 2-2(2) of the DoD Directive, it would have to be established that the Agency's decision was arbitrary, capricious or clearly unreasonable. Although the Union contends that the Agency did not properly exercise its discretion in denying the grievant a waiver on that basis, the Union states that "it is not necessary to overturn the arbitrator's judgment on that point." Exceptions at 5.
The Union claims, however, that the Arbitrator "applied the wrong legal standard for the non-discretionary waiver at issue in the case at hand." Id. According to the Union, Section 2-2(3) of the DoD Directive compels a waiver of the DSSR requirements in this case. The Union concludes that because the Arbitrator found that, at the time of the filing of the grievance, the grievant was divorced, he should have concluded that a waiver of the DSSR was required.
B. The Agency's Opposition
The Agency argues that the determination as to whether the grievant was entitled to LQA was proper under the DSSR and the DoD Directive. Further, the Agency contends that because the DoD Directive is only an Agency-wide regulation, the Union's exception that the Arbitrator's award is deficient under the DoD Directive does not provide a basis for setting aside the award.
IV. Analysis and Conclusion
Section 2-2 b. of the DoD Directive provides for two different waivers of the DSSR requirements as they relate to LQA. Subsection b.(2) provides that the DSSR requirements "may be waived" when "unusual circumstances exist." Subsection b.(3), on the other hand, provides that certain officials "will waive" the DSSR requirements in certain circumstances. As an initial matter, therefore, it is clear, and undisputed in the record before us, that a waiver of the DSSR requirements under subsection b.(3) is mandatory. It is also clear that unusual circumstances expressly are required for waiver under subsection b.(2) only. Subsection b.(3) does not reference that requirement.
The Arbitrator noted the difference between the two waivers. The Arbitrator stated that, under section 2-2 b.(2), the DSSR requirements "'may be waived'" and that, under Section 202 b.(3), "Civilian Personnel Officers 'will waive'" the DSSR requirements in certain circumstances. Award at 10. We are unable to determine from the award, however, whether the Arbitrator applied the mandatory waiver provision of the DoD Directive in this case.
After quoting the waiver provisions of the DoD Directive, the Arbitrator stated that "'unusual circumstances'" was the "net standard by which to judge the disputed allowances." Award at 11. As noted above, unusual circumstances are expressly required only for waivers under subsection b.(2) of the DoD Directive. Further, the Arbitrator's quotation of that requirement supports a conclusion that the Arbitrator was, in fact, referring to waivers under subsection b.(2).
In addition, the remainder of the Arbitrator's analysis of waivers under the DoD Directive indicates that the Arbitrator was considering only waivers under subsection b.(2). For example, the Arbitrator stated that a "[w]aiver . . . contemplates . . . the . . . exercise of discretion[.]" Award at 12. The Arbitrator stated further that he could not find "that the [Agency] exercised discretion in an arbitrary, capricious, or clearly unreasonable way in deciding not to grant that waiver." Id. at 13. The Arbitrator does not specify the waiver to which he referred. Finally, the Arbitrator denied the grievance based on his finding, as relevant here, that the grievant had not shown "that she was entitled to a waiver of [the DSSR] requirements because of unusual circumstances in her individual case[.]" Id.
The Arbitrator's sole findings relating to waiver of the DSSR requirements focus on the Agency's exercise of discretion and the existence of unusual circumstances. Waivers under subsection b.(3) of the DoD Directive are mandatory, however, and do not expressly require unusual circumstances. We are, therefore, unable to determine whether the Arbitrator considered whether the grievant was entitled to a waiver under subsection b.(3) in this case.
Because of the award's ambiguity, we will remand the award to the parties for the purpose of seeking a clarification from the Arbitrator as to whether the grievant is entitled to a waiver of the DSSR requirements under subsection b.(3) of the DoD Directive.
Finally, we reject the Agency's claim that the Union's exception should be dismissed because the DoD Directive is "an [A]gency-wide, as opposed to a [G]overnment-wide, regulation and does not have the full force of law." Opposition at 2. Section 7122(a)(1) of the Statute provides that the Authority may find that an award is deficient "because it is contrary to any law, rule, or regulation[.]" The term "rule or regulation" in section 7122(a)(1) includes agency rules and regulations that are mandatory and prescriptive in their application, and that govern the disposition of the matter resolved by an arbitration award. Department of the Army, Fort Campbell District, Third Region, Fort Campbell, Kentucky and American Federation of Government Employees, Local 2022, 37 FLRA No. 12 (1990), slip op. at 10.
For the foregoing reasons, the award is remanded to the parties for the purpose of requesting that the Arbitrator clarify his award to address whether the grievant is entitled to a waiver of the DSSR requirements under subsection b.(3) of the DoD Directive in dispute here.
DEPARTMENT OF STATE STANDARDIZED REGULATIONS
(Government Civilians, Foreign Areas)
031 United States Citizen Employees
031.1 Quarters Allowances
031.12 Employees Recruited Outside the United States
Quarters allowances prescribed in Chapter 100 may be granted to employees recruited outside the United States, provided that:
a. the employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and
b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the former Canal Zone, or a possession of the United States, by:
(1) the United States Government, including its Armed Forces;
(2) a United States firm, organization, or interest;
(3) an international organization in which the United States Government participates; or
(4) a foreign government
and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the former Canal Zone, or a possession of the United States; or
c. as a condition of employment by a Government agency, the employee was required by that agency to move to another area, in cases specifically authorized by the head of agency. Subsection 031.12b may be waived by the head of agency upon determination that unusual circumstances in an individual case justify such action.
An employee who was determined to be eligible to be granted a living quarters allowance under former Section 031.12d. last effective March 25, 1971 and last published in TL:SR-174 dated August 11, 1968, may continue to be eligible for and be granted a living quarters allowance while continuously employed in a foreign area and while he/she is otherwise eligible for such allowance.
DEPARTMENT OF DEFENSE CPM 1400.25-M
Chapter 592, Subchapter 2
b. Employees recruited outside the United States (section 031.12, DSSR) will have their eligibility for quarters allowance determined at the time of hire and at any time pertinent changes in their individual status occur that may confer eligibility. The sample form at Appendix A will be used to document decisions made regarding eligibility for allowances. The DSSR, section 031.12, lists conditions under which an employee may be granted housing allowances. The employee must be a U.S. citizen employed full time. Intermittent and part-time employees are not eligible.
(1) Under the provisions of section 031.12b, DSSR, former military and civilian members will be considered to have "substantially continuous employment" from the date of separation until the date on which their entitlement to government-paid transportation back to the United States expires.
(2) The requirements of section 031.12b of the DSSR may be waived in individual cases when unusual circumstances exist. If the Major Command recommends a waiver, the case will be forwarded to serviced DoD Component headquarters for head-of-agency consideration. All other requests should be returned by letter to the employee explaining the reasons for nonrecommendation. When approval is granted to waive section 031.12b, DSSR, the effective date of the LQA approval will be the letter approval date or the date quarters are occupied, whichever is later.
(3) Officials identified in paragraph 1-2.a of this chapter (that is, appointing officers) will waive DSSR section 031.12b requirements for locally hired U.S. citizen employees when, but for the condition surrounding the employment, the employee would be residing in the United States, Puerto Rico, any U.S. possession, or the former Canal Zone. One of the following events must have occurred for this waiver.
(a) Death of the sponsoring spouse.
(b) Divorce or legal separation; legal separation is a separation under a judgment or decree of a court of competent jurisdiction rendered pursuant to the statutes and laws under which the court exercised its authority.
(c) Sponsoring spouse left the post or area permanently.
(d) Either spouse's work location became so separated that daily commuting to a common home would not be reasonable.
In addition, the employee must have entered the area as the spouse of a sponsor who was eligible for the quarters allowance or who would have been eligible if employed by the government. The employee's reasons for being in the area continuously from the time of arrival must have been fairly attributable to the sponsor's or the employee's own circumstances that meet the conditions specified in section 031.11 or 031.12b, DSSR. In circumstances described in subparagraphs 2-2.b.(3)(b)(c) or (d), above, the LQA will be stopped should the couple remarry, reconciliation occur, or the spouse return to his/her post or area.
(If blank, the decision does not have footnotes.)
*/ These regulations are set forth in the Appendix to this decision.