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The decision of the Authority follows:
52 FLRA No. 9
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF THE ARMY
HEADQUARTERS, U.S. ARMY AVIATION CENTER
FORT RUCKER, ALABAMA
WIREGRASS METAL TRADES COUNCIL
August 26, 1996
Before the Authority: Phyllis N. Segal, Chair; Tony Armendariz and Donald S. Wasserman, Members.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator James E. Fulford 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 exceptions.
The Arbitrator sustained a grievance over the Agency's refusal to give the grievant a performance-related cash award.
For the following reasons, we conclude that the award is contrary to a Government-wide regulation and, therefore, is deficient under section 7122(a) of the Statute. Accordingly, we set aside the award.
II. Background and Arbitrator's Award
The Union filed a grievance after the Agency refused to give the grievant a performance-related cash award. The Agency had notified the grievant that he would not receive a cash award because the Superior Performance Award Program for the fiscal year had been terminated due to the unavailability of funds. The parties stipulated that the Arbitrator decide the following issue: "Did the Center violate the Labor Agreement when it failed to give the [g]rievant a cash award? If so, what shall the remedy be?" Award at 1.
The Arbitrator found, based upon the evidence presented, that Agency employees "who receive exceptional ratings usually get monetary awards to go along with the rating." Id. at 2. In light of this finding, the Arbitrator concluded that the Agency had established a past practice that amounted to a promise to give employees who receive exceptional ratings a cash award. Noting the absence of an express collective bargaining agreement provision addressing performance award criteria, the Arbitrator determined that the grievant was entitled to a cash award based on the Agency's past practice. As his award, the Arbitrator stated in relevant part: "If no money is available to pay a cash award during the present fiscal year, the amount of money promised to the [g]rievant by his immediate supervisor, will be taken from next year's incentive award funding and paid to the [g]rievant." Id. at 4.
A. Agency's Contentions
The Agency argues that the award is contrary to 5 C.F.R. § 430.504(d).(1) In this connection, the Agency states that compliance with the award's mandate that it pay the grievant a cash award from either the present or next fiscal year's budget is contrary to the regulatory requirement that performance awards be approved or disapproved by a higher level authority. The Agency distinguishes two Authority decisions, U.S. Department of the Air Force, Ogden Air Logistics Center, Hill Air Force Base, Utah and American Federation of Government Employees, Local 1592, 46 FLRA 1297 (1993) (Hill Air Force Base) and U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 46 FLRA 1126 (1993) (SSA), wherein the Authority upheld arbitrators' awards granting performance awards as a remedy to enforce bargaining agreement provisions which mandate that certain monetary awards be given based upon the receipt of a certain level of performance appraisal.
In response to an Authority Order requesting that the Agency submit comments concerning the Office of Personnel Management's (OPM) interpretation of 5 C.F.R. § 430.504(d) the Agency states that: (1) OPM's advisory opinion supports the Agency's exception, and (2) application of 5 C.F.R. § 430.504(d), not its replacement, 5 C.F.R. § 451.103(c) (1996), is appropriate in this case.(2)
B. Union's Opposition
The Union states that in awarding an incentive award to the grievant to be paid from next year's funds the Arbitrator followed past Agency practice. The Union did not respond to the Agency's contention that the award is inconsistent with 5 C.F.R. § 430.504(d). The Union also did not respond to the Authority's Order requesting its views on OPM's advisory opinion concerning 5 C.F.R. § 430.504(d).
IV. Analysis and Conclusion
As the Agency's exception that the award is contrary to 5 C.F.R. § 430.504(d) involves the award's consistency with law, we must review the questions of law raised by the Arbitrator's award and the Agency's exception de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). An arbitration award is deficient under section 7122(a) of the Statute if it is contrary to law, rule or regulation. For the following reasons, we find that the award is contrary to 5 C.F.R. 430.504(d).(3)
Because 5 C.F.R. § 430.504(d) is a Government-wide regulation that was promulgated by OPM, it is proper to consider OPM's advisory opinion in this case. See 5 U.S.C. § 7105(i); National Association of Agriculture Employees and U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Plant Protection and Quarantine, 51 FLRA 843, 844-45 (1996) (Department of Agriculture) (Authority sought OPM advisory opinion concerning interpretation of 5 C.F.R. § 610.121), petition for review filed as to other matters, No. 96-1106 (D.C. Cir. Apr. 4, 1996). In this regard, OPM advises that the plain language of the regulation requires review and approval of each individual performance award. In OPM's view, it would be contrary to the regulation for an agency to take action, on its own or through collective bargaining, that would not allow for the required management review and approval of each award. Further, OPM states that the regulation does not permit the imposition upon an agency of a mandatory performance awards plan. According to OPM, to do so would render the decision of whether to grant an award purely ministerial, thereby restricting the discretion of an agency manager.
With regard to an agency's discretion, OPM states that the regulation is intended to vest agency reviewing officials with wide discretion to approve or disapprove both the decision to grant performance awards and the amount of any such awards. Consistent with this intent, the grounds upon which an award may be disapproved are not specified in the regulation. In this connection, OPM suggests that budget considerations and the appropriate distribution of awards throughout an agency are legitimate considerations for reviewing officials in determining whether to grant performance awards.
OPM's "interpretation of its own regulation is controlling unless it is 'plainly erroneous or inconsistent' with the language of the regulation." Department of Agriculture, 51 FLRA at 849 (quoting FLRA v. U.S. Department of the Treasury, Financial Management Service, 884 F.2d 1446, 1454 (D.C. Cir. 1989), cert. denied, 493 U.S. 1055 (1990)). Because OPM's advisory opinion is consistent with the plain wording of the regulation, we accord it deference and conclude that the award is inconsistent with section 430.504(d). Specifically, assuming, without deciding, that there was an established past practice or promise in this case, the Arbitrator's award enforcing that past practice or promise deprived the Agency of its discretion under 5 C.F.R. § 430.504(d) to approve or disapprove the cash award required by the Arbitrator. Accordingly, we conclude that the Arbitrator's award is deficient.(4)
The award is set aside.
(If blank, the decision does not have footnotes.)
1. Section 430.504(d) provides:
The decision to grant a performance award, including the amount of such award, shall be reviewed and approved by an official of the agency who is at a higher level than the official who made the initial decision, unless there is no official at a higher level in the agency.
2. OPM had provided this interpretation in response to the Authority's request, pursuant to 5 U.S.C. § 7105(i), in National Treasury Employees Union and U.S. Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms, Washington, D.C., Case No. 0-NG-1820 (on remand from the D.C. Circuit in National Treasury Employees Union v. FLRA, 30 F.3d 1510, 1517 (D.C. Cir. 1994)). Subsequent to the Authority's request, the case was withdrawn.
3. We need not address the Agency's contention that even if the Authority were to apply 5 C.F.R. § 451.103(c) (1996), the regulation that replaced 5 C.F.R. § 430.504(d), in this case, the award must be set aside. We apply 5 C.F.R. § 430.504(d), rather than the revised version of the regulation, because it was in existence at the time of the actions giving rise to the grievance and the Agency's rights would be impaired if we were to apply the revised regulation retroactively. See U.S. Department of Transportation, Federal Aviation Administration, Little Rock, Arkansas, 51 FLRA 216 (1995) (discussing Landgraf v. USI Film Products, U.S. , 114 S. Ct. 1483, 1501-05 (1994)).
4. In view of our decision that the award is inconsistent with 5 C.F.R. § 430.504(d), it is unnecessary to address the Agency's remaining exception that the award is based on a nonfact.
In addition, we note that the facts and circumstances in this case are distinguishable from those in U.S. Department of Health and Human Services, Social Security Administration, Area II, New York Region and American Federation of Government Employees, 48 FLRA 370 (1993) (SSA, Region II), Hill Air Force Base, and SSA, cases in which the Authority found that 5 C.F.R. § 430.504(d) did not present an impediment to upholding arbitrators' awards of performance-related cash awards. As such, we leave reexamination of the Authority's holdings in SSA, Region II, Hill Air Force Base, and SSA for a case that presents the same facts as presented in those cases.