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The decision of the Authority follows:
41 FLRA No. 62
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 Ernest E. Marlatt 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 did not file an opposition to the Agency's exceptions.
A grievance was filed contesting the "Fully Successful" performance ratings given to the two grievants by their supervisor. The Arbitrator sustained the grievance and directed the Agency to: (1) raise the grievants' overall ratings; and (2) determine whether the raised ratings entitled the grievants to monetary awards.
For the following reasons, we find that the award is deficient. Accordingly, we will set aside the award.
II. Background and Arbitrator's Award
The grievants, Purchasing Agents in the Prosthetics and Sensory Aids Service, contested "Fully Successful" performance appraisals given to them by their supervisor. The grievants contended that the supervisor gave them lower ratings than they deserved "out of spite." Award at 1. The grievants also contended that, despite a 70-percent individual workload increase during the evaluation period, they performed their jobs with no delays and almost no errors.
The Arbitrator found that, in order to receive a "Highly Successful" performance rating under the Agency's performance appraisal plan (Veterans Administration Manual MP-5, Part I, Chapter 430), the grievants would have had to receive an "Exceptional" rating in the two critical elements of "purchasing responsibilities" and "program support" in addition to a "Fully Successful" rating in the non-critical elements of "work planning and organization" and "program support." Id. at 2. The Arbitrator noted that the grievants' supervisor had rated the grievants "Fully Successful" in all elements. Id.
The Arbitrator stated that "[r]eading the manual literally, it is very doubtful that the grievant[s']' performance in any of the elements met the strict criteria for the '[E]xceptional' level." Id. at 3. The Arbitrator asserted, however, that he "must take into account the way that the evaluation system actually works in practice" because "[i]t is well known that such systems are subject to inflated ratings . . . ." Id.
Relying on statistics provided by the Agency showing that "one-third of all employees at the facility achieved '[E]xceptional' levels of accomplishment on each of their critical job elements," the Arbitrator stated that performance at the "Exceptional" level "simply reflects a demonstrably better-than-average performance of routine duties." Id. The Arbitrator concluded that "interpreting the standards as they are actually applied by management rather than literally according to the Manual, these grievants achieved an 'exceptional' level of performance on their two critical elements, 'Purchasing Responsibilities' and 'Program Support.'" Id.
As his award, the Arbitrator directed the Agency to change the grievants' ratings from "Fully Successful" to "Highly Successful." The Arbitrator also directed that the grievants' ratings be reviewed in order to determine whether the grievants should be recommended for a monetary award. Id. at 4.
III. Position of the Agency
The Agency contends that the Arbitrator's award is deficient because it is contrary to law. The Agency argues that the Arbitrator: (1) ignored evidence of the grievants' actual performance; (2) did not apply the established performance standards; and (3) did not make the findings necessary to sustain an award requiring the Agency to raise the grievants' performance ratings.
The Agency argues that the grievants' supervisor based the "Fully Successful" ratings given to the grievants on observation of their actual performance. The Agency states that the supervisor "concluded that neither employee had met the established criteria to merit a rating of '[E]xceptional' in either critical element." Exceptions at 2. The Agency notes that the Arbitrator did not disagree with the supervisor's assessment of the grievants' performance. In this regard, the Agency asserts that the Arbitrator's conclusion, that "'it is very doubtful that the Grievant's [sic] performance in any of the elements met the strict criteria for the "exceptional" level' . . . . amounted to concurrence with the supervisor on the grievants' level of actual performance." Id. (quoting Award at 3).
The Agency also argues that the Arbitrator's comparison between the grievants' ratings and the ratings distribution at the facility ignores the fact that the "statistics reflect ratings for approximately 1200 employees, including maintenance personnel, food service workers, nursing assistants, licensed practical nurses, clerical, and various other occupational categories." Id. at 3. The Agency notes that ratings from different supervisors and varying standards are also included within the statistical distribution. The Agency argues that 5 U.S.C. § 4203(b) requires that employee rating standards be unique for each employee or position.
The Agency also argues that "the Arbitrator ignores the legal limits on his remedial authority in reviewing performance awards which restricts [sic] him to determining if the Agency properly applied the standards and, if applicable, to applying the standards himself, if he finds on the basis of the record that they were improperly applied, or to ordering the grievants re-evaluated." Id. at 4. The Agency relies on the decision in Social Security Administration and American Federation of Government Employees, AFL-CIO, 30 FLRA 1156 (1988) (SSA I) to support its position.
IV. Analysis and Conclusions
In SSA I, the Authority reexamined the remedial authority of arbitrators in performance appraisal matters. Subsequently, in U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1122, 34 FLRA 323, 328 (1990) (SSA II), we described SSA I as "establish[ing] a two-prong test." We explained the test as follows:
First, an arbitrator must find that management has not applied the established standards or has applied them in violation of law, regulation, or a provision of the parties' collective bargaining agreement. If that finding is made, an arbitrator may cancel the grievant's performance appraisal or rating. Second, if the arbitrator is able to determine based on the record what the performance appraisal or rating would have been had management applied the correct standard or if the violation had not occurred, the arbitrator may order management to grant that appraisal or rating. If the arbitrator is unable to determine what the grievant's rating would have been, he must remand the case to management for reevaluation.
SSA II, 34 FLRA at 328.
In this case, the Arbitrator did not find that the Agency failed to apply the established performance standards. The Arbitrator also did not find that the Agency had violated law, regulation, or a provision of the parties' collective bargaining agreement in appraising the grievant. Rather, the Arbitrator effectively disregarded the established standards for the grievants and instead based his determination of the grievants' ratings on a statistical distribution of employees at the facility which showed that one-third of all employees had received ratings higher than "Fully Successful."
Because the Arbitrator did not find that the Agency either: (1) failed to apply the established performance standards; or (2) violated law, regulation, or the parties' agreement, the Arbitrator's award requiring the Agency to change the ratings on the grievants' two critical elements of "purchasing responsibilities" and "program support" is deficient. See U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 2006, 35 FLRA 931 (1990) (HHS). See also U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1395, 38 FLRA 1198, 1202 (1990); U.S. Department of Health and Human Services, Social Security Administration, Mid-America Program Service Center, Kansas City, Missouri and American Federation of Government Employees, Local 1336, 38 FLRA 610 (1990).
Finally, because the Arbitrator did not find that the Agency failed to apply the proper standards or that the standards were applied in violation of law, regulation, or the parties' agreement, we have no basis on which to modify the award to require that the grievants be reevaluated. HHS, 35 FLRA at 935. Accordingly, we will set aside the Arbitrator's award.
The Arbitrator's award is set aside.
(If blank, the decision does not have footnotes.)