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The decision of the Authority follows:
43 FLRA No. 14
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF DEFENSE
DEFENSE MAPPING AGENCY
ST. LOUIS, MISSOURI
NATIONAL FEDERATION OF FEDERAL EMPLOYEES
November 20, 1991
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This case is before the Authority on an exception to an award of Arbitrator Mark W. Suardi filed by the Union 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 Agency filed an opposition to the Union's exception.
The Arbitrator denied the Union's grievance, which claimed that the Agency violated the parties' collective bargaining agreement by unilaterally changing a past practice involving the computation and payment of overtime under the Fair Labor Standards Act, 29 U.S.C § 207 (FLSA). For the reasons explained below, we will remand the case to the parties for further processing consistent with our decision.
II. Background and Arbitrator's Award
The Defense Mapping Agency acts as paymaster for the 3600 employees located at the Aerospace Center in CCO Louis. The Agency uses the U.S. Air Force automated pay system for processing its payroll. The pay system is a computerized system under which pay data for each employee is entered into the system and paychecks are printed by computer. The record indicates that although all bargaining unit employees are covered by the overtime provisions of 5 U.S.C. § 5542, some employees are also covered by the overtime provisions of the FLSA.(1)
For ten or more years before November 1988, the Agency utilized a key punch system to process the employees' time and attendance cards. The Agency also performed manual FLSA overtime computations which allowed the Agency to include the full amount of any overtime compensation due an employee in the first paycheck issued after the close of the pay period in which the overtime was worked. In November 1988, the Agency replaced the key punch system with an optical mark reader (OMR) system, which electronically scans the time and attendance forms and automatically calculates both the base pay and the Title 5 overtime from these readings. However, with this new system, the payroll office was no longer able to perform the manual FLSA overtime computations in time to include the full amount of the FLSA overtime in an employee's next check. Consequently, employees only received their Title 5 overtime in their first check after the close of the relevant pay period. Employees who earned overtime at a greater rate under the FLSA than under Title 5 were paid the "overage" or additional amount in a future check. The grievance arose from this delay in the payment of the FLSA overtime.
Before the Arbitrator, the Union argued that: (1) the Agency could have bargained over the impact and implementation of the OMR system and there was no evidence that modification of the system was beyond the Agency's control; (2) the grievance was timely filed, as the change affecting the payment of FLSA overtime was continuing in nature; and (3) the Agency's previous method of paying FLSA overtime became a condition of employment and ripened into a binding past practice.
The Agency contended that the grievance was neither grievable nor arbitrable because it had no discretion to deviate from the Air Force's OMR system. The Agency argued that it had not intended to change the manner of FLSA overtime payment and only discovered that there was a problem when the Agency's payroll office tried to prepare the payroll using the OMR system. The Agency argued, further, that the grievance was untimely filed because the Union learned of the FLSA overtime payment change in late March or early April but did not file the grievance until after the 21-day filing period provided for in the parties' agreement.
The Agency asserted to the Arbitrator that the Union's reliance on the overtime provision of the parties' agreement was inapposite because FLSA overtime was being calculated and paid in accordance with applicable laws and regulations. The Agency also argued that it had the reserved right, under the management rights provisions of the agreement and section 7106(a) of the Statute, to delay the payment of FLSA overtime. In this connection, the Agency urged that it had the right to change past practices where, as here, such practices conflict with the Agency's reserved rights under the agreement. Finally, the Agency contended that the change in paying FLSA overtime had not had any real effects on employees and the Union's requested remedy was not possible with the current technology.
The Arbitrator stated that the issues in the case were: (1) whether the grievance was arbitrable; (2) if the grievance was arbitrable, whether the Agency violated the past practice provision and overtime provisions of the parties' collective bargaining agreement; and (3) if these contract sections were violated, what was the appropriate remedy.(2)
In addressing the grievance, the Arbitrator first responded to the Agency's contentions that the grievance was not timely filed and that it concerned a matter beyond the control of the Agency. The Arbitrator rejected these arguments finding, first, that the grievance was timely filed because it concerned a matter which was continuing in nature. Second, the Arbitrator found that the facts and exhibits presented did not establish that the grievance concerned a matter beyond the Agency's control.
The Arbitrator then addressed the merits of the grievance. The Arbitrator found that "both the Agency and the Union seem to agree that a binding past practice existed on the subject prior to November, 1988." Award at 18. The Arbitrator then determined that the question was whether the Agency could legitimately change the practice by its unilateral action. The Arbitrator concluded that the Agency did not violate the agreement and denied the grievance.
In reaching this conclusion, the Arbitrator found that the existence of a past practice under section 7-2 of the parties' agreement was "conditioned on there being no conflict with this agreement." Id. The Arbitrator then examined the management rights provisions of the agreement, which are contained in sections 5-1 and 5-2 of the parties' agreement.(3) The Arbitrator found that "the Agency's rights under Section 5.1 and 5.2 are inconsistent with the Union's claim for relief." Id. at 19 (emphasis in original). The Arbitrator concluded, therefore, that the past practice provision did not limit the Agency's right to unilaterally change the manner in which FLSA overtime previously had been paid. In making his findings as to the management rights provisions of the agreement, the Arbitrator stated that, in his opinion, the case before him was analogous to National Association of Government Employees, Local R14-89 and Headquarters, U.S. Army Air Defense Artillery Center and Fort Bliss, Fort Bliss, Texas, 32 FLRA 392 (1988) (Fort Bliss), which the Agency had cited in support of its position. In Fort Bliss, the Authority found that a proposal to maintain a pay lag at 6 days, rather than the agency's proposed 12 days, was nonnegotiable on the basis that the proposal interfered with the exercise of various management rights. The Arbitrator found that Fort Bliss did much "to resolve the question of the Agency's right to introduce the delay in payments here challenged." Award at 19.
The Arbitrator further held that, at that time, there would be no workable way for the Agency to grant the Union's requested relief without expending added time and manpower in the Agency's payroll office. The Arbitrator found that the requested relief would infringe on the Agency's rights under Article 5 of the agreement.
Finally, the Arbitrator found that the Agency's decision to delay the payment of FLSA overtime did not violate any law or regulation such as would give rise to a violation of the overtime provision of the parties' agreement and, further, that the processing of overtime did not violate 5 U.S.C. § 5542. Accordingly, the Arbitrator denied the grievance.
III. Positions of the Parties
A. The Union's Exception
The Union contends that the award is deficient because the Arbitrator used the wrong standard in reaching his decision. The Union states that if the resolution of a dispute involves a negotiability determination, as it does here, an arbitrator is required to apply the standards in National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24 (1986) (Kansas Army National Guard). The Union states that the Arbitrator failed to consider and apply Kansas Army National Guard. The Union also asserts that in deciding that Fort Bliss was analogous to the instant case, the Arbitrator did not consider the significant differences in the circumstances between the instant case and those in Fort Bliss. Finally, the Union states that the Arbitrator's finding, that there was no way to accommodate the Union's requested relief without an additional expenditure of time and resources, is based on facts that were not in evidence.
B. The Agency's Opposition
The Agency contends that the Union's exception constitutes mere disagreement with the Arbitrator's award and fails to establish a ground for review under section 2425.3 of the Authority's Rules and Regulations. The Agency maintains, contrary to the Union, that the Arbitrator did not make a negotiability determination but reasoned that if management in Fort Bliss had a reserved management right under the Statute to increase its pay lag from six to twelve days, then the Agency had a reserved management right under sections 5-1 and 5-2 of the parties' agreement to increase the delay in the payment of FLSA overtime. In this regard, the Agency refers to its closing argument before the Arbitrator, in which it stated that
[a] comparison of Sections 5-1 and 5-2 of the [agreement] with Section 7106(a) makes it clear that the Agency's reserved rights under the [agreement] are coextensive with its reserved rights under the Statute. In fact, the reference to Title VII, Public Law 95-454 is the public law citation to the Statute.
Enclosure 3 to Union's Exception at 15.
The Agency also maintains that the test for determining whether a proposal constitutes an appropriate arrangement set forth in Kansas Army National Guard is not applicable to the arbitration of the instant grievance because the grievance does not involve a bargaining proposal. In this connection, the Agency states that the Union's right to bargain over the impact and implementation of the change in FLSA overtime payment procedures was not an issue submitted to the Arbitrator. Finally, the Agency contends that the Arbitrator's findings of fact were based on the evidence presented and that the Union's disagreement with such findings does not constitute a basis for review.
IV. Analysis and Conclusions
The Authority will find an award deficient if it is contrary to law, rule or regulation or on other grounds similar to those applied by Federal courts in private sector labor relations cases. In this case, we are unable to determine whether the Arbitrator's award is deficient. Consequently, we will remand the case to the parties for further processing, as explained below.
As a general proposition, we will not disturb an award that is based solely on a contract interpretation. However, where, as here, that contract provision is a reiteration of the management rights provision of the Statute, we must exercise care to ensure that the interpretation is consistent with the Statute, as well as the parties' agreement. If parties intend that a contractual management rights provision which is identical to the language set forth in section 7106 of the Statute be interpreted in a manner that differs from, but is not inconsistent with, the Statute, that should be made known to the arbitrator, who can then clearly specify the basis for an award. The Authority would uphold the award insofar as it is not otherwise inconsistent with law, rule or regulation. In this case, we find that the Arbitrator did not interpret the parties' agreement so as to restrict the exercise of management's rights in a manner that is inconsistent with the Statute. Consequently, the Arbitrator's award, to this extent, is not inconsistent with the Statute. However, such a finding does not end our inquiry.
As noted, the Arbitrator found that the Agency did not violate the parties' agreement concerning the change in the timing of FLSA overtime payments. He reached that result based on an examination of the management rights provisions of the agreement, among others, and an application of the Authority's decision in Fort Bliss. The Union excepts to the award on the basis that the Arbitrator incorrectly applied Authority case precedent. After reviewing the award, and the basis for the Arbitrator's decision, it is not clear to us whether the Arbitrator was resolving the dispute based solely on an interpretation of the agreement or whether his award was based on an interpretation of the Statute and Authority case law defining an agency's rights under section 7106 of the Statute.
In this connection, we note that the management rights provision of the parties' agreement is a restatement of sections 7106(a) and 7106(b)(1) of the Statute. Significantly, the prefatory language of section 5-1 of the agreement states that the management rights clause is to be exercised in accordance with the Statute. Further, in explaining the application of the management rights provision of the agreement, the Agency specifically stated its view that management's reserved rights under sections 5-1 and 5-2 of the agreement are coextensive with the management rights contained in the Statute. Although the Arbitrator stated that he was "bound to apply the entire agreement of the parties[,]" the Arbitrator looked to the decision in Fort Bliss, which he found presented an analogous situation. Award at 18. Consequently, we are unable to ascertain from the award whether the Arbitrator applied only the provisions of the agreement, or the provisions of the Statute, as well.
If, in interpreting the parties' agreement, the Arbitrator had issued an award finding that the Agency had a statutory right to alter the method of paying FLSA overtime when Authority case law held otherwise, such an award would have been inconsistent with the Statute and, therefore, deficient as contrary to law. Similarly, if the Arbitrator had concluded that the Agency could not alter the method of paying FLSA overtime, when, in fact, the Agency had acted consistent with the exercise of a statutory management right, the Arbitrator's award would have been deficient as contrary to law. See for example, U.S. Department of Veterans Affairs Medical Center, Providence, Rhode Island and Laborers' International Union of North America, Local 1056, 37 FLRA 566 (1990) (arbitrator's award finding violation of parties' agreement and ordering negotiations over changes in position description and assignment of duties found inconsistent with management's right to assign work under the Statute and modified to reflect statutory bargaining obligations). In the absence of a clear understanding as to the basis of the Arbitrator's award, we are unable to assess whether the award is contrary to law, rule and regulation.
Therefore, we will remand this case to the parties for resubmission to the Arbitrator to clarify the basis of his award. The parties should also be advised that the Authority no longer adheres to Fort Bliss. See American Federation of Government Employees, Local 1698 and U.S. Department of the Navy, Naval Aviation Supply Office, Philadelphia, Pennsylvania, 38 FLRA 1016 (1990). See also National Federation of Federal Employees, Local 2099 and U.S. Department of the Navy, Naval Air Systems Command, Naval Plant Representative Office, St. Louis, Missouri, 38 FLRA 1191 (1990); Department of the Army, U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana and Finance and Accounting Office for the Secretary of the Army, St. Louis, Missouri, 41 FLRA 885, 896 (1991), petition for review filed sub nom. U.S. Department of the Army, U.S. Army Enlisted Records and Evaluation Center, Fort Benjamin Harrison, Indiana v. FLRA, No. 91-1473 (D.C. Cir. Sept. 26, 1991).
The case is remanded to the parties for resubmission to the Arbitrator in accordance with this decision.
Article 5 (Rights of the Employer), Section 5-1 states in pertinent part that
[i]n accordance with Title VII [Federal Service Labor-Management Relations], Public Law 95-454, nothing in this Agreement shall affect the authority of any management official of the Employer:
a. To determine the mission, budget, organization, number of employees and internal security practices of the Employer.
b. In accordance with applicable laws:
(1) To hire, assign, direct, layoff and retain employees, or to suspend, remove, reduce in grade or pay, or take other disciplinary action against such employees.
(2) To assign work, to make determinations with respect to contracting out, and to determine the personnel by which the Employer's operations shall be conducted.
(3) With respect to filling positions, to make selections for appointments from:
(a) Among properly ranked and certified candidates for promotion.
(b) Any other appropriate source.
(4) To take whatever actions may be necessary to carry out the Employer's mission during emergencies.
Section 5-2 states that
[t]he obligation of the Employer to negotiate with the Union does not include the numbers, types and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty, or on the technology, methods and means of performing work.
(If blank, the decision does not have footnotes.)
1. At the time of the processing of the grievance in this case, General Schedule employees who were entitled to overtime compensation under 5 U.S.C. § 5542 and who were also covered by the FLSA, were entitled to overtime compensation under the FLSA if that entitlement was greater than under 5 U.S.C. § 5542. 5 C.F.R. § 551.513. The Federal Employees Pay Comparability Act of 1990, Pub. L. No. 101-509, § 210, 104 Stat. 1427, eliminated the requirement to perform overtime computations under both title 5 and the FLSA for covered employees. Instead, overtime pay for employees covered by the FLSA are to be computed and paid only under the FLSA. See 56 Fed. Reg. 20339-20343 (1991).
2. Article 7 (Employee Rights), Section 7-2 (Past Practice), provides:
Those privileges which by custom, tradition, or known past practice have become an integral part of working conditions, which are not in conflict with this Agreement, shall not be abridged as a result of not being enumerated in this Agreement.
Article 32 (Overtime), Section 32-5 provides in pertinent part:
Premium pay for overtime work will be computed and paid in accordance with applicable laws and regulations. . . . Actual hours worked will be paid at the applicable overtime rate, when worked in conjunction with the normal tour of duty.
3. Sections 5-1 and 5-2 are set forth in the Appendix to this decision.