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39:1376(120)NG - - IBEW, Local 532 and DOI, Bureau of Reclamation, Billings, MT - - 1991 FLRAdec NG - - v39 p1376

[ v39 p1376 ]
The decision of the Authority follows:

39 FLRA No. 120













March 22, 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 by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute) involving one proposal. The Agency filed a Statement of Position. The Union did not file a Reply Brief.

For the following reasons, we conclude that the proposal, which provides that, in determining the prevailing wage rate for employees, a bonus paid by one of the four companies surveyed to determine the prevailing rate be considered as part of the base pay for that company, is nonnegotiable.

II. Background

The Agency's bargaining unit employees engage in collective bargaining pursuant to section 704 of the Civil Service Reform Act of 1978 (CSRA), Pub. L. No. 95-454, 92 Stat. 1111, 1218, codified at 5 U.S.C. º 5343 (Amendments) (1988 ed.) and section 9(b) of the Prevailing Rate Systems Act (PRSA or the Act), Pub. L. No. 92-392, codified at 5 U.S.C. º 5343 (Amendments note) (1988 ed.).

In February 1990, the parties agreed to survey four companies in order to establish prevailing rates and pay practices. One of the companies surveyed, Montana Power, had negotiated a 3-year agreement which provided that employees would receive a 3 percent cash signing bonus in the first year of the agreement. The parties could not agree on the effect of the bonus on their prevailing rate determinations.

III. The Proposal

The Union did not specifically set forth its proposal. Based on the record, however, we construe the Union's proposal as requiring the bonus paid to Montana Power employees to be included in the base rate for that company when the parties calculate the prevailing rates to be applied to the Agency's employees. We base our conclusion on the Union's assertion that the Agency "has refused to recognize or include the 3 [percent] cash signing bonus in wages[,]" and "will only acknowledge increases in base pay." Union's Petition at 1. The Union's assertion is consistent with the Agency's assertion that the Union "proposed that the cash signing bonus be included in the calculations of base pay for all classifications of employees." Statement of Position at 2.

IV. Positions of the Parties

A. The Agency

The Agency contends that the term "prevailing rates" refers "only to the hourly rates of basic pay received by employees in the companies surveyed . . . ." Id. at 3 (emphasis in original). The Agency concludes that, as the bonus paid to Montana Power employees was not included in their basic rate of pay, the bonus cannot be included in the prevailing rates for the Agency's employees.

The Agency contends that, as the parties had not "specifically negotiated on a cash signing bonus as a lump sum payment prior to August 19, 1972[,]" the pay practice included in the Union's proposal cannot now be negotiated. Id. at 5. Moreover, the Agency contends that the pay practice included in the proposal is not a "prevailing" practice within the companies surveyed by the parties because the bonus paid by Montana Power is not even "part of the basic hourly pay rates which Montana Power pays its employees for work performed." Id. at 3.

Finally, the Agency contends that as the payment of a lump sum cash signing bonus would "add an extra amount to the prevailing basic wage rates" the proposal directly interferes with its right to determine its budget under section 7106(a)(1) of the Statute. Id. at 8.

B. The Union

The Union did not file a reply brief. In its petition for review, the Union notes that Montana Power settled a "3-year agreement with a 1st year payment of a cash signing bonus." Petition for Review at 1. The Union asserts that the Agency "has refused to recognize or include the . . . bonus in wages." Id. The Union states that it "would like . . . the cash signing bonus to be recognized as a negotiability issue and to be included on [sic] the base pay for all classifications." Id.

V. Analysis and Conclusions

It is undisputed that the Agency's bargaining unit employees are covered by and engage in collective bargaining pursuant to section 704 of the CSRA. Section 704 provides, in relevant part:

(a) Those terms and conditions of employment and other employment benefits with respect to Government prevailing rate employees . . . which were the subject of negotiation in accordance with prevailing rates and practices prior to August 19, 1972, shall be negotiated on and after the date of the enactment of this Act in accordance with the provisions of section 9(b) of Public Law 92-392 without regard to any provision of chapter 71 of title 5, United States Code . . . .

(b) The pay and pay practices relating to employees referred to in paragraph (1) of this subsection shall be negotiated in accordance with prevailing rates and pay practices without regard to any provision of--

(A) chapter 71 of title 5, United States Code . . . .

For the purposes of section 704(b), "the term 'pay' means the rate of basic pay for a position held by an employee covered by the provisions of section 704 of the CSRA." United States Information Agency, Voice of America, 37 FLRA 849, 859 (1990) (VOA). The term "pay practices" means "matters historically considered part of an employee's compensation package, such as: (1) adjustments to an employee's basic rate of pay; (2) matters concerning the payment of differentials, overtime, and premiums; and (3) any other general compensation policies that entered into and became a part of the employee's total compensation package." Id. at 861. As relevant here, section 704(b) "precludes negotiations over matters relating to pay and pay practices if those matters are not among current industry practices." Department of the Interior, Bureau of Reclamation, Washington, D.C. and Department of the Interior, Bureau of Reclamation, Lower Colorado Regional Office, Boulder City, Nevada, 36 FLRA 3, 7 (1990). See also United States Information Agency v. Federal Labor Relations Authority, 895 F.2d 1449, 1455 (D.C. Cir. 1990).

We conclude, in agreement with the Agency's undisputed assertion, that the Union's proposal relates to pay or a pay practice under section 704(b). We note that in order to determine the basic wage rate for the Agency's employees, the parties agreed to survey four companies within their industry. Unit employees' wages are, in turn, based on the data received from the survey. It is clear from the parties' positions that inclusion of the bonus paid to Montana Power employees in the basic wage rate for that company would affect both the data used to determine unit employees' wages and, as a result of that effect, the wages themselves. Moreover, the effect of the calculations of the wage data on employees' pay is direct and immediate. In fact, it is undisputed in this regard that the "added percentage proposed by the Union for the value of the cash signing bonus translates into actual dollars when applied to the wage rates" of unit employees. Statement of Position at 8. As such, we conclude that the proposal to include the bonus in the basic wage rates of Montana Power relates to pay or a pay practice, within the meaning of section 704(b). Compare VOA, 37 FLRA at 861 (Authority stated that proposals relating to the methods or mechanics of compensating employees, such as time or method of paycheck delivery, did not relate to pay or pay practices).

As noted previously, proposals relating to pay or pay practices are not negotiable under section 704(b) unless the proposals are consistent with current industry practice. The record in this case does not demonstrate that the proposal is so consistent. We note first, in this regard, that it is undisputed that "[f]our survey companies were agreed upon [by the parties] in February 1990 to establish pay and pay practices." Petition for Review at 1. It also is undisputed that the disputed bonus paid by one of the companies "is not part of the basic hourly pay rates" paid by that company. Statement of Position at 3.

Based on the foregoing, we conclude that the practice which the Union proposes is not prevailing within the segment of the industry which the parties have agreed will be used to determine prevailing rates and practices. In fact, although one of the four surveyed companies paid a signing bonus, that company did not include the bonus in its basic wage rates. There is, therefore, no evidence that the practice of including signing bonuses in basic wage rates exists at all within the industry surveyed by the parties. Accordingly, we conclude that the proposal does not involve a prevailing pay practice within the meaning of section 704(b) of the CSRA, and that, therefore, the proposal is nonnegotiable.

VI. Order

The petition for review is dismissed.

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