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The decision of the Authority follows:
52 FLRA No. 37
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF VETERANS AFFAIRS
NORTH CHICAGO, ILLINOIS
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
October 2, 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 two awards of Arbitrator Howard Eglit 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 oppositions to the Agency's exceptions.
The Arbitrator ordered that the Agency grant performance awards to the grievants and, in a supplemental award, granted attorney fees to the Union in the amount of $7,522.50.
We conclude that the Agency has failed to establish that either the ordered performance awards or the grant of attorney fees is deficient under section 7122(a) of the Statute. Accordingly, we deny the Agency's exceptions.
II. Background and Arbitrator's Awards
For the 1991-1992 performance appraisal period, the Agency implemented a policy of denying cash performance awards to employees who had been rated "outstanding" if they were promoted during the appraisal period. The Union filed an unfair labor practice (ULP) charge and the Authority's General Counsel issued a complaint alleging that the Agency violated section 7116(a)(1) and (5) of the Statute by implementing the policy without providing the Union with notice and an opportunity to bargain over the impact and implementation of the change in conditions of employment. The parties entered into a settlement agreement approved by the Authority's regional director in which the Agency agreed to reconsider all unit employees who were denied a cash performance award because they had been promoted during the appraisal period even though they were rated "outstanding." On reconsideration, the Agency determined not to grant the employees cash performance awards because the performance award budget for 1991-1992 had been exhausted.
The Union filed a grievance requesting that the 18 employees who had been denied cash performance awards be granted awards in a fair and equitable manner in accordance with Article 32, Section 6(C) of the parties' collective bargaining agreement dated August 1982.(2)
Prior to arbitration, the Agency offered to settle the grievance by granting the grievants the cash award that they would have otherwise received. The Union rejected the settlement. Thereafter, the Agency filed a prehearing motion for judgment on the pleadings. The Agency contended that the grievance should be dismissed as moot because the Agency had offered the grievants full relief as a settlement of the grievance and that 5 C.F.R. § 430.504(e) precluded appeals from the denial of performance awards. The Union objected to the motion, claiming that it needed to know the amount offered to each grievant and the amount of the awards granted to other employees. The Arbitrator ruled that the grievance was not moot because the Agency had refused to disclose to the Union what the settlement offer entailed on the basis that the information was confidential. He also ruled that the grievance was not precluded by 5 C.F.R. § 430.504(e). The Agency then notified the Arbitrator that it had withdrawn the offer of settlement.
The Agency filed another prehearing motion to dismiss the grievance, claiming that the grievance was barred by the earlier-filed ULP. In opposition, the Union argued that the issues were not the same because the ULP claimed a failure to bargain while the grievance claimed a violation of the fair and equitable requirement of Article 32, Section 6(C) of the collective bargaining agreement. The Agency asserted that the actions were not distinguishable because a 1987 amendment to the collective bargaining agreement had deleted Article 32, Section 6(C) and that there was no longer any contractual requirement that performance awards be distributed in a fair and equitable manner. The Arbitrator ruled that the grievance was not barred by section 7116(d), but noted that the argument concerning the deletion of Article 32, Section 6(C) raised concerns as to the status of the arbitration.
The Agency then filed a prehearing motion to find the grievance without merit because it was based on a contract provision that no longer existed. Prior to ruling on the Agency's motion, the Arbitrator requested guidance on the significance of Article 10, Section 1 of the current agreement.(3) The Agency claimed that Article 10, Section 1 was limited to claims of prohibited employment discrimination. In its motion, the Agency additionally claimed that the grievance was not properly before the Arbitrator because the Union had failed to negotiate the issue of a fair distribution of performance awards. The Arbitrator denied the Agency's motion. He ruled that he would apply Article 10, Section 1 to decisions on performance awards because the Agency's asserted interpretation was not supported by either the syntax or the substance of the provision. He also rejected the Agency's argument that he lacked jurisdiction because the Union failed to negotiate on the issue of fair distribution of performance awards.
On the merits, the Arbitrator determined that the Agency's denial of performance awards to the grievants upon reconsideration was arbitrary and not in accordance with Article 10, Section 1 of the collective bargaining agreement. As a remedy, the Arbitrator ordered that each grievant be granted the performance award that he or she would have received but for the policy of denying awards to employees rated "outstanding" who had been promoted during the appraisal period. The Arbitrator also authorized the Union to submit a petition for attorney fees, which it did.
The Arbitrator subsequently awarded fees in the amount of $7,522.50. He specifically ruled that an award of fees was warranted in the interest of justice. He found that the Agency's actions in failing to consider the grievants fairly and equitably for performance awards as required by the parties' collective bargaining agreement were clearly without merit and constituted a prohibited personnel practice.
III. Positions of the Parties
A. Agency's Exceptions in Case No. 0-AR-2710
The Agency contends that the Arbitrator's order requiring it to grant performance awards is deficient on four grounds.
First, the Agency contends that the Arbitrator's order is contrary to the Statute. The Agency argues that the grievance and the Arbitrator's order are barred by section 7116(d) because the grievance is based on the same facts as the earlier-filed ULP and the Union sought the same remedy. The Agency also claims that the order conflicts with its rights under section 7106(a) to determine its budget, direct employees, and assign work. In addition, relying on Patent Office Professional Association v. FLRA, 26 F.3d 1148 (D.C. Cir. 1994), the Agency argues that the grievance was not arbitrable because the Union had an obligation under section 7116(b)(5) and (6) to negotiate and reach an impasse on the issue of the fairness of the performance award system prior to seeking arbitration.
Second, the Agency argues that, under 5 C.F.R. § 430.504(e),(4) the Arbitrator's order is deficient because the Union had no authority to appeal to arbitration the Agency's failure to grant the grievants performance awards.
Third, the Agency argues that the Arbitrator's order fails to draw its essence from the agreement because Article 10, Section 1 applies only to employment discrimination. The Agency asserts that the Arbitrator showed a manifest disregard of the agreement by looking only to the phrase "employees shall be treated fairly and equitably" without reading the rest of the provision. The Agency also argues that the order is deficient because the Arbitrator disregarded Article 13, Section 2(B) of the agreement, which excludes grievances over "Decisions on Incentive Awards."
Finally, the Agency asserts that the Arbitrator exceeded his authority by expanding the case to involve interim issues not submitted to arbitration or agreed on by the parties, even though he ultimately ruled only on issues submitted to arbitration.
B. Agency's Exceptions in Case No. 0-AR-2733
The Agency contends that the award of attorney fees is deficient on three grounds.
First, the Agency argues that the award was premature because the Arbitrator resolved the fee request before the Authority resolved the Agency's exceptions to the Arbitrator's order granting performance awards, which were pending at the time of the award of attorney fees.
Second, the Agency argues that the award is contrary to the Back Pay Act, 5 U.S.C. § 5596, because the award of fees is not in the interest of justice. The Agency asserts that an award of fees cannot be in the interest of justice when an agency has offered full settlement prior to arbitration.
Finally, the Agency claims that the fee award should be set aside because the Arbitrator was biased against the Agency. The Agency bases this claim on the Arbitrator's repeated statement that the Agency's attorney "abruptly announced that the hearing was over and that the Medical Center would be going to [F]ederal court." Fee Award Exceptions at 4. The Agency asserts that this statement is untrue and has submitted affidavits of its attorney and employee relations supervisor to support the assertion.
B. Union's Opposition
The Union contends that the Arbitrator's order that the Agency grant the grievants performance awards is consistent with the Statute and draws its essence from the collective bargaining agreement.
The Union also contends that the Arbitrator's award of attorney fees was not premature and that the Arbitrator correctly determined that the award of attorney fees was warranted in the interest of justice and fully articulated the basis for that determination. Finally, the Union asserts that the affidavits submitted by the Agency in support of its exceptions are not appropriate and that the Authority should disregard them.
IV. Analysis and Conclusions
A. The Arbitrator's Order to Grant Performance Awards Is Not Contrary to the Statute
In circumstances where the exceptions involve an award's consistency with law, we review the questions of law raised by the arbitrator's award and the exceptions 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.2d 682, 686-87 (D.C. Cir. 1994)). We address the Statute claims on the grounds of whether the order is contrary to section 7116(d), section 7106(a), or section 7116(b)(5) or (6).
1. The Order Is Not Contrary to Section 7116(d)
For a grievance to be barred under section 7116(d) by an earlier-filed ULP charge all the following requirements must met: (1) the issue which is the subject matter of the grievance must be the same as the issue which is the subject matter of the ULP; (2) such issue must have been earlier raised under the ULP procedures; and (3) the selection of the ULP procedures must have been in the discretion of the aggrieved party. E.g., U.S. Department of the Army, Army Finance and Accounting Center, Indianapolis, Indiana and American Federation of Government Employees, Local 1411, 38 FLRA 1345, 1350 (1991), review denied AFGE Local 1411 v. FLRA, 960 F.2d 176 (D.C. Cir. 1992). In determining whether the procedures involved the same issue, the Authority focuses on whether the ULP charge arose from the same set of factual circumstances as the grievance and whether the theories advanced in support of the ULP charge and the grievance are substantially similar. Id. at 1350-51. Actions seeking the same remedy do not necessarily present the same issue or substantially similar theories under section 7116(d). Olam Southwest Air Defense Sector (TAC), Point Arena Air Force Station, Point Arena, California, 51 FLRA 797, 805 (1996).
In this case, the theories are not substantially similar. The theory advanced in support of the ULP charge was that the Agency implemented a change in conditions of employment without providing the Union with notice and an opportunity to bargain. The theory advanced in support of the grievance was that the Agency's denial of performance awards to the grievants upon reconsideration after settlement of the ULP was not fair and equitable as required by the parties' collective bargaining agreement. In addition, the Agency's claim that the grievance was barred because the grievance and the ULP sought the same remedy is without merit. Although performance awards were sought as remedies in both forums, each case advanced a different legal theory. See 51 FLRA at 804-05 & n.12. As the grievance did not present the same issue as the ULP, no basis is presented for finding that the Arbitrator's order is precluded by section 7116(d) of the Statute.
2. The Order Is Not Contrary to Section 7106(a)
The Arbitrator ordered only a make-whole remedy, which redresses the Agency's failure to grant performance awards on a fair and equitable basis upon reconsideration after settlement of the ULP. The identification of critical elements and the establishment of performance standards as part of the performance appraisal process clearly implicate management's rights to assign work and direct employees under section 7106(a)(2)(A) and (B). E.g., National Association of Agriculture Employees, Local 39 and U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Plant Protection and Quarantine, Elizabeth, New Jersey, 49 FLRA 319, 324 (1994). However, the Arbitrator's order does not affect in any manner the Agency's appraisal of the grievants or the standards that an employee must attain in order to be eligible for a performance award. Thus, no basis is presented for finding that the Arbitrator's order is contrary to section 7106(a)(2)(A) or (B) of the Statute. See 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, 381 (1993).
In addition, even assuming that the budget test set forth in American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604 (1980), enforced as to other matters sub nom., 659 F.2d 1140 (D.C. Cir. 1981), cert. denied, 455 U.S. 945 (1982), applies to make-whole remedies such as the Arbitrator's order, no basis is provided for finding the order contrary to management's right to determine its budget under section 7106(a)(1). See U.S. Department of Defense, Defense Logistics Agency, Defense Distribution Region West, Defense Distribution Depot Red River, Texarkana, Texas and National Association of Government Employees, Local R14-52, 52 FLRA No. 13, slip op. at 4 (1996) (DLA). Because the Arbitrator's order does not prescribe future performance award budgets, the order does not conflict with management's right under the first part of the Authority's budget test. See 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, 1302 (1993). Because the Agency has supplied no budget information that would allow the Authority to determine whether the Arbitrator's order requires a significant and unavoidable budget increase without any compensating benefits, the order does not conflict with management's right to determine its budget under the second part of the Authority's budget test. See DLA, slip op. at 5.
3. The Order is Not Contrary to Section 7116(b)(5) or (6)
The Agency provides no support for its assertion that, under section 7116(b)(5) and (6), the Union had an obligation to negotiate and reach impasse on the issue of the fairness of the performance award system before seeking arbitration. Furthermore, its reliance on Patent Office Professional Association v. FLRA is misplaced. In that case, the court found that in order for an interest arbitrator to have jurisdiction under section 7119 of the Statute, there must first be a negotiation impasse. This case involves grievance arbitration under section 7121 of the Statute and there is no such requirement in the Statute for the arbitration of grievances. Therefore, no basis is presented for finding that the order is contrary to section 7116(b)(5) or (6) of the Statute.
Based on the foregoing, we conclude that the order is not contrary to the Statute, and we deny this exception.
B. The Order Is Not Contrary to 5 C.F.R. § 430.504(e)
5 C.F.R. § 430.504(e) pertains to appeals before the Merit Systems Protection Board or to other forms of administrative appeals under the Civil Service Reform Act. It does not address the scope of the negotiated grievance procedure under the Statute. U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1923, 46 FLRA 1126, 1132 (1993); accord U.S. Department of Health and Human Services, Social Security Administration, Office of Hearings and Appeals and American Federation of Government Employees, Council 215, 48 FLRA 357, 363 (1993). Therefore, 5 C.F.R. § 430.504(e) does not preclude grievances over the failure to grant a performance award.(5) Accordingly, we deny this exception.(6)
C. The Order Does Not Fail to Draw Its Essence From the Collective Bargaining Agreement
The Arbitrator examined the phrase "fair and equitable" in Article 10, Section 1 and interpreted it to apply to all decisionmaking. The Agency has not demonstrated that this interpretation of the agreement disregards the agreement or is irrational, implausible or unfounded. See United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 575-76 (1990).
Under section 2429.5 of the Authority's Regulations,(7) the Authority will not consider any issue that could have been, but was not, presented in the proceedings before the arbitrator. American Federation of Government Employees, Local 3295 and U.S. Department of the Treasury, Office of Thrift Supervision, Washington, D.C., 51 FLRA 27, 32 (1995). There is no indication in the record that the Agency argued to the Arbitrator, as it has in its exception, that grievances over decisions on incentive awards are excluded by Article 13, Section 2(B) from coverage of the parties' negotiated grievance procedure. Consequently, this argument provides no basis for finding the order deficient. See id.
Accordingly, the Agency has failed to establish that the order does not draw its essence from the collective bargaining agreement, and we deny this exception.
D. The Arbitrator Did Not Exceed His Authority
Arbitrators exceed their authority when they fail to resolve an issue submitted to arbitration, resolve an issue not submitted to arbitration, disregard specific limitations on their authority, or award relief to persons who are not encompassed within the grievance. E.g., Sport Air Traffic Controllers Organization and U.S. Department of the Air Force, Headquarters, Air Force Flight Test Center, Edwards Air Force Base, California, 51 FLRA 1634, 1638 (1996). In the absence of a stipulated issue, the Authority accords substantial deference to the arbitrator's formulation of the issues submitted. Id.
In this case, the parties did not stipulate the issues to be resolved. The Agency concedes that the Arbitrator ultimately ruled only on issues submitted to arbitration, but objects to issues that were addressed in his interim rulings. However, the Agency has failed to establish that the issues addressed by the Arbitrator in ruling on the Agency's numerous motions were not responsive to the issues and matters raised in those motions. See id. Accordingly, the Agency provides no basis for finding that the Arbitrator exceeded his authority, and we deny this exception.
E. The Award of Attorney Fees Is Not Deficient Because It Was Premature
Authority precedent clearly establishes that an arbitrator is not required to refrain from granting a request for attorney fees until after the Authority resolves any exceptions that may have been filed to the underlying award.(8) Department of Defense Dependents Schools, Pacific Region and Overseas Education Association, Pacific Region, 30 FLRA 1206, 1216 (1988), reconsideration granted as to other matters, 32 FLRA 757 (1988). Consistent with this precedent, the fee award is not deficient as premature, and we deny this exception.
F. The Award of Fees Is Warranted in the Interest of Justice
As previously noted, we review the question of law raised by the award of fees and the Agency's exception de novo. The Back Pay Act requires that an arbitrator's resolution of a request for attorney fees must be in accordance with the standards established under 5 U.S.C. § 7701(g). For cases not involving claims of employment discrimination, section 7701(g) requires that an award of attorney fees must be warranted in the interest of justice. The standards established under section 7701(g) further require a fully articulated, reasoned decision setting forth the arbitrator's specific findings supporting the determination on each pertinent statutory requirement. E.g., U.S. Department of Defense, Defense Distribution Region East, New Cumberland, Pennsylvania and American Federation of Government Employees, Local 2004, 51 FLRA 155, 158 (1996).
An award of fees is warranted in the interest of justice in cases when any one of the following six criteria are met: (1) where an agency committed a prohibited personnel practice; (2) where an agency action is clearly without merit or wholly unfounded, or where the employee is substantially innocent of charges brought by the agency; (3) where agency actions are taken in bad faith to harass or exert improper pressure on an employee; (4) where an agency committed gross procedural error that prolonged the proceeding or severely prejudiced the employee; (5) where the agency knew or should have known that it would not prevail on the merits when it brought the proceeding; or (6) where there is a service rendered to the Federal workforce or there is a benefit to the public derived from maintaining the action. Id. at 161-62.
The Arbitrator's decision awarding attorney fees fully articulates a reasoned decision setting forth specific findings supporting the determination that the award of attorney fees was warranted in the interest of justice because the Agency's actions were clearly without merit. Where, as here, an arbitrator fully articulates the reasons supporting one of the interest-of-justice criteria, we defer to the arbitrator's finding. Id. at 162. Consequently, the Arbitrator's award satisfies the legal requirements for finding that an award of attorney fees is warranted in the interest of justice. The Agency provides no support for its claim that despite the Arbitrator's finding, the award of fees is somehow deficient because it offered a settlement equivalent to the Arbitrator's award. Accordingly, we deny this exception.(9)
G. The Arbitrator Was Not Biased
To demonstrate that an award is deficient because of bias on the part of the arbitrator, a party must show that the award was procured by improper means, that the arbitrator was partial or corrupt, or that the arbitrator engaged in misconduct that prejudiced the party's rights. E.g., American Federation of Government Employees, Council 215 and Social Security Administration Office of Hearings and Appeals, Falls Church, Virginia, 52 FLRA 85, 87 (1996). The Agency's allegation that the Arbitrator repeated an inaccurate statement does not establish bias on the part of the Arbitrator. Cf. id. (unsupported allegations of misconduct by the arbitrator failed to establish that the arbitrator was biased); American Federation of Government Employees, Local 4042 and U.S. Department of Defense, Army Air Force Exchange Service, Waco Distribution Center, Waco, Texas, 51 FLRA 1709, 1714 (1996) (the forcefulness of the arbitrator's findings and the language in his opinion sharply critical of the union, alone, failed to establish that the arbitrator was biased). Accordingly, we deny this exception.(10)
The Agency's exceptions are denied.
(If blank, the decision does not have footnotes.)
1. 0-AR-2733 is the docket number for the Agency's separate exceptions to the Arbitrator's supplemental award on the Union's request for attorney fees. We have consolidated the cases for decision.
2. This provision provides:
Awards for performance will be distributed in a fair and equitable manner.
Arbitrator's Merits Decision at 3 n.1.
3. This provision provides:
In an atmosphere of mutual respect, all employees shall be treated fairly and equitably, and without discrimination in all aspects of personnel management, without regard to political affiliation, union activity, race, color, religion, national origin, sex, marital status, age, or nondisqualifying handicapping conditions, and with proper regard and protection of their privacy and constitutional rights.
Arbitrator's Merits Decision at 18.
4. This provision provides:
The failure to pay an award under this subpart, or the amount of such an award, may not be appealed.
5. In September 1995, 5 C.F.R. part 451, subpart A on performance awards replaced the provisions of part 430, subpart E on performance awards, including subsection 504(e). There is no provision in part 451, subpart A comparable to § 430.504(e). However, because the grievance is not precluded under either part 430 or part 451, it is unnecessary to decide whether part 451 should be applied retroactively under the holding in Landgraf v. USI Film Products, -- U.S. --, 114 S. Ct. 1483 (1994).
6. In U.S. Department of the Army, Headquarters, U.S. Army Aviation Center, Fort Rucker, Alabama and Wiregrass Metal Trades Council, 52 FLRA 89, 93 (1996), the agency contended, and the Authority found, that an arbitrator's order that the agency grant the grievant a performance award was contrary to 5 C.F.R. § 430.504(d). In this case, the Agency has not contended that the Arbitrator's order is contrary to § 430.504(d). Consequently, we do not address the matter. See DLA, slip op. at 5 n.2.
7. This provision provides:
The Authority will not consider evidence offered by a party, or any issue, which was not presented in the proceedings before the Regional Director, Hearing Officer, Administrative Law Judge, or arbitrator.
8. Of course, an arbitrator may appropriately choose not to address a request for attorney fees until exceptions to the underlying award are resolved. See Alabama Association of Civilian Technicians and U.S. Department of Defense, Alabama State Military Department, Alabama National Guard, 51 FLRA 1262, 1264 (1996) (arbitrator appropriately declined to retain jurisdiction to rule on union's request for attorney fees; union may file a request for fees with the arbitrator within a reasonable period of time after the Authority's decision resolving exceptions to the underlying award); see also 5 C.F.R. § 1201.37 (motions for attorney fees in conjunction with proceedings before the Merit Systems Protection Board are filed after underlying decision becomes final).
9. Because the Agency only challenges the Arbitrator's finding that the award of fees was in the interest of justice, we have not considered the other requirements of the Back Pay Act. See U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and National Treasury Employees Union, 48 FLRA 931, 934 (1993).
10. In support of this exception, the Agency submitted affidavits to support its assertion that the Arbitrator had misrepresented the Agency's position. The Union asserts that the Authority should not consider these affidavits. However, because the affidavits constitute support for the Agency's contention that the award is deficient because the Arbitrator was biased, they could not have been submitted to the Arbitrator prior to issuance of the award. Therefore, their use is not precluded by section 2429.5 of the Authority's Regulations. See U.S. Department of Justice, Immigration and Naturalization Service, El Paso, Texas and American Federation of Government Employees, National Border Patrol Council, Local 1929, 40 FLRA 43, 52 (1991). Accordingly, in resolving the exception, we have considered the Agency's affidavits.