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39:0848(70)NG - - NTEU and FDIC, Division of Bank Supervision, Chicago Region, Chicago, IL - - 1991 FLRAdec NG - - v39 p848

[ v39 p848 ]
The decision of the Authority follows:

39 FLRA No. 70













February 26, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). It concerns the negotiability of two provisions of an agreement that were disapproved by the Agency head pursuant to section 7114(c) of the Statute. One provision concerns the termination of probationary employees and the other concerns the per diem rate to be paid employees who do not incur lodging costs but who stay with relatives or friends. For the reasons that follow, we conclude that the first provision is inconsistent with Federal law and Government-wide regulation and is not within the duty to bargain. We conclude that the second provision is within the duty to bargain.

II. Procedural Issue

The parties were directed to adopt one of the provisions that is at issue in this case as the result of interest arbitration that was directed by the Federal Service Impasses Panel (the Panel). The arbitrator in that proceeding issued a decision on June 29, 1989, which included, among other things, the second provision herein.(1)

The arbitrator's decision was limited to portions of six articles that had been specifically presented to him. Parties' joint statement of position at 2. Subsequent to the issuance of the arbitrator's decision, the parties had "several discussions and met extensively on at least one occasion to continue substantive negotiations over several articles which remained unresolved after the arbitrator's award." Id. During those discussions, "provisions . . . were in fact modified and agreed to by the parties subsequent to the arbitrator's award." Id. By memorandum dated September 25, 1989, the Agency head disapproved two provisions, one of which was the subject of the arbitrator's award and another that had not been before the arbitrator.

The facts of this case are distinguishable from those in International Organization of Masters, Mates and Pilots and Panama Canal Commission, 36 FLRA 555 (1990) (Panama Canal Commission) In Panama Canal Commission, we dismissed the union's petition for review of negotiability issues because the parties' collective bargaining agreement had become final and binding when it was not disapproved by the agency head within 30 days of the date of an interest arbitrator's decision. In Panama Canal Commission, however, the interest arbitrator's decision encompassed the parties' entire agreement. Such is not the case here. Rather, the facts show that the parties engaged in further, substantive negotiations following the issuance of the interest arbitrator's decision and that issuance of that decision did not constitute the date on which the agreement was executed. Thus, in this case, unlike Panama Canal Commission, the 30-day time limit for Agency-head review, which is set forth in section 7114(c) of the Statute, was not triggered by the issuance of the interest arbitrator's decision.

III. Provision 1

ARTICLE 43 (Probationary Employees), Section 4:

A. Prior to making a recommendation to remove a probationary employee, the EMPLOYER will inform the employee in writing of the reasons, based upon inadequacies of the employee's post employment performance and conduct.

B. Upon request, the probationary employee will be provided a meeting with the EMPLOYER to present any evidence, explanation or defense to the potential removal. The probationary employee will be provided, upon request, with copies or access to any documents or files which evidence the employee's deficient conduct or performance in advance of the meeting. This includes information relied upon by the EMPLOYER which has not previously been provided. The employee may be represented by the Union.

C. If the EMPLOYER determines, after this presentation, to go forward with the recommendation to remove, all materials provided by the employee will be sent with the recommendation. The EMPLOYER will provide the employee with written notice of the final decision.

A. Positions of the Parties

The Agency asserts that this provision is inconsistent with law and Government-wide regulation because it creates procedural protections for probationary employees beyond those promulgated by the Office of Personnel Management (OPM) and would subject the termination of probationary employees to arbitral review. In support of this contention the Agency asserts that both the Authority and the courts have held that procedural protections for probationary employees may not be established through collective bargaining and may be provided by OPM alone. The Agency contends, additionally, that this provision excessively interferes with management's right under section 7106(a)(2)(A) to hire because it establishes procedural prerequisites to, and allows for arbitral review of, the termination of probationary employees.

The Union asserts that Provision 1 does not prevent the Agency from summarily terminating probationary employees and is fully consistent with law and Government-wide regulation. In this regard the Union asserts that under relevant court decisions,(2) only proposals that subject an agency's termination of a probationary employee to "after the fact third party review" restrict an agency's right to "summarily terminate a probationary employee." Union reply brief at 5. Additionally, the Union asserts that Provision 1 does not interfere with management's right to make its own assessment of an employee's qualifications, but "merely provides a procedure for allowing the employee to provide input when the supervisor is contemplating a recommendation of termination" and that these "procedural protections are fully consistent with OPM regulations." Id. at 6. The Union stresses that under the provision this input is to be made at the level of the Activity. The Activity has the authority only to make recommendations to the Agency, which makes the actual decision to terminate probationary employees. The Union argues that the measures encompassed by Provision 1 would place no constraints on the Agency's ability to make the decision to terminate a probationary employee and would not subject that decision to arbitral review.

The Union argues that Provision 1 does not interfere with management's right to hire. The Union contends that, under Authority case law,(3) that right is violated "only when the decision to terminate is subject to arbitral review or mandatory prerequisites to termination, such as enhanced notice or opportunity periods." Id. at 14.

B. Analysis and Conclusions

In INS, the United States Court of Appeals for the District of Columbia Circuit found that, in the Civil Service Reform Act of 1978, Congress expressly preserved an agency's discretion to remove summarily a probationary employee, retaining for the probationary employee only minimal due process. INS, 709 F.2d at 729; see Bremerton Metal Trades Council and Naval Supply Center Puget Sound, 32 FLRA 643, 661 (1988). The Authority has also reiterated that "'in enacting the Statute, Congress did not intend that procedural protections for probationary employees be established through collective bargaining under the Statute.'" American Federation of Government Employees, AFL-CIO, Local 1625 and Department of the Navy, Naval Air Station, Oceana, Virginia, 30 FLRA 1105, 1127 (1988) (quoting Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, AFL-CIO, 15 FLRA 714, 715 (1984) (HHS, SSA)). Rather, "Congress instructed OPM, not FLRA, to implement the probationary program and to provide whatever procedural protections were necessary for probationary employees." HHS, SSA, 15 FLRA at 715 (quoting INS, 709 F.2d at 729).

In our view, Provision 1 affords probationary employees procedural protections beyond those provided by OPM. The OPM regulations at 5 C.F.R. º 315.804 provide only that a probationary employee who is being terminated for unsatisfactory performance or conduct be notified in writing as to why he or she is being terminated and the effective date of the action. Under the procedures provided by OPM the employee is specifically not given a right of reply. Federal Personnel Manual (FPM) Chapter 315, subchapter 8-4.a.(3). In the FPM, OPM further provides that:

Although it is not required, it is good personnel practice to furnish every separated probationer with enough factual information (as distinguished from conclusions) about his/her performance or conduct to make the agency's basis for the action clear. One way to accomplish this is to have an appropriate supervisory or personnel official discuss the basis for the agency's action with the employee.

FPM Chapter 315, subchapter 8-4.a.(4).

Provision 1 requires that a probationary employee be provided notice at the recommendation stage that his or her termination is being contemplated and to be given the reasons for that action. At the employee's request, copies of, or access to, documents or files relied on that evidence the deficiencies in the employee's conduct or performance must be provided to the employee. Under the provision, the employee may request a meeting at which the employee is afforded union representation and the opportunity to present any evidence, explanation or defense to the "potential" removal. If, after the employee's presentation, the Agency determines to go forward with a recommendation to remove, all materials provided by the employee are to be forwarded with the recommendation.

We find, as the Union acknowledges, that these measures constitute procedural protections. We disagree with the Union, however, that they do not extend beyond those provided by OPM. The provision's requirement that notice of a potential termination be given a probationary employee at the recommendation stage and that the employee be given an opportunity to present an "explanation" or "defense" go beyond the procedures provided by OPM as does the requirement that material provided by the employee accompany any subsequent recommendation that the employee be terminated. The OPM-established procedures make no provision for an employee to proffer a defense or explanation during the process by which the decision to terminate him/her is made. In this regard, FPM Chapter 315, subchapter 8-4.a.(4), which is quoted above, is limited to authorizing an agency to furnish enough factual information to an employee to make the basis of the agency's action clear but does not extend to providing the employee with an opportunity to offer a reply or defense. And, pursuant to subchapter 8-4.a.(3) of FPM Chapter 315, "[t]he employee is not given a right of reply."

Because Provision 1 would establish procedural protections beyond those provided by OPM, it is inconsistent with Federal law and Government-wide regulation. Consequently, it is nonnegotiable under section 7117(a)(1) of the Statute. In view of this conclusion, it is unnecessary to address the parties' arguments concerning the applicability of management's right to hire to this provision.

IV. Provision 2

ARTICLE 48 (Travel), Section 1 E:

E. If an employee does not incur lodging costs (e.g., stays overnight with relatives or friends rather than at a hotel), the per diem will be as cited in subsections B. and C. above plus $25.00.

A. Positions of the Parties

The Agency characterizes this proposal as concerning a "salary supplement" or a "monetary fringe benefit." Agency Statement of Position at 10-11. Based on that characterization, it asserts that Provision 2 does not concern a negotiable condition of employment. In support of this assertion, the Agency contends that wages and other matters pertaining to compensation of federal employees are outside the duty to bargain. Secondly, the Agency asserts that Provision 2 violates the merit system principle of equal pay for work of equal value, which is set forth at 5 U.S.C. º 2301(b)(3). Based on these reasons, the Agency contends that Provision 2 is not negotiable.

The Union contends that the Agency has mischaracterized Provision 2 and that it does not, in fact, concern pay or benefits. The Union describes this provision as establishing a per diem rate and contends that because the Agency is not subject to the Federal Travel Regulations, Agency-promulgated travel regulations are negotiable, absent a showing of compelling need. The Union also disputes the Agency's contention that pay and fringe benefits are, per se, outside the duty to bargain. Lastly, the Union urges that the Agency's assertion that Provision 2 violates the merit system principle set forth at 5 U.S.C. º 2301(b)(3) is a "make weight argument" and should be dismissed. Union reply brief at 17.

B. Analysis and Conclusions

The Agency's assertion that pay and money-related fringe benefits, per se, are not conditions of employment is not a viable one in view of the Supreme Court's decision in Fort Stewart Schools v. FLRA, 110 S. Ct. 2043 (1990) (Fort Stewart). In Fort Stewart, the Court rejected an argument to the effect that wages and fringe benefits could not be deemed "conditions of employment" and upheld, as based on a permissible construction of the Statute, the Authority's conclusion that some proposals relating to a salary increase and fringe benefits concerned conditions of employment within the meaning of the Statute. Based on Fort Stewart, we reject the Agency's argument here.

We also reject the Agency's argument that Provision 2 is not negotiable because it is inconsistent with a merit system principle set forth in 5 U.S.C. º 2301(b). The Authority has held, on the basis of the legislative history of the Civil Service Reform Act of 1978,(4) that a merit system principle, alone, is not a basis on which the Authority will find a proposal nonnegotiable as conflicting with law. In order for a proposal that implicates a merit system principle to be found nonnegotiable, it must be established that the proposal conflicts with a law, rule or regulation implementing or directly concerning the merit system principle. For example, Department of the Air Force, Carswell Air Force Base, Texas and American Federation of Government Employees, AFL-CIO, Local 1364, 35 FLRA 754, 761-62 (1990); National Treasury Employees Union and Internal Revenue Service, 21 FLRA 730 (1986).

In view of our rejection of the Agency's arguments that: (1) pay and fringe benefits, per se, are not negotiable conditions of employment, and (2) merit system principles standing alone provide a basis for finding that a proposal conflicts with law, it is unnecessary to address the merits of the Agency's characterization of Provision 2 as concerning pay and fringe benefits.

Insofar as this provision concerns per diem for Agency employees traveling on official business we note that, as a Government controlled corporation, the Agency is not subject to the statutory and Government-wide regulatory provisions that govern travel on official business for the Government. 5 U.S.C. º 5701. Rather, Agency policies regarding such travel are established by internal Agency regulations. See American Federation of Government Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance Corporation, Madison Region, 21 FLRA 870 (1986) (Proposals 7 and 11). Under section 7117 of the Statute, matters that are covered by agency regulations are subject to bargaining unless the regulations are supported by a compelling need. See, for example, id. at 890. Here there is no claim that Provision 2 is inconsistent with an Agency regulation for which a compelling need exists.

Based on the foregoing, we conclude that Provision 2 is within the duty to bargain.

V. Order

The Union's petition for review as to Provision 1 is dismissed. The Agency shall rescind its disapproval of Provision 2.(5)

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

1. The Agency had filed exceptions to the interest arbitration award which were dismissed by the Authority in Federal Deposit Insurance Corporation, Chicago Region, Chicago, Illinois and National Treasury Employees Union, 38 FLRA 943 (1990).

2. 2 National Treasury Employees Union v. FLRA, 848 F.2d 1273 (D.C. Cir. 1988) (NTEU) and U.S. Department of Justice, Immigration and Naturalization Service v. FLRA, 709 F.2d 724 (D.C. Cir. 1983) (INS).

3. 3 American Federation of Government Employees, AFL-CIO, Local 1625 and Non-Appropriated Fund Instrumentality, Naval Air Station, Oceana, Virginia, 31 FLRA 1281 (1988) (Proposal 2).

4. 4 The Joint Explanatory Statement of the Committee on Conference for the Civil Service Reform Act stated:

Unless a law, rule or regulation implementing or directly concerning the principles is violated (as under section 2302(b)(11)), the principles themselves may not be made the basis of a legal action by an employee or agency.

S. Rep. No. 95-1272, 95th Cong., 2d Sess. 128 (1978).

5. 5 In finding that Provision 2 is within the duty to bargain, we make no judgment as to its merits.