41:0550(55)AR - - Air Force, Aerospace Guidance and Metrology Center, Neward AFB, OH and AFGE Local 2221 - - 1991 FLRAdec AR - - v41 p550
[ v41 p550 ]
The decision of the Authority follows:
41 FLRA No. 55
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Nicholas Duda, Jr. 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 found that the Agency violated the parties' collective bargaining agreement and applicable Agency regulations when it took disciplinary action and caused criminal indictments to be brought against the two grievants for destruction of Government property. The Arbitrator ordered that a Report of Survey issued against the grievants be modified to show that the grievants were not negligent and were not responsible for the destruction of property. The Arbitrator also ordered the Agency to reimburse the grievants for attorney fees incurred in defending themselves against indictments for theft in the Ohio state court and for the use of leave for meeting with attorneys.
The Agency filed exceptions to the award of attorney fees and the recrediting of leave on the grounds that the fees were incurred and the leave used for personal reasons by the grievants and there is no basis for the award under the Back Pay Act, 5 U.S.C. § 5596. For the following reasons, we conclude that the Agency fails to establish that the Arbitrator's award recrediting leave to the grievants is contrary to the Back Pay Act. We conclude that the award of attorney fees is deficient under the Back Pay Act because the Arbitrator did not provide proper support for the award. The exception to the recrediting of leave will be denied and the award of attorney fees will be set aside.
II. Background and Arbitrator's Award
The grievants are assigned to the afternoon shift of the Test Measurement Diagnostic Section (TMDE). On February 2, 1988, in preparation for an inspection by the Inspector General (IG) of the Air Force Logistics Command (AFLC), the shift supervisor instructed the grievants and another employee to move to the shop certain excess parts which were hidden under a storage elevator. The supervisor instructed the 18 employees working in the TMDE on the afternoon shift to take those parts which could be used for bench storage. The acting supervisor and another employee then placed the remaining excess parts in a trash dumpster. The purpose of disposing of the parts was to avoid a deficiency citation by the IG.
Subsequently, the dumping of excess parts was reported anonymously to the Fraud, Waste and Abuse Hotline of Newark Air Force Base. The Office of Special Investigations (OSI) assigned an investigator to look into the matter. The OSI investigator determined that the disposal of property by the grievants and other employees violated Federal law and that five employees, including the grievants, thought to be responsible should be prosecuted. "On February 12, on his own initiative and without knowledge of any [B]ase personnel, [the investigator] went to the Columbus, Ohio office of the United States Attorney for the Southern District of Ohio [where] he described his evidence and asked [F]ederal attorneys to initiate prosecution for violation of [Federal law]." Award at 22. The U.S. Attorney declined to prosecute the case.
The investigator, again on his own initiative, then determined that the five employees, including the grievants, involved in the property incident could be charged with theft under Ohio law. The investigator took the results of his investigation to the office of the prosecuting attorney for Licking County, Ohio, and asked that criminal charges be filed against the employees involved. The Licking County, Ohio prosecuting attorney agreed to press criminal charges against the five employees, including the grievants. "On or about June 1, 1988, [the grievants] and three other persons were each secretly indicted and charged under Ohio [Revised Code] 2913.02 in Licking County court on felony charges of grand theft." Id. at 26.
In September 1988, the Base legal officer met with the Licking County prosecutor and requested that the charges against the five employees be dismissed. The indictments were dismissed on or about September 6, 1988. The grievants had hired attorneys to defend themselves against the criminal indictments. Each grievant paid $2670.50 in legal costs and also used leave to meet with their attorneys.
On June 13, 1988, statements that each grievant had received an oral admonishment for assisting in the destruction of Government property were placed in each grievant's personnel file. There was also an investigation of the matter by an Air Force officer who issued a "Report of Survey" stating that the grievants, as well as three other employees, "committed willful misconduct and/or were negligent to some extent." Id. at 29. The officer recommended that "since the value of the destroyed property cannot be determined," the individuals involved should "be assessed a nominal liability of twenty-five ($25.00) dollars each." Id. The Base Comptroller sent the Report of Survey to the five employees involved on or about September 19, 1988. None of the employees was required to make a monetary payment.
The grievants filed grievances after they received the Report of Survey. The grievants contended that they were "innocently involved in an activity ordered by [their supervisor] and for which [they] were later charged with a crime, orally admonished and given notice of letter of survey." Id. at 31. They argued that the actions taken against them "were improper, without cause and discriminatory." Id. The Agency denied the grievances over the Report of Survey at step two of the grievance procedure as untimely filed.
The Base Comptroller and another officer signed final Reports of Survey which did not assess the recommended financial liability of $25 against the grievants. The Agency denied the grievances at the third step of the grievance procedure as untimely and on the ground that no financial liability was assessed. The grievances were submitted to arbitration.
The Arbitrator denied four motions by the Agency concerning (1) timeliness of the grievances, (2) lack of legal basis for the charges of discrimination, (3) lack of available remedies, and (4) lack of Agency control over the actions complained of by the grievants. The Arbitrator noted that the grievants had been informed that the oral admonishments had been removed from their files. He ruled that the oral admonishments would not be discussed further and that his award would address the Reports of Survey and the criminal indictments.
In finding the grievances to be grievable and arbitrable, the Arbitrator stated: "This case questions whether the Agency acted without cause, improperly, arbitrarily, unreasonably, discriminatorily and/or in violation of Air Force [r]egulations, [p]olicies and [p}ractices." Id. at 44. Further, the Arbitrator stated that the Agency has control over "its investigations and the requests and communications it initiates with civil authorities including those which impact on employees. Such Employer actions must be proper and not arbitrary, unreasonable and discriminatory and not in violation of the Labor Agreement and/or of Air Force policies, regulations and practices." Id.
The Arbitrator then addressed whether the Agency's actions violated the parties' collective bargaining agreement and/or Agency regulations and, if so, what the remedy should be. He referred to Air Force Regulation (AFR) 40-750, Discipline and Adverse Actions of Civilian Personnel, and determined that the Report of Survey is an adverse action under that regulation. The Arbitrator found that under AFR 177-11, Report of Survey Policy, financial liability can be assessed against employees and, consequently, can be an adverse action because the Report of Survey can result in reduction in pay. The Arbitrator further found that the Agency waited an undue length of time, approximately 7 months, before notifying the grievants of the Report of Survey and that that delay violated AFR 40-740. The Arbitrator determined that the officer who prepared the Report of Survey failed to show by sufficient evidence that the grievants acted negligently when they failed to stop the destruction of property or to notify the authorities of the destruction of property. The Arbitrator concluded that "there was a misapplication of AFR 177-111 and an improper, unreasonable and discriminatory finding without substantial evidence that grievants had committed negligence which had proximately caused a loss for which they were responsible." Id. at 64.
With respect to the criminal indictments against the grievants, the Arbitrator noted that he had no jurisdiction over the actions of civil authorities. However, he stated that the parties' collective bargaining agreement provides that the grievance procedure is available:
. . . for the resolution of grievances subject to the control of the Employer applicable to any matter involving interpretation, application or violation of this Agreement or local supplements thereto, any matter involving working conditions, or any matter involving the interpretation and application of policies, regulations and practices of the Air Force, AFLC, and subordinate AFLC activities not specifically covered by this Agreement.
Id. at 66, quoting from Article 6.01 of the Agreement.
The Arbitrator stated that, under Article 6.01, he could review the Agency's action to determine whether the action of the Agency and its investigator "was consistent with reasonable [Agency] [r]egulations, [p]olicies and [p]ractices and was a significant factor in costs to [the] grievants." Id. The Arbitrator determined that, based on the applicable Agency regulation governing the conduct of investigations by OSI, an installation commander is authorized to seek a criminal action in a civilian court and, therefore, the investigator violated the regulation by seeking indictments against the grievants and three other employees on his own initiative. Further, the Arbitrator found that the account of the incident that the investigator provided to civilian authorities "was misleading and inaccurate in several important ways." Id. at 69.
The Arbitrator found that the Agency "unreasonably delayed in correcting and taking control away from [the investigator]" and that the investigator's "misleading information and improper request for indictment and the [Agency's] unreasonable delay in undoing [the improper] action was the direct, proximate cause of the expenditure of money and use of certain leave entitlement by [the] grievants to prepare their defense." Id. at 71. The Arbitrator sustained the grievances and ordered the following remedy:
Grievants are entitled to be made whole to the extent possible for damages directly and proximately flowing from the improper actions of the Employer in relation to the Reports of Survey and pursuit of the criminal indictment. Accordingly, the Report of Survey should be corrected to show that grievants were not guilty of negligence and did not proximately cause the loss. Also, each grievant should be reimbursed for her/his $2670.50 legal fees. Finally [one grievant] should be credited with 31 hours of annual leave and 4 hours of sick leave. [The other grievant] should be credited with 35 hours [of] annual leave. Both grievants, each of whom has good records, suffered mental anguish over these matters. Hopefully, the Air Force will render them an apology.
Id. at 72.
III. Positions of the Parties
A. The Agency
The Agency contends that the Arbitrator's award of attorney fees is contrary to law because there is no statutory authority for paying employees' legal expenses resulting from criminal proceedings against them. The Agency asserts that the expenditure of funds can be made only when authorized by statute and that there is no statutory authority for reimbursing the grievants for attorney fees incurred in connection with the indictments brought against them in the Ohio state court. The Agency cites a number of Authority and Comptroller General decisions to support the position that attorney fees may not be reimbursed in the absence of statutory authority.
The Agency also contends that the award of attorney fees is contrary to the Back Pay Act because there has been no finding that the grievants had been affected by an unjustified or unwarranted personnel action which resulted in the reduction or withdrawal of the grievants' pay, allowance or differentials. The Agency maintains that the court action was a matter outside the Agency's personnel system and control, even though the matter was brought to the attention of civilian authorities by the Agency's investigator. The Agency asserts that the OSI investigation "did not constitute a 'personnel action' within the meaning of the Back Pay Act." Exceptions at 6, citation omitted.
The Agency asserts that the award of attorney fees is deficient because the Arbitrator failed to make the specific findings and analysis required under 5 U.S.C. § 7701(g). The Agency maintains that the Arbitrator based the award of attorney fees on the parties' collective bargaining agreement and not on any statutory authority.
The Agency also contends that the recrediting of leave used by the grievants to meet with their attorneys to prepare a defense against the criminal indictments is deficient because "the Arbitrator did not determine that an unwarranted personnel action directly resulted in the loss of leave." Id. at 8, emphasis deleted. The Agency maintains that even if there had been an unwarranted personnel action, "the Arbitrator did not specifically determine how much leave usage was attributable to it." Id. Further, the Agency contends that the award is contrary to provisions of Federal Personnel Manual (FPM) Supplement 990-2 that provide for granting excused absence to employees. The Agency asserts that "[a]ttending to personal legal matters is not indicated as an appropriate situation for granting such excused absence." Id. at 9.
B. The Union
The Union asserts that the Agency discriminated against the grievants by having them indicted and by not seeking the indictment of other employees who were also present at the time the excess parts and equipment were thrown in the dumpster. The Union contends that the other employees who were present and who knew of the improper disposal should also have been indicted along with the grievants. Further, the Union asserts that the Agency investigator did not reveal information concerning the other employees and that he gave false information to the news media which led to the indictment of the grievants. The Union also contends that the investigator "did not act to correct [the prosecuting attorney's] misimpressions of the extent of [the] grievants' involvement." Opposition at 6.
The Union maintains that the Agency is incorrect in arguing that there is no statutory authorization for attorney fees. The Union contends that the defense of the grievants against the indictment in state court was related to the personnel action arising from the Reports of Survey assessing $25 liability and from the oral admonishments. The Union contends that both the court case and the personnel action stemmed from the same investigation and claims that "[e]ven if the criminal indictments are not deemed personnel actions, the fees were 'related to the personnel action.'" Id. at 9. The Union argues that attorney fees are warranted under the standards contained in 5 U.S.C. § 7701(g) because the Agency's action against the grievants "was clearly without merit." Id. at 10. The Union points out that the U.S. Attorneys who were asked to prosecute the case by the Agency investigator declined to prosecute because of lack of evidence.
The Union contends that, apart from the Back Pay Act, "an agency has discretion to use appropriated funds to provide representation for an employee when the agency determines that representation of [the] employee is in the [G]overnment[']s interest and the conduct in question was in furtherance of an agency function." Id. at 12, citing Congressional Research Employees Association and Library of Congress, Congressional Research Service, 25 FLRA 306, 335 (1987) (Congressional Research Service). The Union contends that the prevention of the grievants' prosecution was in the Government's interest and that the grievants were merely following instructions of their supervisor and, therefore, "the conduct at issue was in furtherance of an [A]gency function." Id.
With regard to the recrediting of leave by the Arbitrator, the Union maintains that "an unwarranted deprivation of leave may be a personnel action for Back Pay Act purposes[.]" Id. at 13. The Union supports the Arbitrator's method of computing the amount of leave used by the grievants by using the number of hours for which attorney fees were charged on the days in question. The Union claims that even if the Arbitrator's method of calculating the amount of leave use was incorrect, the proper remedy would be to ask the Arbitrator for clarification or recalculation. The Union denies that the recrediting of leave violates the FPM, as alleged by the Agency.
IV. Analysis and Conclusions
A. Recrediting Annual Leave
We find no merit in the Agency's claim that the Arbitrator's award recrediting leave used by the grievants for meeting with attorneys violates the Back Pay Act. In order for an award of backpay to be authorized under the Back Pay Act, an arbitrator must determine that: (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. See American Federation of Government Employees, Local 1857 and U.S. Department of the Air Force, Sacramento Air Logistics Center, McClellan Air Force Base, California, 35 FLRA 325 (1990).
Recrediting an employee with annual leave lost as a direct result of an unwarranted or unjustified personnel action is authorized under the Back Pay Act. See, for example, Department of the Air Force, Kirtland Air Force Base and American Federation of Government Employees, Local 2263, AFL-CIO, 19 FLRA 260 (1985); American Federation of Government Employees, Local 1395 and Department of Health and Human Services, Social Security Administration, 10 FLRA 18 (1982). An agency's violation of its own regulations constitutes an "unwarranted or unjustified personnel action" as defined in 5 C.F.R. § 550.803.
The Arbitrator ruled that the parties' negotiated grievance procedure authorized him to review the Agency's conduct in this matter to determine whether the Agency had followed "reasonable Air Force [r]egulations, [p]olicies, and [p]ractices" and whether that conduct "was a significant factor in cost to grievants." Award at 66. The Arbitrator noted that AFR 124-4 set forth the procedures governing the release of information in Air Force OSI reports and that, under the regulation, the installation commander was the "Action Authority" responsible for taking judicial or administrative action on an OSI investigation. Id. at 67. The Arbitrator also noted that "[s]eeking a criminal action in a civilian court is a 'Command Action' under Section 3 of the regulation, to be taken by the Action Authority." Id. The Arbitrator ruled that the Agency investigator exceeded his authority under the regulation by releasing the results of the investigation of the grievants and seeking indictments of the grievants because only the commanding officer had that authority. The Arbitrator concluded that the investigator's improper actions and the Agency's unreasonable delay in having the indictments withdrawn "was the direct, proximate cause of the expenditure of money and use of certain leave entitlement by [the] grievants to prepare their defense." Id. at 71.
In our view, the Arbitrator made the required findings to support an award of backpay in the form of recrediting the leave used by the grievants. By finding that the Agency violated its regulations when it failed to prevent the investigator from improperly seeking the indictments in the Ohio court, the Arbitrator found that the Agency committed an unjustified and unwarranted personnel action for purposes of the Back Pay Act. Further, the Arbitrator found that the leave used by the grievants to prepare their defense to the criminal indictments was leave that was lost as the direct result of the unwarranted and unjustified personnel action. Therefore, the recrediting of that leave was authorized under the Back Pay Act.
As to the Agency's contention that the Arbitrator did not make a specific finding on how much leave was used by the grievants and that the award is speculative in that regard, we find that the Agency is merely disagreeing with the Arbitrator's evaluation of the evidence and his findings and conclusions which provides no basis for finding the award deficient. See, for example, 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).
We also find no merit in the Agency's contention that the award recrediting the grievants' leave is contrary to FPM Supplement 990-2. FPM Supp