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38:0626(58)NG - - AFGE Local 1770 and Army, HQ XVIII Airborne Corps and Ft. Bragg, Ft. Bragg, NC - - 1990 FLRAdec NG - - v38 p626

[ v38 p626 ]
The decision of the Authority follows:

38 FLRA No. 58




LOCAL 1770










November 30, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). The Union is appealing the Agency head's disapproval, under section 7114(c) of the Statute, of a provision concerning performance awards that was included in the local agreement pursuant to a decision of the Federal Service Impasses Panel (the Panel or FSIP).

Because we find that the provision is inconsistent with 5 C.F.R. § 430.503(c), we conclude that the provision is nonnegotiable under section 7117(a)(1) of the Statute.

II. Procedural Issues

The Union claims that the "Agency's allegation should be denied because it doesn't meet the requirements set out" in section 2424.6 of the Authority's Rules and Regulations. In particular, the Union claims that: (1) the Agency's Statement of Position was untimely filed because the Union's appeal was mailed on October 2, 1989 and the Agency "should have" received it no later than October 6, 1989; (2) the Agency did not provide an explanation of the meaning attributed to the provision; (3) the Agency did not cite the law or regulation it relied on; and (4) the Agency did not provide a detailed statement supporting its rationale. The Union also contends that the Agency acted in bad faith by "distorting" the terms of the provision to avoid accepting the Panel's decision. Union's Response to Agency's Statement of Position (Union's Response) at 1.

Under section 2424.6(a) of the Authority's Rules and Regulations, an agency's statement of position must be filed with the Authority within 30 days of the date of "receipt" by the agency head of a union petition for review. The Agency states that it received the Union's petition for review on October 12, 1989. Agency's Statement at 1. The Agency's statement of position was filed with the Authority on November 7, 1989. Because the Agency's statement of position was timely filed based on the date on which it claims to have received the petition for review, we conclude, in the absence of any evidence submitted by the Union that the petition for review was not received by the Agency on that date, that the Agency's statement of position was timely filed.

We reject the Union's claim as to the other alleged procedural deficiencies. The Agency's statement of position explained the Agency's interpretation of the effect of the provision, specifically stated the legal and regulatory grounds on which the provision was claimed to be nonnegotiable, and provided detailed reasoning in support of the Agency's claims that the provision was nonnegotiable.

III. Provision

Performance awards will be granted to employees who are rated "Exceptional" or "Highly Successful" for the appraisal year for which award determinations are being made. Amounts will be distributed fairly and equitably within budgetary constraints.

IV. Positions of the Parties

1. Agency

The Agency claims, citing Department of the Air Force, Langley Air Force Base v. FLRA, 878 F.2d 1430 (4th Cir. 1989) (unpublished decision) (Langley Air Force Base), that the provision directly interferes with management's right, under section 7106(a)(1) of the Statute, to determine its budget. The Agency argues that, as with the proposal in the Langley Air Force Base case, by requiring the Agency to grant performance awards to employees who achieve a specified rating, the provision "forces the [A]gency to first consider the budgetary impact of the award monies mandated by the performance rating before the actual official rating is given to the employee." Agency's Statement at 2.

The Agency argues that the phrase "within budgetary constraints" in the second sentence of the provision does not change the effect of the first sentence. The Agency argues that, under the provision, if "no award money is available," it would be precluded from giving employees the rating that they deserve or, conversely, if the Agency gave the rating that the employee deserves, it would be unable to comply with the contractual requirement to pay the award. Id. at 3. The Agency concludes that "[p]reventing the [A]gency from assigning the proper level of performance rating because of budgetary constraints directly interferes with the [A]gency's ability to act." Id.

The Agency disputes the Panel's conclusion that the provision would boost morale and result in increased productivity. The Agency argues that because the budget does not always contain adequate funding for performance awards, when employees realize that the lower level of funding will result in lower ratings, "employee morale will . . . suffer" and "productivity will plummet[.]" Id.

The Agency also notes that, under the Federal Personnel Manual (FPM), employees who receive "exceptional or highly successful" ratings receive RIF credit for retention purposes and credit for promotion purposes. The Agency concludes that "[t]o deny the [A]gency's high performers these benefits only because of a limited awards budget would undoubtedly impact employee morale and productivity." Id. at 4.

The Agency also claims that the provision is nonnegotiable under section 7117(a)(1) of the Statute because it is inconsistent with law and regulation, specifically, 5 U.S.C. § 4302a(c)(1)(B), FPM Chapter 430, Subchapter 2-4, and 5 C.F.R. § 430.204. The Agency argues that the provision is inconsistent with 5 U.S.C. § 4302a(c)(1)(B) because, in addition to the factors governing performance appraisals that are cited in the law, the provision would require appraisals to be based on budgetary considerations, namely, "the amount of award money that is available[.]" Id.

The Agency contends that the provision is inconsistent with FPM Chapter 430, Subchapter 2-4, which establishes the basic considerations to be followed in appraising employee performance, because it requires management to consider the Agency's budget in appraising the level of employee performance. Id. at 5. The Agency also contends that the provision is inconsistent with 5 C.F.R. § 430.206, which requires that an employee's summary rating be "based solely on the outcome of the employee's ratings against the critical and non-critical elements[,]" because the provision "places the employee's actual performance in the critical and non-critical elements second to the [A]gency's ability to pay the required cash awards[.]" Id. The Agency concludes that because employee appraisals would be based "on the [A]gency's budget rather than the level of [employee] performance," the provision is inconsistent with law and regulation. Id. at 6.

2. Union

The Union states that the provision is intended to have the meaning stated in the Panel's decision; that is, that the provision would "provide mandatory performance awards, within budgetary constraints[.]" Petition for Review at 2. Enclosure 2 to the Petition for Review (the Panel decision) at 4.

The Union contends that under the provision awards can be given to employees only insofar as those awards are consistent with budgetary constraints and that if there were no money in the awards budget, there would be no awards. The Union argues that, interpreted in this manner, the provision does not interfere with the Agency's right, under section 7106(a)(1), to determine its budget. Union's Response at 1.

The Union notes that the Agency is required by regulation to establish a performance award program and to submit annually a budget for that program. The Union also asserts that the wording of the provision is distinguishable from the proposal at issue in Langley Air Force Base. Id.

The Union claims that the provision "has no bearing whatsoever on how the employee is to be rated." Id. at 2. The Union argues that the provision "simply does not require the [Agency] to do anything other than after the employee is rated, treat [the employee] fairly [by] giving them incentive to achieve[.]" Id. The Union concludes that the Agency's position is based on a misrepresentation or distortion of the effect of the Panel-imposed provision.

V. Analysis and Conclusion

We conclude that the provision is nonnegotiable under section 7117(a)(1) of the Statute because it is inconsistent with 5 C.F.R. § 430.503(c).

Based on the wording of the provision and the Union's statement as to the meaning of the provision, we find that the provision would mandate performance awards for employees with specified summary appraisal ratings, consistent with budgetary constraints. Proposals which mandate performance awards for employees who achieve a specific summary appraisal rating are inconsistent with 5 C.F.R. § 430.503(c), which requires that an agency official who is at a higher level than the recommending official review and approve each award. See Tidewater Virginia Federal Employees Metal Trades Council and U.S. Department of the Navy, Norfolk Naval Shipyard, Portsmouth, Virginia, 37 FLRA 938, 949-51 (1990) (Norfolk Naval Shipyard).(2) The authority under 5 C.F.R. § 430.503(c) to approve performance awards includes the authority to disapprove those awards and mandatory performance awards are inconsistent with that express regulatory authority. Norfolk Naval Shipyard at 950.

Because the provision in this case mandates performance awards for employees who achieve a specified summary appraisal rating, we find, consistent with Norfolk Naval Shipyard, that the provision is inconsistent with 5 C.F.R. § 430.503(c). Consequently, we conclude that the provision is nonnegotiable under section 7117(a)(1) of the Statute. Compare National Association of Government Employees, AFL-CIO, Local R1-144, Federal Union of Scientists and Engineers and U.S. Department of the Navy, Naval Underwater Systems Center, 38 FLRA No. 46, slip op. at 33-38 (1990) (proposals that did not mandate performance awards held to be negotiable).

Because we have concluded that the provision is nonnegotiable on the ground that it is inconsistent with 5 C.F.R. § 430.503(c), we do not need to address the other grounds asserted for the nonnegotiability of the provision.

VI. Order

The Union's petition for review is dismissed.

(If blank, the decision does not have footnotes.)

1. As requested by the Agency, this case has been recaptioned "[t]o clarify the actual location of the dispute and the [U]nion's representation at Fort Bragg[.]" Agency's Statement of Position at 1 (Agency's Statement).

2. The Authority's decision in Norfolk Naval Shipyard was issued subsequent to the Panel's decision in Department of the Army, Headquarters, XVIII Airborne Corps and Fort Bragg, Fort Bragg, North Carolina and Local 1770, American Federation of Government Employees, AFL-CIO, 89 FSIP 78 (1989). See Enclosure 2 attached to Petition for Review.