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The decision of the Authority follows:
51 FLRA No. 62
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
SOCIAL SECURITY ADMINISTRATION
KANSAS CITY, MISSOURI(1)
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
January 11, 1996
Before the Authority: Phyllis N. Segal, Chair; and Tony Armendariz, Member.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator John P. DiFalco 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 Regulations. The Union filed an opposition to the Agency's exceptions.
The Arbitrator ordered the Agency to cancel the grievant's disputed performance appraisal and to substitute for it the grievant's appraisal from the previous year. The Arbitrator also ordered the Agency to grant the grievant a performance award.
We conclude that the award is deficient because it is contrary to the Statute and fails to draw its essence from the parties' collective bargaining agreement, and we modify the award accordingly.
II. Arbitrator's Award
For the appraisal period July 7, 1992, through November 7, 1992, the grievant received an overall rating of "excellent," but did not receive a performance award. The grievant filed two grievances over: (1) the failure to receive a rating of "outstanding" on two job elements; and (2) the failure to receive a performance award.
The Union invoked arbitration "on the appraisal grievance of [the grievant]" under the expedited arbitration procedures of Article 25 of the parties' collective bargaining agreement. Union letter of April 1, 1993. Prior to the arbitration hearing, the Agency filed a motion with the Arbitrator objecting to the Union's intent to present the grievance over the grievant's failure to receive a performance award. The Agency argued that the Union had never invoked arbitration on the performance award grievance and that any attempt to do so would be untimely. The Agency also argued that expedited arbitration is available only for those matters listed in Article 25, Section 7 of the collective bargaining agreement(2) and that the failure to receive a performance award is not one of the matters listed. Although the Agency acknowledged that a grievance over any other matter mutually agreed upon could be expedited, the Agency stated to the Arbitrator that it "ha[d] not and d[id] not agree to add the 'No Award' grievance to this proceeding." Agency's Motion to the Arbitrator.
The Arbitrator found that the Agency violated the collective bargaining agreement in conducting the grievant's 1992 appraisal by failing to provide the grievant with a progress review as required by the agreement. As a remedy, the Arbitrator canceled the disputed appraisal. Finding that the failure to provide a progress review could not be corrected, he further ordered the Agency to substitute the grievant's more favorable 1991 appraisal for his 1992 appraisal.
The Arbitrator also found that the Agency had treated the grievant disparately and in violation of the collective bargaining agreement in failing to grant the grievant a performance award. Accordingly, the Arbitrator ordered the Agency to grant the grievant the same performance award as that granted a comparable employee. In so doing, the Arbitrator acknowledged the Agency's claim that the arbitration was limited to the appraisal grievance. However, he ruled that the Agency had "commingled" the two grievances and that both were properly before him. Award at 9. He found that performance appraisals and performance awards are "inexorably linked" and that the Agency had responded to them in a single Step 3 decision under the grievance procedure. Id. The Arbitrator determined that the Union should not now be penalized when the grievant, the Union, and the Agency all viewed the closely related issues to have merged. In the Arbitrator's view, it is "fundamentally unfair when an Agency takes two grievances, unilaterally combines them into one, provides notice of appeal to Arbitration in that one decision and then at Arbitration, for the first time, claims that one of the two grievances was not properly before the Arbitrator." Id.
A. Performance Appraisal
1. Agency's Contentions
The Agency does not contest the Arbitrator's cancellation of the grievant's appraisal, but contends that the Arbitrator's substitution of the grievant's appraisal from the previous year is contrary to law because the Arbitrator failed to meet the second prong of the two-prong test established in 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 (1990) (SSA II). The Agency also contends that the award is contrary to 5 C.F.R. § 430.206(b)(3) because the prior appraisal covers the grievant's work in a different position.
2. Union's Opposition
The Union contends that the award satisfies the requirements of SSA I and II because the Arbitrator fully assessed the grievant's performance for the disputed appraisal period.
B. Performance Award
1. Agency's Contentions
The Agency contends that because it never agreed to add the performance award grievance to the expedited arbitration of the appraisal grievance and because the failure to receive a performance award is not otherwise subject to expedited arbitration, the Arbitrator exceeded his authority by resolving that grievance. The Agency also contends that the assertion of jurisdiction fails to draw its essence from the agreement because the Arbitrator ignored the clear and unambiguous language of Article 25, Section 7 as to what matters are subject to expedited arbitration. The Agency further contends that the Arbitrator's conclusion that it contested arbitration too late is based on a nonfact because it objected to the addition of the performance award issue as soon as it became aware of the Union's position. In sum, the Agency maintains that the award is deficient because the Arbitrator asserted jurisdiction over a matter that it had not agreed to submit to expedited arbitration.(4) The Agency also argues that the Union never invoked arbitration on the performance award grievance at all and that the time for doing so has expired.
In addition, the Agency contends that the Arbitrator's order granting the grievant a performance award is contrary to the Back Pay Act, 5 U.S.C. § 5596, and disregards the discretion of supervisors to decide not to grant a performance award. The Agency also asserts that the Arbitrator denied it a fair hearing.
2. Union's Opposition
The Union contends that the Arbitrator properly asserted jurisdiction over the performance award grievance because the two grievances were linked. The Union further contends that the Arbitrator conducted a fair hearing and that the Arbitrator's grant of a performance award is supported by the Agency's disparate treatment of the grievant.
IV. Analysis and Conclusions
A. Performance Appraisal Portion of the Award Is Deficient Because It Is Not Based on a Reconstruction
Under SSA I and II, an arbitrator must base a remedy substituting a performance appraisal for that of management on a reconstruction of what the grievant's rating would have been had the agency properly applied the established performance standards. U.S. Department of the Air Force, Ogden Air Logistics Center, Hill Air Force Base, Utah and American Federation of Government Employees, Local 1592, 51 FLRA 379, 382 (1995). In this case, the Arbitrator substituted the grievant's prior appraisal without making such a determination. Therefore, the remedy is not based on a reconstruction and is deficient as contrary to section 7106(a)(2)(A) and (B) of the Statute. U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 35 FLRA 237, 240 (1990).
When an arbitrator has properly canceled a performance appraisal, but has failed to base a substituted rating on a reconstruction of what the grievant's rating would have been if the agency had properly appraised the grievant, we order management to properly reappraise the grievant. Id. Because the Agency does not contest the cancellation of the grievant's disputed appraisal, we modify the award to require the Agency to properly reevaluate the grievant in accordance with the collective bargaining agreement.
B. Performance Award Portion of the Award Is Deficient Because It Fails to Draw Its Essence From the Collective Bargaining Agreement
To demonstrate that an award fails to draw its essence from the agreement, the appealing party must show that the arbitration award is: (1) so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; or (2) does not represent a plausible interpretation of the agreement; or (3) cannot in any rational way be derived from the agreement; or (4) evidences a manifest disregard of the agreement. E.g., United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 575-76 (1990).
Article 25, Section 7 of the parties' agreement lists the matters subject to expedited arbitration. Pursuant to that provision, an arbitrator could not assert jurisdiction over a performance award grievance unless submission to expedited arbitration was "mutually agreed upon." There is no evidence of agreement, express or implied, by the Agency to submit the award grievance to expedited arbitration and the Arbitrator's award does not support a finding of agreement by the Agency.
The record establishes that the Agency opposed expedited arbitration of the performance award grievance when it became aware that the Union intended to present it to arbitration with the appraisal grievance. In addition, the award indicates no actions by the Agency before that objection constituting agreement or acquiescence to its addition. The Arbitrator explained his assertion of jurisdiction in terms of unfairness and the commingling and linkage of the two grievances, and the Union contends that these findings support the award. In view of the specified jurisdictional limitations set forth in Article 25, Section 7, unfairness is not a supportable basis for asserting jurisdiction. Likewise, linkage of the two grievances cannot support a finding of mutual agreement in the absence of evidence that the parties agreed to resolve the linked grievances in expedited, rather than regular, arbitration. There is no such evidence in the record.
Accordingly, we find that the Arbitrator's assertion of jurisdiction over the performance award grievance is deficient because it fails to draw its essence from the collective bargaining agreement.(5) See American Federation of Government Employees, Local 547 and Tampa Veterans Administration Hospital, 19 FLRA 725, 727 (1985) (award deficient because arbitrator addressed the agency's denial of an incentive award and ordered the grant of an award even though the collective bargaining agreement specifically excluded decisions on incentive awards from coverage of the negotiated grievance procedure); see also U.S. Department of the Air Force, Oklahoma City Air Logistics Command, Tinker Air Force Base, Oklahoma and American Federation of Government Employees, Local 916, 48 FLRA 342, 348 (1993) (award deficient because arbitrator's interpretation of agreement was incompatible with its plain wording); U.S. Department of the Air Force, Hill Air Force Base, Utah and American Federation of Government Employees, Local 1592, 39 FLRA 103, 108 (1991) (award deficient because arbitrator's reliance on collective bargaining agreement could not in any rational way be derived from that agreement and manifestly disregarded its terms).
Although the Agency contends that arbitration was never invoked on the performance award grievance, it does not contend that grievances over performance awards are excluded from regular arbitration. Accordingly, we remand the matter of the performance award grievance to the parties for submission to regular arbitration, at the Union's request.(6) Cf. U.S. Department of the Air Force, Air Force Logistics Command, Oklahoma City Air Logistics Center, Tinker Air Force Base, Oklahoma and American Federation of Government Employees, Local 916, 37 FLRA 1049 (1990) (exceptions denied to award in which a regular arbitrator determined that he lacked jurisdiction to decide the case because it was subject to expedited arbitration and remanded the case to expedited arbitration).
The Arbitrator's award is modified, as follows:
(1) The portion of the Arbitrator's award pertaining to the disputed performance appraisal is modified by striking the Arbitrator's substitution of the grievant's appraisal from the previous year and substituting for it an order that the Agency reevaluate the grievant's work product or performance for the appraisal period in dispute to determine the appraisal the grievant would have received if the grievant had been appraised as required by the collective bargaining agreement.
(2) The portion of the Arbitrator's award pertaining to the disputed performance award is modified by striking the Arbitrator's order granting the grievant a performance award and substituting for it an order remanding the matter of the performance award to regular arbitration at the Union's request.
(If blank, the decision does not have footnotes.)
1. During the pendency of this case, the Social Security Administration, previously an agency within the U.S. Department of Health and Human Services, was established as an independent agency.
2. Article 25, Section 7 lists the following matters:
-- An employee's formal performance appraisal, other than demotions or removals for unacceptable performance under 5 U.S.C. Chapter 43;
-- Final decision to withhold a within-grade salary increase;
-- Reprimands and suspensions of 14 days or less;
-- Action imposing sick leave restriction;
-- Denials of sick leave, annual leave, and LWOP;
-- AWOL charges; and
-- Any other matter mutually agreed upon.
3. During the pendency of this case, the Office of Personnel Management changed its regulations on performance management systems, including 5 C.F.R. § 430.206(b). 60 Fed. Reg. 43936, 43944 (Aug. 23, 1995). Because we find this portion of the award deficient as contrary to the Statute, we need not address the effect of the changes or whether the award conflicts with section 430.206(b).
4. In making the same argument to the Arbitrator, the Agency cited AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643 (1986) (AT&T).
5. In applying a deferential standard of review to the Arbitrator's determination that the matter of the performance award was substantively arbitrable, we recognize that in the private sector, under AT&T and subsequent decisions based on AT&T, Federal courts review substantive arbitrability determinations by arbitrators de novo, unless the parties have waived the right to a judicial determination independent of the arbitrator's determination. See, e.g., Beach Air Conditioning and Heating, Inc. v. Sheet Metal Workers International Association, Local Union No. 102, 55 F.3d 474 (9th Cir. 1995); Alberici-Eby v. Local 520, International Union of Operating Engineers, 992 F.2d 727 (7th Cir. 1993); cf. First Options of Chicago, Inc. v. Kaplan, 115 S. Ct. 1920 (1995) (commercial arbitration). We find it unnecessary to resolve here whether, following AT&T and its progeny, the Authority should undertake de novo review of an arbitrator's determination of substantive arbitrability under a collective bargaining agreement. For the reasons set forth above, the Arbitrator's award in this case is deficient under either de novo or deferential review.
6. In view of our decision in this case, we need not resolve the Agency's other exceptions to the portion of the arbitration award pertaining to the performance award. Nothing in our remand prevents the Agency from raising these arguments in a subsequent arbitration proceeding.