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The decision of the Authority follows:
39 FLRA No. 1
FEDERAL LABOR RELATIONS AUTHORITY
FEDERAL EMPLOYEES METAL TRADES COUNCIL
U.S. DEPARTMENT OF THE NAVY
PORTSMOUTH NAVAL SHIPYARD
PORTSMOUTH, NEW HAMPSHIRE
January 24, 1991
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 Lawrence T. Holden, Jr. filed on behalf of the Activity by the Department of the Navy (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 Arbitrator ruled that three grievants were entitled to an award of backpay for overtime which they were promised but were not assigned to work, while on voluntary temporary reassignments from their positions at the Activity to the Mare Island Naval Shipyard, Vallejo, California. The Agency contends in its exceptions that the award is contrary to law, particularly the Back Pay Act, 5 U.S.C. º 5596. For the following reasons, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
In the spring of 1988, the Naval Sea Systems Command (NAVSEA) canvassed naval shipyards for loans of journeymen electricians to be assigned to the Mare Island Naval Shipyard for a period of 90 days. The Portsmouth Naval Shipyard requested volunteers for the loans from among its employees in Shop 95 but received no volunteers because "wages at Mare Island were significantly less than at Portsmouth." Award at 2. The foreman of Shop 95 then posted a notice stating: "People working the 90 day detail in Mare Island will be guaranteed 8 [hours overtime] per week." Id. Four employees volunteered for the detail and went to Mare Island where they were assigned to work on the overhaul of the USS Parche.
The detailed employees were given 8-hour overtime assignments, as promised, for the first 2 weeks that they were at Mare Island. After that, NAVSEA placed a freeze on overtime because of budget constraints, and the employees received no more overtime assignments. The USS Parche overhaul was excluded from the freeze on overtime. Three of the four detailed employees filed grievances protesting the Agency's failure to assign them the overtime which they had been promised. Two of the three grievants requested that they be allowed to return early to Portsmouth and they did return approximately 3 weeks later. The third grievant stayed at Mare Island for a longer period. The grievants requested pay for 8 hours of overtime for each week at Mare Island in which they were not assigned overtime. The grievances were submitted to arbitration.
The Arbitrator framed the issue as whether the grievants were "entitled to a monetary remedy in connection with the loss of overtime" during the temporary duty assignment at Mare Island. Id. at 1. The Arbitrator determined that the grievances were arbitrable under Article 33, Section 1a(1) of the parties' collective bargaining agreement, which defines a grievance as a complaint "by any employee concerning any matter relating to the employment of the employee." Id. at 5. He noted that the Agency had raised no challenge to the arbitrability of the grievance.
The Arbitrator rejected the Agency's contention that it was not bound by the promise of overtime made by the foreman and found that the grievants "were justified in relying on the foreman's apparent authority to make the guaranty that he did." Id. at 6. The Arbitrator stated that the grievants "travelled across the country from Portsmouth, New Hampshire to Mare Island, California" and "[t]here can be no question that they were promised 8 hours of overtime per week, that they were induced to accept the temporary duty at Mare Island on the basis of the promise, that they acted in reliance upon the promise, and that they have now suffered a detriment by the [Agency's] failure to keep the promise." Id. The Arbitrator determined that the grievants were entitled to monetary compensation for their "detrimental reliance" on the foreman's promise, "particularly where such reliance goes to a fundamental element of the employment relationship, namely, employee compensation." Id. at 7.
In response to the Agency's arguments that backpay was not available in this case, the Arbitrator found that the "but for" test of the Back Pay Act was "clearly met" and ruled that "but for the [Agency's] wrongful withholding of the guaranty, the electricians in question would have received such guaranty." Id. The Arbitrator also noted that the NAVSEA freeze on overtime would not change the outcome in this case because the freeze did not affect the overhaul of the USS Parche, to which the grievants were assigned. The Arbitrator stated that the Agency "violated a mandatory element of the employment relationship" to assign the grievants 8 hours of overtime per week and that the "guaranty contained no element of discretion; it was mandatory." Id. at 8. He reiterated that "employees have the right to grieve and arbitrate under the collective bargaining agreement matters concerning the employment relationship, and the non-payment of a special compensatory provision must be considered an element, a fundamental element, of the employment relationship." Id.
In making his award, the Arbitrator stated that he was limiting the award to the three employees who filed grievances and, further, the grievant who remained behind for a longer period was only entitled to a remedy for the same period as the two employees who returned to Portsmouth. On that basis, he ordered the Agency to pay the three grievants backpay for 8 hours per week from the time overtime ceased to be paid until the two grievants returned home 3 weeks later.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the Arbitrator's award of backpay in this case is contrary to the Back Pay Act and the overtime provisions of 5 U.S.C. ºº 5542(a) and 5544(a). The Agency acknowledges that the freeze on overtime did not include the USS Parche and admits that the grievants were misled by the foreman's promise of overtime assignments. See Exceptions at 2. However, the Agency contends that payment for overtime not actually worked would be contrary to rulings of the Comptroller General.
The Agency states that there may be an exception to the law prohibiting pay for overtime not actually worked if an agency "bargains away its right to exercise its discretion on a matter that is normally discretionary[.]" Id. at 3. However, the Agency denies that that exception applies in this case. The Agency maintains that there has been no bargaining or agreement on the matter of overtime for the grievants and "[n]o employee was deprived of overtime work in violation of a provision in the negotiated agreement, and thus, no employee may be awarded backpay under the provisions of the Back Pay Act[.]" Id. (citations omitted). The Agency asserts further that "the supervisor's promise could not rise to the level of a mandatory provision of a negotiated agreement." Id. The Agency maintains that the supervisor acted beyond his authority when he promised overtime to the grievants and asserts that "[t]o allow this decision to stand would suggest that the [A]gency would be bound by the ultra vires acts of lower level supervisory personnel[.]" Id.
B. Union's Opposition
The Union denies that the foreman was acting outside his authority when he promised overtime to employees who accepted the detail to Mare Island. The Union states that "testimony of the production officer and the shop head showed that the 8 hours of overtime was discussed" and further points out that notes of that discussion were offered in evidence. Opposition at 1.
The Union maintains that the parties' collective bargaining agreement was considered in the arbitration proceeding and states that the Union "pointed out to the [A]rbitrator that the Agency did violate the terms of the negotiated agreement (NA) when it refused to pay the grievants and directed him to the provisions of Article 1 and Article 4, Section 3." Addendum to Opposition at 1. The Union contends that to mislead the grievants "is a violation of Article 1 and is also a violation of Article 4, Section 3 which requires that all provisions of the NA be applied fairly." Id.
The Union contends that the Comptroller General decisions relied on by the Agency were issued before the Statute became effective and that they are not controlling in this case. The Union also maintains that it is not necessary for an arbitrator to rely on a specific agreement provision in making an award. The Union states that the Arbitrator made it clear in his award "that the non-payment of a special compensation provision must be considered a fundamental element of the employment relationship." Id. at 2.
IV. Analysis and Conclusions
For an award of backpay to be authorized under the Back Pay Act, the arbitrator must determine that the aggrieved employee was affected by an unjustified or unwarranted personnel action, that the personnel action directly resulted in the withdrawal or reduction of the grievant's pay, allowances or differentials, and that but for such action, the grievant otherwise would not have suffered the withdrawal or reduction. See Veterans Administration Medical Center, Palo Alto, California and American Federation of Government Employees, Local 2110, 36 FLRA 98, 107-09 (1990) (VAMC, Palo Alto).
The Back Pay Act defines "personnel action" as including "the omission or failure to take an action or confer a benefit." 5 U.S.C. º 5596(b)(3). The regulations implementing the Back Pay Act state:
"Unjustified or unwarranted personnel action" means an act of commission or an act of omission (i.e., failure to take an action or confer a benefit) that an appropriate authority subsequently determines, on the basis of substantive or procedural defects, to have been unjustified or unwarranted under applicable law, Executive order, rule, regulation, or mandatory personnel policy established by an agency or through a collective bargaining agreement.
5 C.F.R. º 550.803. The failure of an agency to pay employees monies to which they are entitled constitutes an unwarranted personnel action within the meaning of the Back Pay Act. VAMC, Palo Alto, 36 FLRA at 108. Id.
The Agency claims that backpay could not be awarded in this case because there has been no violation of a provision in a collective bargaining agreement. The Arbitrator found, however, that the Agency violated its promise to the grievants to assign 8 hours of overtime per week if they accepted a detail to a lower-paid temporary assignment. He ruled that the Agency's promise constituted "a mandatory element of the employment relationship." Award at 8. The Agency admits that the grievants were misled by the promise of overtime assignments and so induced to accept the 90-day temporary duty assignment. Further, the Agency does not dispute that the NAVSEA freeze on overtime did not apply to the USS Parche to which the grievants were assigned.
In our opinion, the Arbitrator's finding that the Agency failed to comply with "a mandatory element of the employment relationship" constitutes a finding that the Agency had established a "mandatory personnel policy" within the meaning of 5 C.F.R. º 550.803. Award at 8. We do not agree with the Agency's contention that the foreman was acting outside his authority when he posted the promise to pay overtime on the bulletin boards of Shop 95. The Agency has not demonstrated that the Arbitrator erred in concluding that the foreman was authorized to promise overtime as a means of encouraging employees to volunteer for a temporary assignment at a lower rate of pay. Based on the record before him, the Arbitrator found that the promise of overtime assignments posted by the foreman was discussed with Agency management officials. We note the Arbitrator's statement that "[t]he evidence indicates that there then may have been discussion between Portsmouth and Mare Island concerning [the lack of volunteers after the first solicitation]." Award at 5. Also, as the Union points out, the notice was posted on the bulletin boards of Shop 95 and there was testimony confirming that the matter was discussed by management officials. See Opposition at 1.
Therefore, we conclude that the Agency has failed to establish that the foreman was not authorized to promise overtime as an inducement to accepting assignments to Mare Island Naval Shipyard. Rather, the record supports the Arbitrator's finding that the promise of overtime was made as a considered and deliberate attempt to induce employees to volunteer after a first call for volunteers had produced none. Compare U.S. Small Business Administration, Washington, D.C. and American Federation of Government Employees, Council 228, Local 2532, 38 FLRA 386, 407-08 (1990) (record did not support supervisor's authority to execute settlement agreement). The Agency's contention that it did not authorize the foreman to promise overtime merely constitutes disagreement with the Arbitrator's evaluation of the evidence and his findings and conclusion in that regard and provides no basis for finding the award deficient. See U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, Local 1336, 37 FLRA 766, 774 (1990).
Further, the Arbitrator specifically ruled that "but for the [Agency's] wrongful withholding of the guaranty, the electricians in question would have received such guaranty." Id. at 7. Consequently, the Arbitrator made a proper finding under the Back Pay Act that the Agency had committed an unjustified and unwarranted personnel action when it failed to pay overtime in accordance with the promise made by the foreman and that "but for" that action the grievants would have been assigned the overtime they were promised. The Agency's exceptions fail to establish that the award is deficient because it is contrary to the Act. See U.S. Department of the Treasury, Customs Service, Dallas, Texas and National Treasury Employees Union, 37 FLRA 1022, 1031 (1991) (agency reprisal against grievants for whistleblowing activities constituted unjustified or unwarranted personnel action under the Back Pay Act). See generally Brown v. Secretary of the Army, No. 89-5371 (D.C. Cir. Nov. 9, 1990) (discussing the requirements of the Back Pay Act).
We also reject the Agency's contention that the award is contrary to 5 U.S.C. ºº 5542(a) and 5544(a) by ordering backpay for overtime not worked. The Authority previously has found awards of overtime compensation to be warranted in cases where employees did not actually perform overtime work. See, for example, U.S. Army Aberdeen Proving Ground, Installation Support Activity and National Federation of Federal Employees, Local 2058, 28 FLRA 566 (1987); Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 13 FLRA 386 (1983); and Bureau of Alcohol, Tobacco, and Firearms and National Treasury Employees Union, 12 FLRA 49 (1983). In each of those cases, the fact that employees did not actually work overtime did not render a remedy of overtime compensation unlawful. Rather, the employees would have worked overtime had the agency not engaged in improper conduct and, therefore, they suffered the loss of pay because of that conduct. Where it is established that employees are entitled to overtime under collective bargaining agreements and do not receive that overtime because of a violation of the agreement by the agency, those employees can be found to be entitled to compensation for the lost overtime. See VAMC, Palo Alto, 36 FLRA at 108-09. See also, Wells v. Federal Aviation Administration, 755 F.2d 804, 808 (11th Cir. 1985) ("[The Back Pay Act] regulations clearly provide for the inclusion of overtime pay as pay under the Back Pay Act in appropriate cases.").
In this case, the Arbitrator found that employees were entitled to overtime compensation based on his finding that, but for the Agency's failure to comply with its established mandatory personnel policy to assign 8 hours of overtime, the grievants would have worked and been paid for the overtime. See American Federation of Government Employees, Local 1698 and Department of the Navy, Aviation Supply Office, 34 FLRA 939, 943-45 (1990) (arbitrator's finding of a causal connection between an improper agency action and the nonselection of the grievant constituted a finding that "but for" the improper action, the grievant would have been selected). As we have indicated above, the Arbitrator's finding satisfies the requirements of the Back Pay Act. Therefore, there is no basis on which to find the award to be contrary to 5 U.S.C. ºº 5542(a) and 5544(a).
Accordingly, we conclude that the Arbitrator's award satisfies the requirements of the Back Pay Act and has not been shown to be otherwise deficient.
The Agency's exceptions are denied.
(If blank, the decision does not have footnotes.)
*/ The Union also filed an addendum to its opposition. The Agency contends that the addendum should not be considered because it was not filed in accordance with the Authority's Rules and Regulations. However, the addendum was filed by the Union within the time limit for filing the opposition and we will consider it.