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46:0003(1)AR - - DOL and AFGE, National Council of Field Labor Locals - - 1992 FLRAdec AR - - v46 p3

[ v46 p3 ]
The decision of the Authority follows:

46 FLRA No. 1













October 5, 1992


Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on an exception to an award of Arbitrator Robert W. Smedley 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 exception.

The Arbitrator ordered the Agency to strike a rating on a certain performance element of the grievant's annual performance evaluation because the Agency had not encouraged employee participation in establishing the performance standards for that element. For the following reasons, we conclude that the Agency's exception provides no basis for finding the award deficient. Accordingly, we will deny the exception.

II. Background and Arbitrator's Award

The Union filed a grievance contesting an employee's rating of "needs improvement" on a non-critical element of her performance evaluation. The Union challenged the rating on, among other grounds, the basis that "[n]o union or employee input went into formulation of the standards." Award at 10. The Union sought to have the grievant's rating on the disputed element stricken, or, in the alternative, changed from "needs improvement" to "meets[.]" Id. at 4-5.

When the grievance was not resolved, it was submitted to arbitration. In the absence of a stipulation by the parties, the Arbitrator framed the issue as follows:

Did management violate the collective bargaining agreement in its formulation of performance standards and its evaluation of the performance of grievant on element 6 . . . ?

If so, what is the appropriate remedy?

Id. at 2.

As relevant here, the Arbitrator found that the disputed performance elements and standards "were prepared by [three supervisors] at a weekend retreat." Id. at 16-17. The Arbitrator also found that although the grievant was "shown the proposed standards" and submitted comments on them, "management made no substantive changes[,]" on the standards but returned the grievant's submissions "with some snide comments." Id. at 17.

According to the Arbitrator, the evidence failed to show that "management encouraged employee participation[]" as "there was a perfunctory comment opportunity, and no give and take." Id. The Arbitrator concluded that, by failing to encourage employee participation in the establishment of the standards, the Agency violated 5 U.S.C. § 4302(a)(1), 5 C.F.R. § 430.204(c)(2) , and the parties' collective bargaining agreement.(3) As his award, the Arbitrator sustained the grievance and ordered the Agency to strike the disputed element from the grievant's performance rating.(4)

III. Exception

The Agency disputes the Arbitrator's conclusion that it did not comply with 5 U.S.C. § 4302(a)(2) when it established performance standards for the disputed element. The Agency claims that "[b]y providing the grievant the opportunity to comment on the standards[,]" it satisfied its responsibilities under 5 U.S.C. § 4302. Exception at 5-6. The Agency notes, moreover, that the grievant's supervisor "took the time to make substantive comments on most of the recommendations of the grievant." Id. at 6. Further, according to the Agency, the Arbitrator's characterization of those comments as "snide" is "not a legitimate basis for striking down a standard [nor is] such a remedy . . . within the scope or intent of §4302(a)(2)." Id. The Agency argues that, as the Arbitrator "improperly utilized [5 U.S.C.] § 4302(a)(2) as a basis to override the § 7106(a)(2)(A) and (B) management right to create performance elements and standards[,]" the award violates the Agency's right under section 7106(a)(2)(A) and (B) of the Statute to identify and implement performance elements and standards. Id. at 7.

Finally, the Agency objects to granting an outstanding rating to the grievant. According to the Agency, an arbitrator may order a grievant's performance rating raised only if the arbitrator properly determines what the grievant's rating would have been if the violation had not occurred. The Agency maintains that, as the Arbitrator "rejected arguments that the grievant's appraisal . . . was unfair or inaccurate[,]" the Arbitrator improperly raised the grievant's performance rating. Id. at 10.

IV. Opposition

The Union claims that the Arbitrator's award did not interfere with management's rights and is "in keeping with [Article 43, Section 20], . . . [which] allows the arbitrator to set aside a rating." Opposition at 3-4 (5). The Union also contends that although an outstanding rating "is in fact the ultimate outcome in this case," the rating was arrived at by "a purely mechanical process under the bargaining agreement" which requires an outstanding rating "if an employee exceeds all critical elements and 50% of the non-critical elements[.]" Id. at 3.

V. Analysis and Conclusions

Under section 7106(a)(2)(A) and (B) of the Statute, the Agency has the right to identify critical elements and to establish the contents of performance standards in accordance with applicable law. National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769 (1980), aff'd sub nom. NTEU v. FLRA, 691 F.2d 553 (D.C. Cir. 1982). An arbitrator may examine the performance standards and elements established by management for a grievant in order to determine whether they comply with applicable legal and regulatory requirements, including 5 U.S.C. § 4302 and 5 C.F.R. Chapter 430. Newark Air Force Station and American Federation of Government Employees, Local 2221, 30 FLRA 616, 636 (1987).

In this respect, 5 U.S.C. § 4302(a) obligates agencies to encourage employee participation in the development of their performance standards. Further, 5 C.F.R. § 430.204(c), which implements 5 U.S.C. § 4302(a), provides that agencies may encourage employee participation in the establishment of performance plans in a number of ways. Among the ways suggested, the regulation provides that agencies can encourage employee participation by submitting draft performance plans to employees and providing them an opportunity to comment on the plans. 5 C.F.R. § 430.204(c)(3). In this case, it is undisputed that the proposed standards were prepared by the supervisors, that they were given to the affected employees, that comments by the employees were submitted to supervisors, and that the comments were evaluated by the Agency. This process clearly is encompassed by the applicable regulation.

However, the Arbitrator also found that the comment period provided by the Agency was "perfunctory." Award at 17. In this regard, the Arbitrator found that the process used by the Agency did not encompass "give and take" between the grievant and his supervisor and that the grievant's supervisor made "snide" comments regarding the grievant's suggested changes. Id. The Agency does not dispute these findings.(6)

In effect, the Arbitrator concluded that the comment period provided by the Agency was a sham. The Agency does not argue, and we find no basis on which to conclude, that applicable law and regulation (7) permit the Agency to satisfy its statutory obligation to encourage employee participation in the establishment of performance plans through the use of a sham comment period. Accordingly, we reject the Agency's exception that the Arbitrator erred in finding that the Agency did not establish the disputed element in accordance with 5 U.S.C. § 4302(a)(2) and 5 C.F.R. § 430.204(c)(3). In view of this arbitral finding, the award striking the disputed element is not inconsistent with management's rights under section 7106(a)(2)(A) and (B) of the Statute.

We also reject the Agency's claim that the Arbitrator improperly raised the grievant's performance rating. In this case, the Arbitrator made no determination as to the grievant's proper performance rating. Rather, as noted by the Union, any change in the grievant's rating will result from application of the parties' collective bargaining agreement.

In sum, the Agency's exception provides no basis for finding the award deficient. Accordingly, we will deny the Agency's exception.

VI. Decision

The Agency's exception is denied.

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

1. 5 U.S.C. § 4302(a) provides, in relevant part:

(a) Each agency shall develop one or more performance appraisal systems which--

. . . .

(2) encourage employee participation in establishing performance standards[.]

2. 5 C.F.R. § 430.204(c) provides, in relevant part:

(c) Each appraisal system shall encourage employee participation in establishing performance plans. This may be accomplished by means including, but not limited to, the following:
(1) Employee and supervisor discuss and develop performance plan together; (2) Employee provides to supervisor a draft performance plan; (3) Employee comments on draft performance plan prepared by supervisor; and (4) Performance plan is prepared by a group of employees occupying similar positions, with supervisor's approval.

Final authority for establishing such plans rests with the supervising officials.

3. Although the Arbitrator did not specify the portion of the collective bargaining agreement to which he referred, the Arbitrator noted that according to Article 43, Section 2(B) of the parties' agreement, the "performance appraisal system is to 'Provide for employee participation in establishing performance standards and elements.'" Award at 15. In addition, the Arbitrator noted that Article 43 "is the parties' 'implementation'" of 5 U.S.C. § 4302 and 5 C.F.R. § 430.204(c). Id.

4. Although not addressed by the Arbitrator, it is undisputed that the grievant's summary performance rating would be raised from fully successful to outstanding as a result of the award.

5. Article 43, Section 20, provides, in relevant part:

The arbitrator . . . is empowered to set aside a rating on the basis of lack of fairness, reasonableness, objectivity and job relatedness for the job elements or performance standards.

Award at 6.

6. The Agency does not address the Arbitrator's finding that the comment period was perfunctory. The Agency asserts that the "so-called 'snide' comments . . . occurred after the grievant had already given her input into the development of the standards[]" and provide "no rational basis for striking down a standard . . . ." Exceptions at 6 (emphasis in original).

7. This view is consistent with the legislative history of 5 U.S.C. § 4302(a) which states that the section "specifically encourages employee participation in establishing performance objectives. Experience has shown that doing so motivates employees to accomplish the objectives." S. Rep. No. 95-969, 95th Cong., 2d Sess. 41 (1978), reprinted in House Comm. on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Civil Service Reform Act of 1978, at 1505 (Comm. Print No. 96-2, 1979). In addition, Federal Personnel Manual chapter 430, subchapter 2-3d, states that "employee participation is encouraged by statute because it is good management practice. Employees usually have a great deal of knowledge about the requirements of their jobs and also tend to be more committed to achieving expected levels of performance when they have had an opportunity to participate in establishing those levels."