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The decision of the Authority follows:
43 FLRA No. 22
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF DEFENSE
DEFENSE DEPOT MEMPHIS
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
November 22, 1991
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 Ed W. Bankston 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 sustained a grievance in which the Union alleged that management had violated the provision of the parties' collective bargaining agreement governing the selection of employees to work on a holiday. As a remedy, the Arbitrator ordered the Agency to pay backpay of two and one-half times the regular rate of pay to all employees who were required to work on the holiday and to all employees who would have been chosen to work on the holiday if the Agency had not violated the parties' agreement.
For the following reasons we conclude that the Arbitrator's award of backpay of two and one-half times the regular rate of pay for holiday work is deficient to the extent that it awards overtime pay to employees who did not perform or would not have performed work in excess of 8 hours in a day or 40 hours in a week. We will modify that aspect of the award. The Agency's remaining exceptions will be denied.
II. Background and Arbitrator's Award
The Agency determined that there was a need to perform work on the Columbus Day holiday, Monday, October 8, 1990. At least 37 employees assigned to the Monday through Friday day shift were ordered on the Friday preceding the holiday to report for work on the Monday holiday. Employees from other shifts were not ordered to report for work on the holiday and the Agency did not solicit volunteers for the holiday work assignment. The Union filed a grievance alleging that the Agency had violated Article 21, section D of the parties' collective bargaining agreement.(1)
The grievance was not resolved and was submitted to arbitration on the following stipulated issue:
Whether the Agency violated the Union's contract, Article 21, when it scheduled employees to work on their holiday (Columbus Day)? And, if so, what shall be the remedy?
Award at 3.
The Agency contended before the Arbitrator that it had the right under section 7106(a)(2)(B) of the Statute to assign work and to determine which employees would perform that work. The Agency also asserted that it had the right to take whatever actions were necessary to carry out its mission in emergencies. The Agency maintained that it had the right under the Federal Personnel Manual (FPM) to assign employees to work on holidays as part of their regular workweek and that the employees who were ordered to work received the premium pay to which they were entitled for holiday work. The Agency denied that the work assignment constituted an assignment of overtime covered by Article 21 of the agreement.
The Union agreed that the Agency had the right to order that work be performed on the holiday, but contended before the Arbitrator that the Agency had conditioned its exercise of that right by agreeing to the procedures for selecting employees for overtime and holiday work contained in Article 21 of the parties' agreement. The Union argued that, if the Agency had followed those procedures, a different group of employees would have been selected to work on the Columbus Day holiday. The Union requested the Arbitrator to order "overtime pay for all affected employees based on favorable interpretation of Article 21, Section D(2)." Id. at 13.
The Arbitrator found that the Agency had agreed to a procedure for the assignment of overtime. He noted that Article 21, section D of the parties' agreement clearly provided that management was required to use the overtime assignment procedures in making assignments for work on holidays. He concluded that "it follows that the Agency violated the Agreement by selecting employees for holiday work on Columbus Day, 8 October 1990, by means other than the procedures outlined in Article 21 of the Agreement." Id. at 18.
In determining an appropriate remedy for the Agency's violation of the collective bargaining agreement, the Arbitrator rejected the Agency's argument that no remedy was required because neither the Union nor any employees had been injured by the violation and the 37 employees who were required to work had received premium pay at double their regular rate of pay. He noted that Agency management was aware that it was violating the agreement when it made the assignment of holiday work and stated that "[s]uch violation is an affront to the entire bargaining unit and requires a remedy." Id. at 22.
The Arbitrator summarized his findings as follows:
1. The Agency violated the Agreement by failing to select employees for work on Columbus Day, October 8, 1990 in accordance with Article 21(D)(2) of the Agreement.
2. Pursuant to such violation, the Agency wrongfully forced at least thirty-seven (37) known employees to work against their "expressed desires" on Columbus Day, Oct. 8, 1990. Other employees (at this time unknown) may reasonably be shown to be similarly situated as it was agreed at the hearing that more than thirty-seven employees were forced to work the holiday.
3. But for the Agency's violation of [the] contract, other employees may have been selected to work on Columbus Day, October 8, 1990. Some, if not all, of these (potential) selectees may have been eligible for overtime rates having worked that day.
Id. at 24 (emphases in original).
The Arbitrator sustained the grievance and ordered the following remedy:
1. Those thirty-seven (37) employees known to have been forced to work on Columbus Day, October 8, 1990, shall be compensated with overtime pay at double-time and one-half (2 1/2) their hourly base rate(s). The Agency shall be credited with whatever individual amounts it has previously paid.
2. Where the Union is reasonably able to show employees additional to those thirty-seven (37) who worked involuntarily, those individuals shall be similarly compensated for having worked Columbus Day, October 8, 1990, at double-time and one-half (2 1/2) their hourly rates. The Agency is directed to assist in the identification of those employees, if any.
3. The Agency is directed to pay double-time and one-half (2 1/2) their hourly base rates to those employees who would have been selected to work on Columbus Day, October 8, 1990, but for violation of contract and pursuant to Article 21 of the Agreement.
Id. at 25 (emphasis in original).
III. Positions of the Parties
A. The Agency
The Agency contends that the Arbitrator misinterpreted the parties' agreement and erroneously extended the overtime procedures to cover holiday work that did not constitute overtime. The Agency maintains that it acted properly in making the assignments for holiday work and denies that the provisions of Article 21 were applicable in this case because there was no overtime involved. The Agency asserts that the 37 employees who worked on the holiday were paid the appropriate premium pay of double their regular rate for the holiday work and that the employees were not entitled to overtime because they did not work in excess of 8 hours on that day. The Agency states that the award erroneously interprets the agreement to convert holiday work into overtime, holds the Agency accountable for a breach of the agreement which the Agency has not committed, and "assumes bad faith" on the part of the Agency. Exceptions at 10.
The Agency asserts that the award is contrary to 5 U.S.C. § 5546(b) and that the agreement "cannot be reasonably interpreted to provide [that] the Agency would pay more for work on holidays than the law allowed, by simply calling it 'overtime.'" Id. at 9. The Agency also claims that the award is contrary to FPM Supplement 532-1, subchapter S8-4.b(4) and 5 C.F.R. § 610.202.
The Agency contends that the Arbitrator exceeded his authority by ordering a remedy for employees not covered by the grievance, including unknown employees who worked on the holiday and other unknown employees who might have worked if they had been asked. The Agency maintains that the Arbitrator improperly extended relief to employees "who were not (a) represented by the union, and (b) not identified grievants." Id. at 15. The Agency states that the Arbitrator "failed to include in his decision whether the instruction was limited to bargaining unit versus nonbargaining unit employees or both." Id. at 18.
The Agency also asserts that the award is deficient because the Arbitrator exceeded his authority by ordering damages for the violation of the agreement that are punitive and in excess of the amount payable under law for holiday work. The Agency states that under 5 U.S.C. § 5546 and the FPM, wage grade employees are entitled only to one and one-half times the regular pay rate for overtime work performed, "not the double time and one-half their hourly basis rate that was directed by the [A]rbitrator." Id. at 16.
B. The Union
The Union denies that the Arbitrator misinterpreted Article 21 of the parties' agreement and asserts that the agreement provision clearly applies to the assignment of work on holidays. The Union also denies that the Arbitrator exceeded his authority by extending relief to employees not included in the grievance. According to the Union, the Agency was aware of which employees had worked on the holiday and was required to maintain a roster of employees assigned to work overtime under Article 21.
The Union maintains that it does not challenge the Agency's right to assign work on the holiday, but that it only challenges the Agency's failure to use the assignment procedures of Article 21 in an attempt to avoid paying overtime to the employees who should have received the assignment. The Union does not agree that the Arbitrator's award is punitive and maintains that the award was justified and responsive to the issue presented to the Arbitrator.
IV. Analysis and Conclusions
A. The Award of Two and One-Half Times the Regular Pay Rate
The Arbitrator ordered that all employees, including the 37 wage grade employees who had been identified and others who had not been identified but had actually worked on the Columbus Day holiday, should be paid overtime pay at the rate of two and one-half times their regular pay rates.(2) As explained below, the only situation in which such a rate of pay could be paid is one in which an employee's work on the holiday also constituted work that entitled the employee to overtime pay. In ordering the remedy of overtime pay at the rate of two and one-half times the employees' regular pay rates, the Arbitrator awarded pay in excess of the holiday premium pay to which employees who were not eligible for overtime pay were entitled. Thus, to the extent that the Arbitrator awarded overtime pay to employees who were not entitled to overtime pay, the award is deficient. We conclude that the award of backpay at the rate of two and one-half times the regular rate for work that did not constitute overtime work is contrary to 5 U.S.C. §§ 5544 and 5546 and 5 C.F.R. §§ 532.503(a) and 532.507(a) and (b).
It is not clear from the record in this case whether any employee who actually worked on the Columbus Day holiday was also entitled under either 5 U.S.C. § 5544 or the FLSA to receive overtime pay for that work. Rather, the employees who actually worked on the holiday simply performed holiday work for which they were entitled to, and received, holiday premium pay. A wage grade employee "who performs work on a holiday which is not overtime work shall be paid the employee's rate of basic pay plus premium pay at a rate equal to the rate of basic pay." 5 C.F.R. § 532.207(a).
Wage employees are "paid for overtime work performed on a holiday at the same rate as for overtime on other workdays." 5 C.F.R. § 532.507(b). If any employee who actually worked or would have worked on the holiday was also entitled on the basis of hours worked to have received overtime pay, such employee would have been entitled to receive pay at the rate of two and one-half times the employee's basic pay rate. However, in the absence of a determination that any employee who actually worked on the Columbus Day holiday was entitled to overtime pay based on the hours worked in excess of 8 hours a day or 40 hours a week, the Arbitrator could not award overtime pay to that employee. However, as we have noted above, it is not clear from the record whether any employee who actually worked on the holiday was also entitled to receive overtime pay for that day. Consequently, insofar as the Arbitrator's award grants overtime pay to employees who were not otherwise entitled to overtime pay, the award is contrary to 5 U.S.C. §§ 5544 and 5546 and 5 C.F.R. § 532.507(a) and (b). The award will be modified to require a proper finding of entitlement to overtime before overtime pay can be awarded.(3)
With regard to any employees who would have been chosen to work on the holiday if the procedures of Article 21 had been followed, it must also be determined whether any of those employees would have also been entitled to overtime pay. If the employees who would have been chosen to work on the holiday would also have been entitled to overtime, they are entitled to receive an award of backpay for that overtime pay in addition to premium pay for the holiday. If those employees would not have been entitled to overtime pay, they would be entitled only to premium pay for the holiday. Therefore, the award will also be modified to reflect the proper entitlement of any employee who would have been chosen to work on the holiday had the proper procedures been followed.
In summary, under applicable law and regulation, those employees who actually worked on the Columbus Day holiday are entitled to double time and a half, rather than double time, for their work on the holiday, only if their work on that day constituted overtime work. Similarly, those employees who would have been chosen to work on the holiday if the Agency had complied with the agreement are only entitled to double time and a half if their work on the holiday also would have constituted overtime work.
B. The Arbitrator Did Not Exceed His Authority
We find no merit in the Agency's contention that the Arbitrator exceeded his authority by awarding relief to nongrievants. An arbitrator exceeds his or her authority when, among other things, he or she awards relief to persons who did not file a grievance on their own behalf or who did not have the union file grievances for them. See, for example, U.S. Department of Veterans Affairs, Veterans Administration Medical Center, Leavenworth, Kansas and American Federation of Government Employees, Local 85, 38 FLRA 232 (1990), request for reconsideration denied 39 FLRA 1162 (1991) (arbitrator did not exceed authority by ruling that bargaining unit employees of activities adjacent to a medical center were covered by award). An arbitrator may also exceed his or her authority by failing to confine his or her remedy to unit employees. See General Services Administration, Region VII, Fort Worth, Texas and American Federation of Government Employees, Council 236, 35 FLRA 1259, 1265-66 (1990) (arbitrator exceeded his authority to the extent that he directed agency to allow nonunit employees who were smokers access to designated smoking areas on other floors).
In the introduction to his award, the Arbitrator stated that the Union "grieved the fact that certain employees were involuntarily selected to perform work" on the holiday. Award at 2. The Arbitrator stated that, according to the Union, the Agency's action violated the parties' agreement because "all employees eligible for overtime selection were not given the consideration required [by the agreement]." Id. The Arbitrator noted that the grievance was filed by the Union on behalf of the 37 employees who had been positively identified as having worked on the holiday and on behalf of those employees who had worked and had not yet been identified. The Arbitrator also stated that the grievance covered employees who would have been chosen to work if the procedures of Article 21 had been followed by the Agency. The Arbitrator's statement indicates that the grievance was filed on behalf of all affected employees. The mere fact that all affected employees had not been identified by name does not support the conclusion that the Arbitrator awarded relief to nongrievants. See U.S. Department of Veterans Affairs, Allen Park Veterans Administration Medical Center, Allen Park, Michigan and American Federation of Government Employees, Local 933, 40 FLRA 160, 170 (1991) (disagreement with arbitrator's findings on which employees were covered by a grievance did not provide a basis for finding the award deficient). Further, it is not apparent from the record that the award applies to employees outside the bargaining unit. Therefore, we will deny the Agency's exception that the Arbitrator exceeded his authority.
C. The Award Does Not Constitute an Impermissible Award of Punitive Damages
Arbitrators are precluded from awarding punitive damages against the Federal Government. See Veterans Administration Medical Center, Cleveland, Ohio and American Federation of Government Employees, Local No. 31, 19 FLRA 242, 243 (1985). However, the Agency has not established that the award in this case imposes punitive damages against the Agency or that the award is in any way punitive. See U.S. Department of Justice, U.S. Federal Bureau of Prisons, U.S. Penitentiary, Lewisburg, Pennsylvania and American Federation of Government Employees, Council of Prison Locals, Local 148 C-3, 39 FLRA 1288, 1295-96 (1991), petition for review filed sub nom. U.S. Department of Justice, U.S. Federal Bureau of Prisons, U.S. Penitentiary, Lewisburg, Pennsylvania v. FLRA, No. 91-1232 (D.C. Cir. May 21, 1991) (although an arbitrator is precluded from awarding punitive damages against the Federal Government, an arbitrator's characterization of a remedy as punitive does not establish an independent basis for finding the award deficient). Accordingly, the Agency's exception fails to establish that the award is deficient and the exception will be denied.
We note that the Arbitrator found that the Agency violated the agreement when it failed to assign work on the Columbus Day holiday in accordance with the procedures in Article 21 and that, because of that violation, affected employees were entitled to compensation. Such awards of compensation to employees harmed by an agency's unjustified or unwarranted personnel actions are permissible under the Statute and the Back Pay Act, 5 U.S.C. § 5596. For example, Federal Employees Metal Trades Council and U.S. Department of the Navy, Portsmouth Naval Shipyard, Portsmouth, New Hampshire, 39 FLRA 3, 9-10 (1991) (where it is established that employees entitled to overtime under a collective bargaining agreement do not receive that overtime because of a violation of the collective bargaining agreement by an agency, those employees can be entitled to compensation for the lost overtime).
The first, second and third paragraphs of the Arbitrator's award are modified to read as follows:
1. Those thirty-seven (37) employees known to have been forced to work on Columbus Day, October 8, 1990, shall be compensated with holiday premium pay at double their hourly base rate(s). The Agency shall be credited with whatever individual amounts it has previously paid. Any employee who is shown to be entitled to overtime on the basis of hours worked in excess of 8 hours on that day or 40 hours in the administrative workweek shall also be entitled to overtime pay under 5 U.S.C. § 5544 and 5 C.F.R. §§ 532.503, 532.507, and 551.501.
2. Where the Union is reasonably able to show employees additional to those thirty-seven (37) who worked involuntarily, those individuals shall be similarly compensated for having worked Columbus Day, October 8, 1990, at double their hourly base rates. Any employee who is shown to be entitled to overtime on the basis of hours worked in excess of 8 hours on that day or 40 hours in the administrative workweek shall also be entitled to overtime pay under 5 U.S.C. § 5544 and 5 C.F.R. §§ 532.503, 532.507, and 551.501. The Agency is directed to assist in the identification of those employees, if any.
3. The Agency is directed to pay double their hourly base rates to those employees who would have been selected to work on Columbus Day, October 8, 1990, but for violation of contract and pursuant to Article 21 of the Agreement. Any such employee who is shown to be entitled to overtime on the basis of hours which would have been worked in excess of 8 hours on that day or 40 hours in the administrative workweek shall also be entitled to overtime pay under 5 U.S.C. § 5544 and 5 C.F.R. §§ 532.503, 532.507, and 551.501.
The Agency's remaining exceptions are denied.
SECTION 1 - GENERAL
A. The Agency and DLA Council agree that within the perimeters set forth in Sections 2 through 4, the establishment of procedures and the administration of this Article are matters for negotiation at the PLFA [Primary Level Field Activity].
B. Payment for overtime worked or granting compensatory time off, in lieu thereof, shall be in accordance with applicable laws and Government-wide regulations.
. . . .
[Defense Depot Memphis Tennessee]
Section A - General: The Employer reserves the right to determine overtime requirements. The assignment of overtime shall be based upon mission and workload requirements and on factors which are reasonable, equitable, and which do not discriminate against any employee or group of employees. Individual employees shall not be forced to work overtime or compensatory time against their expressed desires if full requirements can be met by other substantially equally qualified employees within the division willing to work. Employees should not work an amount of overtime which diminishes their alertness to a degree that the required work cannot be satisfactorily performed.
Section B - Selection of Employees to Work Overtime:
1. To assist in making overtime assignments, each supervisor shall maintain and use a register of regularly assigned employees by organization, section, job category, grade and service computation date. Overtime assignments shall be made on a rotational basis, except that a supervisor may temporarily pass over an individual if that overtime assignment would cause personal hardship. In making overtime assignments, supervisors are not required to consider employees on leave and detailed to another section. Supervisors shall consider employees assigned to shifts not on duty at the time overtime is being scheduled, consistent with operational needs.
. . . .
4. When a supervisor knows what overtime will be required, employees will be notified as soon as possible.
. . . .
6. Once overtime work has been approved for various work units, the concerned supervisor shall first ask all assigned employees by job category, grade and service computation date to work before contacting any other organization. If the supervisor is still unable to consume all the overtime hours, he/she will contact the concerned branch for additional skilled employees to consume the remainder of the overtime hours.
. . . .
Section C - Mandatory Overtime: When the determination is made that all employees in one or more divisions are required to work overtime, the Employer shall notify the Union President or its designee.
Section D - Holiday Work:
1. The requirement of holiday work will be based upon mission and workload requirements.
2. To assist in the selection of employees to work on holidays when required, the procedures outlined for overtime assignment in Sections A, B, and C of this Article shall apply.
(If blank, the decision does not have footnotes.)
1. Relevant portions of Article 21 are set forth in the Appendix to this decision.
2. The Arbitrator did not specify that the 37 identified employees and any other employees who were involved in the grievance are Federal wage system (wage grade or prevailing rate) employees covered by 5 U.S.C. § 5544 for purposes of overtime entitlement. However, the Agency states, and the Union does not dispute, that the employees involved are wage grade employees. See Exceptions at 4, 16.
3. We note that prior to May 4, 1991, prevailing rate employees who were covered by the FLSA were eligible for overtime pay under either 5 U.S.C. § 5544 or the provisions of the FLSA implemented for Federal employees in 5 C.F.R. part 551. 5 C.F.R. § 532.503(a)(1) (1990). The dual entitlement to overtime pay for covered employees, computed under either 5 U.S.C. § 5544 or the FLSA, has been eliminated by the Federal Employees Pay Comparability Act of 1990. Section 529 of Pub. L. No. 101-509, 104 Stat. 1460 (1990). Effective May 4, 1991, overtime pay for employees who are covered by the FLSA is computed and paid only under the FLSA. See 56 Fed. Reg. 20339 (1991).