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The decision of the Authority follows:
39 FLRA No. 3
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF DEFENSE
OVERSEAS EDUCATION ASSOCIATION
January 25, 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 Jacob Seidenberg 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 Arbitrator ruled that the Agency erred by not following the procedures of 5 U.S.C. º 5514 (the Debt Collection Act) when it withheld money from the grievant's salary as recoupment for living quarters allowance (LQA) which the Agency alleged she had been paid in error. The Arbitrator ordered that the grievant be made whole for the money withheld and that the grievant be paid interest of 10 percent on the backpay. The Arbitrator retained jurisdiction for the purpose of entertaining a motion for attorney fees.
In its exceptions, the Agency contends that the Arbitrator exceeded his authority by issuing an award on a matter which had already been decided in a prior arbitration proceeding. The Agency also contends that the Arbitrator's award is contrary to the Back Pay Act, 5 U.S.C. º 5596, and implementing regulations of the Act because the award orders an amount of backpay in excess of that allowed under the Act. Further, the Agency contends that the Arbitrator ordered the payment of an incorrect rate of interest and that he improperly retained jurisdiction for the purpose of entertaining a motion for attorney fees.
We agree that the Arbitrator's award of interest in the amount of 10 percent must be modified to bring it into compliance with the Back Pay Act and we will modify the award accordingly. We find that the remaining exceptions fail to establish a basis for finding the award deficient and we will deny those exceptions.
II. Background and Arbitrator's Award
The grievant came to Germany in 1981 to join her husband, an Army officer. During that year she became an employee of the Agency. The grievant's husband received LQA as a sponsor of the grievant until May 1984 when he was separated from the Army and returned to the United States. The grievant applied for and was granted LQA in her own right. The grievant's husband returned to Germany in November 1984 as an unemployed civilian. In 1987, he gained employment with a private company in a city approximately 170 miles from the grievant's place of employment.
During the period from November 1984 until 1988, a dispute arose between the Agency and the grievant over her entitlement to LQA during that time. On January 12, 1989, the Agency's finance office notified the grievant by letter that she had received an overpayment of LQA in the amount of $6,694.72 and that that amount must be paid in full or it would be recouped from her salary at the rate of $200 per pay period beginning with the pay period ending on February 11, 1989. In her response to that letter, the grievant stated "that she intended to invoke her rights under the Debt Collection Act, stating among other things, that under [the] Act she was entitled to a debt collection hearing that would allow her to contest the existence of the debt, and that no deduction could be made prior to a decision from the Debt Collection Hearing Officer, and further that under the Act, the maximum deduction could not exceed 15% of disposable income." Award at 7 (citation omitted). The Agency finance officer replied that under the Debt Collection Act, "LQA is not subject to hearing procedures." Id. The deduction of $200 per pay period began with the pay period ending February 11, 1989.
The Arbitrator noted that "[d]uring this time frame, the [g]rievant was moving to secure a waiver of the requested payment of LQA." Id. at 8. The grievant filed a grievance protesting the Agency's termination of her LQA. That grievance (Case No. G-89-(E)-42) was resolved in the grievant's favor by Arbitrator William P. Hobgood, who held that the Agency had improperly terminated the grievant's LQA. Arbitrator Hobgood issued an award on January 25, 1990, in which he ordered that the grievant's LQA be restored retroactively and that the grievant be made whole for any amounts withheld by the Agency. He also retained jurisdiction for purposes of entertaining a motion for attorney fees. See Exceptions, Attachment 1 (Hobgood Award). During the pendency of that grievance, the grievant filed a second grievance on May 29, 1989 (G-89-(E)-163) in which she alleged violations of the Debt Collection Act. The second grievance also protested the Agency's refusal to combine the two grievances before Arbitrator Hobgood, who had already been selected to hear the grievance on the validity of the termination of LQA. The second grievance was submitted to Arbitrator Seidenberg on the following stipulated issues:
(1) Was the employee's [g]rievance timely filed?
(2) If the [g]rievance was timely filed, did the DODDS, and its agent [finance office], violate the provisions of the Debt Collection Act of 1982, in effecting an offset of $200.00 per pay period from the pay of the [g]rievant (beginning with the pay period ending February 11, 1989)?
(3) If so, what shall be the remedy?
Award at 1.
The Arbitrator ruled that the grievance was timely filed and properly before him. He rejected the Agency's argument that the grievance should have been filed within 15 calendar days of the February 11, 1989 commencement of the LQA recoupment action. Instead, he found that the recoupment action constituted a continuing violation to which the grievant had vigorously objected.
On the merits of the grievance, the Arbitrator found that the grievant was entitled to a hearing and the other protections contained in the Debt Collection Act and he ruled that the Agency had violated the Debt Collection Act by refusing to provide those protections. The Arbitrator noted that "[o]n March 1, 1990 the Agency accepted Arbitrator Hobgood's decision on the first [g]rievance and took action to reinstate the [g]rievant's LQA retroactively to the date it had been terminated and to cease further collection on the [g]rievant's indebtedness and to refund all monies previously collected." Id. at 10.
The Agency argued that the recoupment of LQA which it imposed on the grievant was the same as a recovery of advance LQA, which required using the setoff procedures of 5 U.S.C. º 5922 rather than the Debt Collection Act procedures. The Arbitrator rejected the Agency's argument and found that "the Agency erred in not invoking the provisions of 5 USC 5514 [Debt Collection Act] in its efforts to collect the alleged indebtedness of the [g]rievant resulting from her Allowance for Living Quarters, but instead relied incorrectly on the administrative offset provisions of 5 USC 5592 . . . [which are] directed toward making setoffs for advance allowances granted to employees of the Government stationed in foreign areas." Id. at 31. The Arbitrator found that the LQA payments received by the grievant were authorized by the Agency and although the payments were purportedly erroneous, as claimed by the Agency, the payments were not advance payments. The Arbitrator stated that "the 1982 Debt Collection Act, 5 USC 5514, [was] the proper mechanism the Agency had to utilize in proceeding against the [g]rievant." Id. at 32. The Arbitrator noted that the grievant did not concede that the payments of LQA had been erroneous and he noted that the alleged debt was one "that the [g]rievant promptly and vigorously protested in good faith and under a color of right." Id.
The Arbitrator ruled "that the Agency erred in not invoking the 1982 Debt Collection Act in seeking to correct the alleged indebtedness from the [g]rievant, and it should therefore cease to make its administrative set offs against the [g]rievant, and should award her all the monies recouped with a payment of interest of 10% of these recouped monies." Id. at 34. He also retained jurisdiction for purposes of hearing a motion on attorney fees.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the award is deficient because the Arbitrator exceeded his authority and because the award is contrary to law. The Agency contends that the Arbitrator exceeded his authority by ruling on an issue which was not before him and which had already been decided by Arbitrator Hobgood, who awarded backpay as a remedy. The Agency states: "The issues before Arbitrator Seidenberg were limited to timeliness of the grievance and the procedures used to recoup money previously paid to the grievant." Exceptions at 3. The Agency maintains that because Arbitrator Hobgood had already ordered that the grievant receive backpay for the LQA recouped by the Agency, Arbitrator Seidenberg had no authority to also order backpay because the question of the grievant's eligibility for LQA was not before him.
The Agency also contends that the Arbitrator's award of backpay is contrary to the Back Pay Act and its implementing regulations contained in title 5, Code of Federal Regulations. The Agency claims that the Arbitrator's award creates an improper dual compensation because the Hobgood award of backpay for the improper recoupment of LQA had become final and binding on the parties and the Agency had already taken action to implement that award. The Agency argues that under the Back Pay Act, the grievant is only entitled to the same amount of pay and allowances that she would have been entitled to if an unjustified or unwarranted personnel action had not occurred and "Arbitrator Seidenberg's award which required double payment to the grievant is contrary to law and Government-wide regulation and must be set aside." Id. at 4.
The Agency asserts that the Arbitrator's award of 10 percent interest on the backpay for LQA erroneously recouped is also contrary to the Back Pay Act provision that interest "shall be computed at the rate or rates in effect under section 6621(a)(1) of the Internal Revenue Code of 1986." Id., citing 5 U.S.C. º 5596(b)(2)(B)(ii). Further, the Agency asserts that the Arbitrator improperly retained jurisdiction for purposes of entertaining a motion on attorney fees because without a proper award of backpay there can be no award of attorney fees under the Back Pay Act.
B. Union's Opposition
The Union points out that the Agency bases its exceptions in large part on the alleged duplicative nature of the Arbitrator's award with respect to the award of Arbitrator Hobgood. The Union contends that the Agency refused to combine the grievance over the Debt Collection Act procedures with the grievance on the grievant's entitlement to LQA decided by Arbitrator Hobgood and that the Union made "repeated and vigorous objections" to that refusal. Opposition at 1. The Union maintains that the Arbitrator decided the stipulated issues presented when he found that the recoupment of LQA from the grievant violated the safeguards of the Debt Collection Act and when he ruled that the Agency should repay the grievant the money that was improperly recouped. The Union denies that the Arbitrator ever ruled on whether the grievant was entitled to LQA and maintains that the entitlement issue had already been settled by the Hobgood award.
The Union states "[t]here is nothing in the Award or elsewhere in the record to suggest, however, that Arbitrator Seidenberg intended for the [g]rievant to collect twice for any dollar amount owed her." Id. at 2. The Union denies that it has or will attempt to claim double the amount due the grievant. The Union also states that it agrees with the Agency that "any payment of interest must be set at the rate set by the [Internal Revenue Service]." Id. at 3. As to attorney fees, the Union asserts that the Agency's exception is premature because no award of fees has been rendered thus far in connection with this matter.
IV. Analysis and Conclusions
A. The Arbitrator Did Not Exceed His Authority
An arbitrator exceeds his or her authority when he or she issues an affirmative order that goes beyond the scope of the matter submitted to arbitration or when he or she awards relief to persons who did not file a grievance on their own behalf or who did not have the union file grievances for them. U.S. Small Business Administration, Atlanta, Georgia and American Federation of Government Employees, Local 3906, 37 FLRA 137, 142-43 (1990); General Services Administration, Region VII, Fort Worth, Texas and American Federation of Government Employees, Council 236, 35 FLRA 1259, 1265-66 (1990).
In this case, the Agency has failed to establish that the Arbitrator exceeded his authority by ordering that the Agency cease making setoffs against the grievant's pay and that the Agency should repay "all the monies recouped" from the grievant. Award at 34. The Arbitrator's order is directly responsive to and does not go beyond the stipulated substantive issues of whether the Agency violated the provisions of the Debt Collection Act in its recoupment action against the grievant and, if so, what the remedy for that violation should be. See U.S. Department of the Air Force, Oklahoma City Air Logistics Center, Tinker Air Force Base and American Federation of Government Employees, Local 916, 35 FLRA 700, 703-04 (1990) (arbitrator resolved the issue before him and ordered relief consistent with his award and consequently did not exceed his authority). The fact that the issues addressed by the Arbitrator are related to the issue addressed by Arbitrator Hobgood does not prevent the Arbitrator in this case from reaching a finding on the matter presented to him. We also note that the Agency objected to the Union's request to combine the issue of the use of Debt Collection Act procedures with the issues in the arbitration proceeding before Arbitrator Hobgood. The Agency cannot now rely on its claim that because Arbitrator Seidenberg's award duplicates the Hobgood award, Arbitrator Seidenberg exceeded his authority.
B. The Award of Backpay Is Not Contrary to the Back Pay Act
In order for an award of backpay to be authorized under the Back Pay Act, an arbitrator must make the following determinations: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; (2) the personnel action resulted in the withdrawal or reduction of all or part of the grievant's pay, allowances, or differentials; and (3) but for such action, the grievant otherwise would not have suffered the withdrawal or reduction. For example, U.S. Department of the Treasury, Customs Service, New Orleans, Louisiana and National Treasury Employees Union, Chapter 168, 38 FLRA 163, 175-76 (1990). If an appropriate authority, such as an arbitrator, has made the above findings required by the Act, then the employee claiming relief under the Act
is entitled, on correction of the personnel action, to receive for the period for which the personnel action was in effect--
(1) an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period[.]
5 U.S.C. º 5596(b)(1)(A)(i).
We find that the Arbitrator made the required findings for an award of backpay. The Agency does not dispute that point but contends that the effect of the Seidenberg award is to double the amount of backpay awarded by Arbitrator Hobgood. However, we find that the Agency is mistaken in that respect and has misinterpreted the Arbitrator's award. There is nothing in the language of the Arbitrator's award to indicate that the grievant is to be paid an amount in excess of that to which she is entitled as backpay for the Agency's unjustified or unwarranted personnel actions. Thus, Arbitrator Hobgood ordered that the grievant be given retroactive LQA for money improperly withheld from her as the result of the Agency's erroneous determination that she was not entitled to LQA. Arbitrator Seidenberg ordered that the grievant be reimbursed for money improperly recouped from the grievant as the result of the Agency's failure to use the procedures of the Debt Collection Act. The Agency is required to pay the grievant only the amount of backpay which will reimburse her for the LQA which she would have received in the absence of the Agency's unjustified or unwarranted actions. The Agency fails to demonstrate that the Arbitrator's award of backpay for the money already recouped from the grievant's pay is duplicative of the award of Arbitrator Hobgood. Consequently, the Agency has failed to show that the award is contrary to the Back Pay Act.
C. The Arbitrator's Award of 10 Percent Interest Must Be Modified to Comply With the Back Pay Act
The Back Pay Act provides that interest "shall be computed at the rate or rates in effect under section 6621(a)(1) of the Internal Revenue Code of 1986." 5 U.S.C. º 5596(b)(2)(B)(ii). There is nothing in the Arbitrator's award to indicate whether the Arbitrator considered the rates in effect under section 6621(a)(1) of the Internal Revenue Code when he set the rate of interest at 10 percent. Moreover, neither party has demonstrated that the Arbitrator's assessment of 10 percent interest is, or is not, consistent with the applicable rate or rates under section 6621(a)(1) of the Internal Revenue Code of 1986. We note the Union's statement that it agrees that the interest rate must be established in accordance with the Act. Accordingly, in order to ensure that the award of interest is consistent with law, we will modify the award to include the payment of interest at 10 percent, if that rate is consistent with section 6621(a)(1) of the Internal Revenue Code, and if it is not, at whatever rate or rates are consistent with section 6621(a)(1) of the Internal Revenue Code.
D. The Arbitrator Properly Retained Authority to Consider a Request for Attorney Fees
We find no basis in the Agency's exception to the Arbitrator's retention of jurisdiction on which to find the award deficient. It is well established that an arbitrator may retain jurisdiction after issuing a final and binding award for the purpose of resolving questions relating to attorney fees. See, for example, Veterans Administration Medical Center, Leavenworth, Kansas and American Federation of Government Employees, Local 85, 38 FLRA 232, 240 (1990). In the present case, the Arbitrator has rendered an award of backpay to the grievant and has properly retained jurisdiction should the Union wish to file a request for attorney fees in connection with the matter before him. We find nothing deficient in this aspect of the award and, accordingly, we will deny the Agency's exception as to the Arbitrator's retention of jurisdiction.
The Arbitrator's award is modified by replacing the words "interest of 10%" with the words "interest at 10 percent, if that rate is consistent with section 6621(a)(1) of the Internal Revenue Code, and if it is not, at whatever rate or rates are consistent with section 6621(a)(1) of the Internal Revenue Code." Award at 34. The Agency's exceptions to the remainder of the award are denied.
(If blank, the decision does not have footnotes.)