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The decision of the Authority follows:
47 FLRA No. 75
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF VETERANS AFFAIRS
MARTINSBURG, WEST VIRGINIA
NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
June 4, 1993
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 James C. Duff 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 the grievance of an employee who received a performance appraisal rating of "Fully Successful" and ordered that the grievant "be treated in all respects as if her . . . rating had been 'Outstanding.'" Award at 9.
For the following reasons, we conclude that the award is deficient, in part, and must be modified to require the Agency to reevaluate the grievant to determine the proper rating.
II. Background and Arbitrator's Award
The grievant received a performance appraisal rating of "Fully Successful" for the rating period April 1, 1990, through March 31, 1991. She had received a rating of "Outstanding," two levels higher, for each of the prior two appraisal periods.
Article 17 of the parties' collective bargaining agreement deals with the subject of performance appraisal and provides, among other things, that certain procedures are to be followed and that supervisors will be encouraged to conduct periodic guidance sessions apprising employees of their performance on an on-going basis. In addition, the Agency's Personnel Manual (the Manual) provides that there shall be a "progress review" at least once during each appraisal period during which, "[a]t a minimum, an employee shall be informed of his/her level of performance by comparison with the elements and performance standards established for his/her position." Manual, Part 1, Chapter 430, Section B.4.k, quoted in Award at 7. The Manual also provides,
If performance of any element is less than fully successful, appropriate action in the form of a written counseling or a warning of unacceptable performance should be initiated to correct the performance deficiency[.]
The grievant is an Inventory Management specialist, whose duty is to monitor and replenish supplies to ensure that there is adequate stock in the warehouse. At her formal progress review in October, 1990, "the [g]rievant was only advised . . . that her performance level was 'Fully successful or better.'" Award at 7. There was no evidence that she was informed at the progress review about any aspects of her performance deemed not to be exceptional.
The performance appraisal indicated that the grievant had achieved a level of "Fully Successful" in the three rating elements. In the grievance, the grievant contended that she had no forewarning that she was not still performing at the "Outstanding" level.
The Union contended before the Arbitrator that during the rating period the retirement of a fellow employee, who was not replaced, resulted in extra duties being assigned to the grievant as well as a strained working atmosphere in the work area. Two coworkers supported the grievant's contention that she had done more work during the period than previously. The Union argued that, if anything, the grievant's performance was better than during the previous two appraisal periods in light of the fact that her office was understaffed. The Union pointed out that the grievant was never told that her performance was not up to her past standards of excellence, and argued that the Agency had failed to justify the appraisal. In addition, the Union contended that the records relied on in rating the grievant do not necessarily indicate who is responsible for shortfalls in supplies, and asserted that the rating was not done objectively.
The Agency maintained before the Arbitrator that the rating was appropriate because neither the rating official, who was the grievant's immediate supervisor, nor the approving official, who was the second level supervisor, found the grievant's achievement levels to have far exceeded normal expectations, and contended that the grievant failed to sustain the burden of proving that her rating was in error. Specifically, the appriving official testified that what she regarded as excessive back order/cancellation rates and failure to initiate replenishment action when needed were deficiencies in the grievant's performance. In addition, she cited under-utilization of the grievant's commitment authority regarding the Supply Fund, which is used to requisition supplies for the warehouse, and a low closing balance of stock on hand at the end of the fiscal year. The approving official admitted that she never told the grievant that her performance was declining. However, she claimed that she had informed the grievant at various times that the back order/cancellation rate was not acceptable.
The Arbitrator ruled that the Agency's failure to provide the grievant "with clear delineation of what was expected of her with respect to the alleged deficiencies it later cited flawed her 'Fully Successful' performance rating for the period in question." Award at 7-8. He found that under the Manual section cited above, the grievant was entitled to know "at least where she could improve to again achieve the Outstanding performance rating she had previously earned twice." Id. at 7. He found no evidence that the fact that her performance of certain aspects of her job was deemed not to be exceptional was raised at the grievant's progress review. To the contrary, he found that
she received only a blanket statement which failed to compare her level of performance of her job elements with the performance standards criteria, thus being left in the dark as to her standing. She very naturally thought that her performance continued to be outstanding because she was working as hard as ever.
Id. at 8.
The Arbitrator found that the progress review is "designed to guarantee that an employee be informed specifically of his/her level of performance for rating purposes at least once during the appraisal period." Id. Therefore, he concluded that it was insufficient that the Agency may have addressed or touched on some aspects of the grievant's performance problems outside of the formal progress review. The Arbitrator concluded that the terms of Article 17 of the parties' collective bargaining agreement were violated when the procedure set forth in the Manual was not fully adhered to and that "the [g]rievant is entitled to be made whole." Id. at 9. As his award, the Arbitrator ordered that the grievant "be treated in all respects as if her April 1, 1990 to March 31, 1991 rating had been 'Outstanding'." Id.
III. Positions of the Parties
A. The Agency
The Agency contends that the Arbitrator's award is contrary to law, rule, and regulation because it violates 5 C.F.R. § 430.205(e)(1) as well as Part 1, Chapter 430, Section B.4.k of the Manual, quoted above. The Agency recognizes that the Manual provision and the regulation upon which it was based "clearly require that the employee be informed, in the Progress Review, of the level of his/her performance by comparison with the performance elements and standards, and if they are less than Fully Successful, an appropriate action or warning be initiated." Exceptions at 3-4. However, the Agency argues that the Arbitrator has incorrectly interpreted the Manual and the regulation by finding that they entitle the grievant to be warned that performance is declining from the Highly Successful or Outstanding level. Rather, the Agency contends that the cited provisions "are clearly intended to ensure that employees perform at least at the Fully Successful level and to apprise the employees in that regard." Id. at 4. Thus, the Agency argues that there is no requirement that it warn the grievant that her performance was declining from the Outstanding level of the prior year.
The Agency also contends that even if the arbitrator was correct in finding that the Agency violated the parties' agreement, the award is contrary to Authority precedent because the Arbitrator ordered the grievant to be treated as if she had received a higher rating without making the necessary finding that the grievant would have received that rating if the Agency had not violated law, rule or regulation. The Agency maintains that the Arbitrator cannot order the Agency to treat the grievant as if she had received the higher rating based solely on a finding that the Agency violated its Personnel Manual.
The Agency cites Social Security Administration and American Federation of Government Employees, AFL-CIO, 30 FLRA 1156 (1988) (SSA I) and 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), in which the Authority described the two-prong test used in examining an arbitrator's exercise of his or her remedial authority in cases involving the application of performance standards. The Agency argues that inasmuch as the Arbitrator did not find that the grievant would have been rated differently if it had provided counseling at the progress review and informed her that she probably would be rated at a lower level than in previous years, the second prong of the test in SSA II was not satisfied. If it is necessary to reevaluate the grievant, the Agency requests that the matter be remanded to it for determination of the proper rating.
B. The Union
The Union contends that the Arbitrator's award satisfies both requirements of the Authority's two-prong test. It argues that the award is not contrary to law, rule or regulation because, contrary to the Agency's contention, the cited code and Manual sections require the Agency to inform employees of their level of performance at the mid-year performance reviews. The Union points to the statement in 5 C.F.R. § 430.205(e) that "employees shall be informed of their level of performance by comparison with the performance elements and standards established for their positions[,]" and argues that "[t]he regulation can not be any clearer. While documentation is not required unless performance is less than fully successful, the employee still has to be informed at all levels." Opposition at 2. Similarly, the Union states, "it is simply not possible to compare performance to the standards without telling the employee what level they [sic] are performing at and why their performance is at this level and not another." Id. at 3.
The Union also argues that the Arbitrator made sufficient findings to raise the grievant's rating to outstanding. While the Union concedes that the Arbitrator did not explicitly mention SSA II, it states that he did "make clear his findings of how he viewed the [g]rievant's performance." Id. The Union notes several references by the Arbitrator to testimony regarding the grievant's performance, including the grievant's claim "that she fulfilled her responsibility in this context exceedingly well." Id. at 4, quoting Award at 6. The Union also refers to the testimony of the grievant and two other witnesses that the grievant's work was outstanding under adverse conditions.
Finally, contrary to the Agency, the Union argues that if the Authority finds that the award is deficient, the proper remedy would be a remand to the Arbitrator, rather than the Agency, for a new rating. The Union distinguishes this case from SSA II "in that the issue was not the legitimacy of the performance standards, but the application of the standards to the [g]rievant." Opposition at 4. Because the Arbitrator had the performance standards before him, the Union contends that unlike SSA II, it is unnecessary to direct the Agency to determine a new performance plan and reevaluate the grievant.
IV. Analysis and Conclusions
We conclude that the Arbitrator's award is contrary to law and Authority precedent, specifically SSA I and SSA II and the cases that follow those decisions. We find that the Arbitrator has failed to satisfy the second prong of the test established in SSA I and described in SSA II.
In SSA II, we described the two-prong 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 found that the Agency had violated its regulation requiring it to inform the grievant of her level of performance at the mid-year progress review so that she could improve her performance to gain the level she had attained previously. The Arbitrator found, based on the record before him, that the grievant was not informed at the progress review that her performance at that point in the rating period in question would be rated lower than in the previous two rating periods, and that the failure to provide her with a clear delineation of what was expected of her with respect to the alleged deficiencies it later cited "flawed" her rating for the period in question. Award at 8. The Arbitrator also found that the regulation is "specifically designed to guarantee that an employee be informed specifically of his/her level of performance for rating purposes at least once during the appraisal period." Id. The Agency has not established that the regulation requires such communication only when an employee's performance falls below the Fully Successful level. Thus, the Agency has not demonstrated that the award is inconsistent with the regulation. Accordingly, the exception provides no basis for finding the award deficient. See U.S. Department of Health and Human Services, Administration for Children and Families and National Treasury Employees Union, NTEU Chapter 250, 46 FLRA 1107, 1111 (1993).
By finding that performance standards were applied in violation of the applicable Agency regulation, the Arbitrator met the first prong of the test described in SSA II. However, the Arbitrator did not affirmatively find that the Agency would have rated the grievant any differently if it had met its obligation to inform her that she would probably be rated at a lower level than in previous years. In this regard, we reject the Union's contention that the Arbitrator made sufficient findings to raise the grievant's rating to "Outstanding." In support of its contention, the Union references testimony by the grievant and two co-workers that her performance was outstanding and that she had done more work than previously, presumably during periods when she had received an "Outstanding" rating. The Union also relies on a statement by the Arbitrator that the grievant "naturally thought that her performance continued to be outstanding because she was working as hard as ever." Opposition at 4, quoting Award at 8. Contrary to the Union's position, these general statements of opinion by the grievant and her co-workers do not support a conclusion that the Arbitrator found that a different rating would have resulted if the Agency had informed the grievant of her perceived deficiencies. Rather, they merely reflect a difference of opinion between the Agency, on the one hand, and the grievant and two fellow workers, on the other hand, as to the quality of the grievant's performance.
Although notice of the Agency's view of her performance would have given the grievant an opportunity to improve, we find nothing in the Arbitrator's award to indicate that he determined, based on the record, what the grievant's rating would have been if the Agency had not violated the regulation. See U.S. Department of the Army, Headquarters, Army Garrison, Fort Ritchie, Maryland and National Federation of Federal Employees, Local 115, 43 FLRA 968 (1992) (Fort Ritchie); SSA II, 34 FLRA at 328. Compare U.S. Department of Veterans Affairs, Medical Center and American Federation of Government Employees, Local 1168, 41 FLRA 250 (1991) (arbitrator properly determined that grievants would have received higher performance ratings if the agency had not violated the parties' collective bargaining agreement by failing to conduct progress reviews and provide grievants copies of their performance standards) with U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 3448, 38 FLRA 1443 (1991) (arbitrator properly refused to order a higher performance rating based solely on the agency's violation of a collective bargaining agreement requirement to inform employees of declining performance).
We conclude, therefore, that the portion of the Arbitrator's award ordering the Agency to treat the grievant as if she had been rated "Outstanding" during the period in question is deficient because it is contrary to section 7106(a)(2)(A) and (B) of the Statute. See Fort Ritchie, 43 FLRA at 972. Pursuant to our consistent precedent, the award will be modified to require that the Agency reevaluate the grievant to determine what her rating would have been had the Agency complied with its regulation. Thus, we reject the Union's contention that the matter should be remanded to the Arbitrator rather than to the Agency.
The Arbitrator's award is modified to provide as follows:
The grievance is sustained. The Agency will reevaluate the grievant for the rating period April 1, 1990, to March 31, 1991, to determine the rating she would have received if the Agency had observed the requirement in its Manual to inform her during the October 1990 progress review regarding her level of performance compared with the elements and performance standards established for her position.
(If blank, the decision does not have footnotes.)
1. 5 C.F.R. § 430.205(e) provides:
(e) Progress review. A progress review shall be held for each employee at least once during the appraisal period. At a minimum, employees shall be informed of their level of performance by comparison with the performance elements and standards established for their positions.