[ v48 p979 ]
The decision of the Authority follows:
48 FLRA No. 108
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF DEFENSE
OFFICE OF DEPENDENTS SCHOOLS
OVERSEAS EDUCATION ASSOCIATION
November 30, 1993
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 James P. Whyte 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 determined that the grievant's living quarters allowance was erroneously terminated by the Agency. We conclude that the award is deficient, and we will set it aside.
II. Background and Arbitrator's Award
The grievant is a full-time, permanent teacher at the Agency's high school in Heidelberg, Germany. In 1983, the grievant had accompanied her husband, a U.S. Army officer, to Germany as his dependent. The grievant's husband received a living quarters allowance (LQA) as part of his military pay and was the grievant's sponsor. The grievant was hired locally by the Agency in 1983 as a substitute teacher. In 1988, she was appointed to her full-time, permanent teaching position.
In May 1991, the grievant's husband was ordered by the U.S. Army to return to Fort Dix, New Jersey, for purposes of his retirement from the military. After the departure of her husband from Germany, the grievant requested an LQA for herself and her child under the terms of applicable regulations.(*)
In June 1991, the Agency approved the grievant's request for an LQA in accordance with DoD Directive 1400.25-M, CPM 592, subchapter 2-2b(3)(d) because her spouse had left the area permanently. At the same time, the Agency informed the grievant that her LQA would be stopped if her spouse returned to the post or area. In October 1991, the grievant informed the Agency that her husband, who had retired from the military, had returned to the area to reside with her and that she would be his sponsor and he would be her dependent. The Agency advised the grievant that because her spouse had returned to the area, her LQA would be terminated effective on the date that he had returned to Germany. The grievant filed a grievance alleging that the termination of her LQA was improper. The grievance was not resolved and was submitted to arbitration on the issues of whether the grievance was timely filed and whether the Agency improperly terminated the grievant's LQA.
Before the Arbitrator, the Union argued that the grievance was timely filed and that the grievant was entitled to an LQA. As to her entitlement to an LQA, the Union asserted that after her husband's retirement from the military and his return to Germany, the grievant became the sponsoring spouse and was entitled to an LQA under the DoD Directive. The Union argued that by granting the grievant an LQA, the Agency had determined that all the requirements of the Directive had been met. The Union claimed that as the grievant's husband was no longer a sponsoring spouse because of his retirement when he returned to Germany, he could not be considered as having returned to his post or area and that, therefore, there was no basis on which to terminate the LQA that had already been properly granted to the grievant under the terms of the Directive. The Union further argued that the award of Arbitrator William Hobgood (Hobgood Award), which found that a similarly situated overseas teacher was entitled to an LQA, should be followed by the Arbitrator.
The Agency argued that the grievance was untimely and that the grievant's entitlement to an LQA was properly terminated under the terms of the Directive when the grievant's husband returned to Germany to reside with her. As to the grievant's entitlement to an LQA, the Agency asserted that the grievant's husband had not left the area permanently. The Agency maintained that he could have elected to retire in Germany and that if he had done so, the grievant would never have qualified for an LQA. The Agency asserted that the Directive waives the requirements for an LQA when a sponsoring spouse leaves the area permanently in order to prevent the dependent spouse from being abandoned overseas and that the waiver cannot apply in this case. The Agency also argued that the Hobgood Award was distinguishable and should not be followed.
The Arbitrator determined that the grievance had been timely filed and rejected the Agency's timeliness challenge.
On the merits of whether the grievant was entitled to an LQA, the Arbitrator determined that the Agency had improperly terminated the grievant's LQA. He found that there was no doubt that the grievant became entitled to an LQA when her husband left Germany and returned to the United States in order to retire from the military and concluded that her husband's return did not justify the termination of her LQA. He noted that DoD Directive 1400.25-M addresses "United States citizen employees" and "sponsoring spouse(s)." Award at 5 (quoting the Directive). He determined that when the grievant's husband retired from the military in the United States, he ceased to be an employee of the United States and lost his status as a sponsoring spouse. The Arbitrator found that the grievant retained her status as an employee of the United States and became the sponsoring spouse for members of her family. The Arbitrator further found that once the grievant's husband retired from the military, the concepts of "area" and "post" used in the Directive no longer applied. The Arbitrator emphasized that, as a civilian, the grievant's husband had no official station and had not been detailed by any United States agency, as an employee or otherwise, to live in Heidelberg or elsewhere in Germany. Moreover, the Arbitrator determined that there was no evidence to prove that the grievant's husband's retirement from the military in the United States and his subsequent return to Heidelberg was a ruse designed to secure an LQA for the grievant to which she was not entitled.
The Arbitrator also reviewed the Hobgood Award. He found that the facts of the two cases were very similar and that the reasoning and conclusions of Arbitrator Hobgood were compelling. The grievant in the Hobgood Award was also an overseas teacher, who had originally moved to Germany as a dependent of her husband, a U.S. Army officer, and who was locally hired by the Agency. When her husband returned to the United States to retire from the military, she was granted an LQA, and the LQA was terminated by the Agency when her husband returned to Germany to live with her after he had retired. Although the grievant had waived any challenge to the Agency's refusal to continue her LQA when her retired spouse returned to Germany, Arbitrator Hobgood stated in his award that the grievant's LQA was erroneously terminated when her husband returned because her husband was no longer a sponsoring spouse due to his retirement from the military and because her husband had no post or area to which to return due to his retirement.
The Arbitrator agreed with the Agency that arbitration awards are not precedential. However, he noted Article 12, Section 6G of the parties' collective bargaining agreement, which provides that an arbitrator's award will be binding on both parties unless an exception to the award is filed with the Authority. Because no exception had been filed to the Hobgood Award, the Arbitrator found that the award was "entitled to the utmost respect." Award at 6.
Accordingly, the Arbitrator sustained the grievance and ordered the grievant's LQA reinstated retroactive to September 21, 1991, with interest. In view of his award of an LQA, the Arbitrator also awarded the grievant a transportation agreement, which permits an employee who qualifies to obtain reimbursement for the expenses of traveling between the post and the employee's actual residence in the United States, and attorney fees, as requested by the Union. The Arbitrator remanded the case to the parties "for calculation and negotiation of such other relief." Id.
III. Positions of the Parties
A. The Agency
The Agency contends that the Arbitrator's determination that the grievant's LQA was improperly terminated is contrary to DoD Directive 1400.25-M.
The Agency asserts that in deciding whether the Arbitrator misinterpreted the Directive, the Authority must give words their common meaning unless a special meaning is specified. The Agency maintains that the word "permanent" does not have a special meaning and must therefore be given its common meaning of "fixed, lasting, not subject to change." Exception at 5 (citation omitted). Thus, the Agency argues that for the grievant to have been entitled to an LQA, her husband must have left the area permanently. The Agency further argues that when the condition under which the LQA was authorized ceases to exist, the eligibility ceases to exist. The Agency notes that the Directive directly addresses this situation for LQAs authorized as a result of a sponsoring spouse leaving the area by providing that should the spouse return to the former post or area, the LQA will be terminated. The Agency concedes that the Directive does not expressly state "former post or area," but the Agency claims that "the regulation's intent is clear and unambiguous on its face." Id. at 5, 6.
The Agency also asserts that regulations must be read in their entirety to understand their full meaning. In this case, the Agency claims that the only correct interpretation of the Directive is that an LQA must stop when the spouse returns. The Agency asserts that the erroneous interpretation of the Directive by Arbitrator Hobgood cannot justify the Arbitrator's "mindless" adoption of that interpretation. Id. at 6. The Agency argues that both awards mistakenly centered their decisions on the definitions of "post" and "area" when the dispositive question was whether the spouse's departure was permanent. In the Agency's view, the spouse's return after an absence of approximately 2 months defeats any argument that the departure was permanent. The Agency alleges that the only reason the grievant's husband in this case elected to return to the United States was to circumvent the provisions of the Directive. The Agency maintains that had he elected to retire from the military in Germany, the grievant would not have qualified under the Directive for an LQA. The Agency further maintains that the grievant's LQA was authorized because she claimed that her husband had left the area permanently.
The Agency also claims that the Arbitrator's analysis of the terms "post" and "area" was flawed. The Agency argues that the Arbitrator's conclusion that the grievant's husband had no post or area to which he could return and thus had left permanently is inconsistent with the full context of the Directive. Although the Agency recognizes that it can be argued that the Directive is unartfully worded, the Agency asserts that the clear purpose and intent of the Directive is to deny an LQA when the spouse returns. The Agency contends that the grievant's LQA was properly terminated when her husband returned to Germany and that, therefore, the award is deficient.
B. The Union
The Union contends that the Agency's exception constitutes nothing more than disagreement with the Arbitrator's interpretation of DoD Directive 1400.25-M. The Union maintains that the Agency's exception provides no basis for finding the Arbitrator's interpretation deficient.
The Union asserts that the term "sponsoring spouse" as used in the Directive describes the status of an employee of the Federal Government and that, therefore, the Arbitrator correctly concluded that the grievant's husband had lost his status as a sponsoring spouse after his retirement. The Union claims that, accordingly, the Arbitrator correctly ruled that the grievant's husband could not return to the area as a sponsor and that, consequently, the grievant's LQA was improperly terminated. The Union also asserts that the term "post" is defined in the DSSRs as an official duty station and that, therefore, the Arbitrator correctly concluded that after his retirement, the grievant's husband had no official duty station. The Union claims that, accordingly, the Arbitrator correctly ruled that the departure of the grievant's husband from his post followed by his retirement constituted a permanent departure for which the grievant was entitled to an LQA.
The Union disputes that the common meaning of the term "permanent" supports the Agency's position that the grievant's LQA was properly terminated when her husband returned to Germany. The Union argues that the Agency's position ignores the terms "sponsoring spouse" and "post" on which this Arbitrator and Arbitrator Hobgood relied in determining that the returns of spouses recently retired from the military did not justify termination of LQAs under the Directive. The Union also argues that the Agency undermines its own position by arguing that the Directive really refers to former post although the word "former" does not appear in the Directive. The Union also disputes the Agency's repetition of its argument that the return of the grievant's husband to the United States was a ruse to permit the grievant to receive an LQA to which she was not entitled. The Union notes that the Arbitrator expressly rejected this argument at arbitration by finding no evidence to support such a claim.
The Union further disputes that the Arbitrator "mindlessly" adopted the reasoning and conclusions of the Hobgood Award. Opposition at 7 (quoting Agency's Exception at 6). The Union maintains that the Arbitrator's decision did not rest solely on the Hobgood Award. However, the Union asserts that because the Agency did not appeal the Hobgood Award, the Arbitrator appropriately determined that under the parties' collective bargaining agreement, the Hobgood Award was "entitled to the utmost respect." Id. at 8 (quoting Award at 6).
IV. Analysis and Conclusions
Section 7122(a)(1) of the Statute pertinently provides that an arbitration award will be found deficient if it conflicts with any rule or regulation. Under this provision, an award that conflicts with an enforceable Government-wide rule or regulation is deficent. U.S. Department of Defense Dependents Schools and Overseas Federation of Teachers, 41 FLRA 1362, 1364 (1991) (citing U.S. Department of the Army, Fort Campell District, Third Region, Fort Campbell, Kentucky and American Federation of Government Employees, Local 2022, 37 FLRA 186 (1990) (Ft. Campbell)). In addition, an arbitration award that conflicts with an agency rule or regulation is deficient if the agency rule or regulation governs the matter in dispute. An agency rule or regulation governs the matter in dispute when no provisions of a collective bargaining agreement address the matter in dispute. Id. (citing Ft. Campbell, 37 FLRA at 194). This case involves both enforceable Government-wide regulations, the DSSRs, and a governing Agency regulation, DoD Directive 1400.25-M. We find that the Directive is a governing regulation because there is no basis on which to conclude that the parties' collective bargaining agreement addresses the grievant's entitlement to an LQA. See id. at 1365.
We conclude that the award is deficient because it is contrary to DoD Directive 1400.25-M and the DSSRs. In reaching this conclusion, we have been persuaded by the provisions of the Directive and the DSSRs, the intent of the statutes that the DSSRs and the Directive implement, and court decisions addressing those statutes, the DSSRs, and the Directive.
As the U.S. Court of Claims and U.S. Claims Court recognized in Acker v. United States, 620 F.2d 802 (Ct. Cl. 1980) (Acker I), and Acker v. United States, 6 Cl. Ct. 503 (1984) (Acker II), and we relied on in our extensive discussion of LQAs for overseas teachers in U.S. Department of Defense, Office of Dependents Schools and Overseas Education Association, 40 FLRA 425 (1991) (OEA), the Overseas Teachers Pay and Personnel Practices Act, Pub. L. No. 86-91, 73 Stat. 213 (1959) (codified at 20 U.S.C. §§ 901-907) and the Overseas Differentials and Allowances Act, Pub. L. No. 86-707, 74 Stat. 792 (1960), grant overseas teachers the right to LQAs. However, consistent with these statutes and their implementing regulations, the Agency has historically distinguished between "local hires," i.e., employees hired overseas, and "stateside hires," i.e., employees recruited and hired from the United States. OEA, 40 FLRA at 426-27. As explained by the court in Acker I, the goal of the Overseas Differential and Allowances Act was to compensate civilian employees for extra costs and hardships that they encountered due to their assignment abroad. 620 F.2d at 806. The court noted that teachers hired overseas voluntarily encountered any hardships and extra costs incident to their employment and are unlike stateside hires who must be enticed overseas and compensated for their assignments to foreign posts. Id. Thus, section 031.1 of the DSSRs distinguishes between employees recruited in the United States and employees recruited outside the United States with respect to the conditions under which they are eligible for an LQA.
Employees recruited in the United States are generally eligible for an LQA. DSSR section 031.11. Employees recruited outside the United States are eligible for an LQA only if certain conditions are met. DSSR section 031.12. Essentially, their residence overseas must be fairly attributable to their employment with the Federal Government and prior to their employment they must have been recruited in the United States or other specified areas. The condition of having been recruited in the United States may be waived by the head of an agency when unusual circumstances justify such an action. DSSR section 031.12b. As relevant to this case, DoD Directive 1400.25-M, CPM 592, subchapter 2-2b(3) requires waiver of the requirement of recruitment in the United States when the sponsoring spouse has left the post or area permanently.
The Arbitrator found that the grievant's spouse had left the area permanently within the meaning of the Directive, notwithstanding his return to Germany to live with the grievant. We disagree. We find that the Arbitrator's interpretation and application of the Directive is inconsistent with the Directive and the DSSRs, which deny local hires an LQA unless there are unusual or exceptional circumstances.
As found by the court in Acker II, the exceptions set forth in subchapter 2-2b are intended to be "compassionate" in dealing with unusual circumstances, including those in which the sponsoring spouse has permanently left the area. 6 Cl. Ct. at 509. The court explained that the policy is one in which the local hire is granted an LQA "to make up for the benefits lost through circumstances beyond his or her control." Id. In our view, the Arbitrator's award impermissibly expands the exception by finding the grievant eligible for an LQA, even though her husband returned to Germany. We find particularly persuasive in this respect the court's discussion in Acker II of the claims of overseas teachers who were married to military or civilian employees of the Federal Government.
In Acker II, the spouses of these teachers had once received LQAs, but they had retired from government service and no longer received them. The teachers claimed that they should receive these benefits in their own right, notwithstanding that, as local hires, they were not eligible for LQAs. Notwithstanding the teachers' position that this situation was no different from the situations addressed in the exceptions of subchapter 2-2b, the court found a "significant difference between the exceptions permitted and the one [teachers] seek." Id. at 511. The court explained that the "exceptions to the point of hire criterion in [the Directive] attempt to ameliorate the harsh consequences of the removal of a spouse beyond the control of the locally hired employee." Id. In contrast, the court found that "when a spouse retires and the couple voluntarily decides to remain abroad, the event is not uncontrollable." Id. The court ruled that "[t]hey have merely chosen a particular lifestyle which it is not unreasonable for the government to decline to subsidize." Id.
We conclude that the circumstances in this case were similarly not uncontrollable and that, therefore, the Arbitrator's application of the Directive and the DSSRs is inconsistent with the Directive and the DSSRs, as interpreted and applied by the courts. Accordingly, we will modify the award to strike the Arbitrator's determinination that the grievant's LQA was erroneously terminated as of September 21, 1991, and the Arbitrator's order that the grievant's LQA be retroactively reinstated with interest.
In finding this portion of the award deficient because it is inconsistent with the Directive and the DSSRs, we conclude that the Arbitrator's reliance on the Hobgood Award provides no basis for denying the Agency's exception. Although the Arbitrator cited the parties' collective bargaining agreement in granting the Hobgood Award the "utmost respect[,]" the Arbitrator did not rule that the Hobgood Award was res judicata and that, therefore, he was required to reach the same conclusion in this case. Award at 6. Furthermore, Arbitrator Hobgood was commenting on an issue that was not in dispute between the parties. Thus, for the reasons stated, we find that the Arbitrator's determination that the grievant was entitled to an LQA is deficient, and we will set it aside.
We will also set side the award of a transportation agreement and attorney fees. Because the Arbitrator's award of a transportation agreement was directly linked to his granting of an LQA and because the restrictions on local hires receiving transportation agreements are similar to the restrictions on LQAs, see Acker II, 6 Cl. Ct. at 506-09; OEA, 40 FLRA at 435-38, we find that the award of a transportation agreement is deficient and must be vacated. In addition, with the award of backpay found deficient and set aside, and apart from other considerations, we find that the Arbitrator's award of attorney fees is deficient and must also be set aside. See Veterans Administration, Winston-Salem, N.C. and American Federation of Government Employees, Local 2880, 27 FLRA 44, 46 (1987); U.S. Army Missile Command, Redstone Arsenal, Alabama and Local 1858, American Federation of Government Employees, AFL-CIO, 18 FLRA 374, 376 & n.2 (1985).
The award is set aside in its entirety.
Section 031 of the DSSRs provides in pertinent part:
031 United States Citizen Employees
031.1 Quarters Allowances
031.11 Employees Recruited in the United States
Quarters allowances prescribed in Chapter 100 may be granted to employees who were recruited by the employing government agency in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, and the possessions of the United States. . . .
031.12 Employees Recruited Outside the United States
Quarters allowances prescribed in Chapter 100 may be granted to employees recruited outside the United States, provided that:
a. the employee's actual place of residence in the place to which the quarters allowance applies at the time of receipt thereof shall be fairly attributable to his/her employment by the United States Government; and
b. prior to appointment, the employee was recruited in the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States, by:
(1) the United States Government, including its Armed Forces;
(2) a United States firm, organization, or interest;
(3) an international organization in which the United States Government participates; or
(4) a foreign government
and had been in substantially continuous employment by such employer under conditions which provided for his/her return transportation to the United States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the former Canal Zone, or a possession of the United States; or
. . . .
Subsection 031.12b may be waived by the head of [an] agency upon determination that unusual circumstances in an individual case justify such action.
Section 040 of the DSSRs defines "post" as "the place designated as the official station of the employee."
DoD Directive 1400.25-M, CPM 592, subchapter 2-2b(3) requires that DSSR section 0131.12b be waived
when, but for the condition surrounding the employment, the employee would be residing in the United States . . . . One of the following events must have occurred for this waiver:
. . . .
(d) Sponsoring spouse left the post or area permanently.
. . . .
In addition, in situations (a) through (e), the employee must have entered the area as the spouse of a sponsor who was eligible for the quarters allowance, or who would have been eligible if employed by the government and the employee's reasons for being in the area continuously from the time of arrival must have been fairly attributable to the sponsor's circumstances that meet the conditions specified in section 031.11 or 031.12b, DSSR. In situations (c), (d), or (e), the LQA will be stopped should . . . the spouse return to his/her post or area. Area is defined as geographical locality (See glossary of terms, appendix D, JTR, Vol 2).
(If blank, the decision does not have footnotes.)
*/ Relevant provisions of applicable regulations, Department of State Standardized Regulations (DSSRs) and DoD Directive 1400.25-M, CPM 592, are set forth in the Appendix to this decision.