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52:1458(135)AR - NTEU Chapter 45 and Treasury, IRS, Tulsa, OK - 1997 FLRAdec AR - v55 p1458

[ v52 p1458 ]
The decision of the Authority follows:

52 FLRA No. 135














May 9, 1997


Before the Authority: Phyllis N. Segal, Chair; and Donald S. Wasserman, Member.

I. Statement of the Case

This matter is before the Authority on exceptions to an award of Arbitrator I.B. Helburn filed by the Union under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exceptions. The Agency also filed a motion to strike an attachment to the exceptions, and the Union filed a reply to the motion.

The Arbitrator denied a grievance challenging the Agency's 3-day suspension of the grievant. For the following reasons, we conclude that the Union's exceptions do not establish that the Arbitrator's award is deficient under section 7122(a) of the Statute. Accordingly, we deny the exceptions.

II. Background and Arbitrator's Award

The Agency suspended the grievant for 3 days for failing to properly file a Federal tax return--specifically, failing to report certain dividend income--in violation of an Agency Rule of Conduct. (1) The grievance was filed initially at Step 3 of the parties' grievance procedure, where it was denied by the Agency based on both the grievant's admission that he had incorrectly filed the tax return and the Agency's determination that he had not used ordinary care in filing the return. The grievance was submitted to arbitration under an expedited process. The Arbitrator framed the issue as follows:

Was the three-day suspension of the grievant for just cause and, if not, what is the appropriate remedy?

Award at 2.

Although the grievant had admitted previously that he had improperly filed his tax return, the Union argued before the Arbitrator that the grievance should be sustained because the grievant mistakenly believed that he had underreported the dividend income, and because a portion of the dividend income "was properly handled." (2)Id. The Agency argued that the grievance should be denied because the grievant had admitted that he had improperly filed his return. The Agency also argued that the grievant was estopped by Article 41.7.C. of the parties' agreement (3)from claiming in arbitration that he had properly filed his tax return with respect to a portion of the dividend income because this issue had not been raised previously.

The Arbitrator interpreted Article 41.7.C. to provide that "issues not previously raised at Step 2 [of the parties' grievance procedure] may not be unilaterally raised in arbitration." Id. The Arbitrator determined that although the grievance began at Step 3, Article 41.7.C. was nonetheless applicable. The Arbitrator concluded, based on Article 41.7.C., that he could not consider the Union's contention that a portion of the underreported dividend income was properly handled.

The Arbitrator next found that the grievant: (1) did not contest the Agency's underpayment determination; (2) paid the additional taxes; and (3) acknowledged in correspondence to the Agency, in his oral reply, and at Step 3 of the grievance procedure, that he had incorrectly filed the tax return. The Arbitrator also found that even though the Union asserted that a portion of the underreported dividend income was properly handled, it did not dispute the grievant's failure to properly report other dividend income and his failure to treat a foreign tax credit properly.

The Arbitrator further found, in relevant part, that even if a portion of the underreported dividend income was properly handled, the grievant still failed to properly file his tax return with respect to the remaining portion. Because of the amount that was underreported and evidence of neglect on the grievant's part, the Arbitrator concluded that the suspension was not inappropriate. Accordingly, the Arbitrator denied the grievance.

III. Preliminary Matter Concerning Agency's Motion to Strike the Declaration of the Union Representative

Based on section 2429.5 of the Authority's Regulations, (4) the Agency moves to strike an attachment to the exceptions on the ground that it contains evidence that was not submitted to the Arbitrator. The Agency also objects to the statement of facts set forth in the Union's exceptions. According to the Agency, no weight should be given to the Union's recitation of alleged testimony by witnesses because the proceeding was an expedited arbitration and no transcript was prepared.

In its reply to the Agency's motion to strike, the Union contends that statements submitted in support of exceptions to an award that seek to reflect what transpired at an expedited arbitration hearing, where no briefs or transcripts were produced, may be considered by the Authority. In support, the Union cites U.S. Department of the Air Force, Sacramento Air Logistics Center, McClellan Air Force Base, California and American Federation of Government Employees, Local 1857, 50 FLRA 96 (1995) (McClellan AFB). The Union further contends that the evidence contained in the attachment to the exceptions was before the Arbitrator and, therefore, is not precluded by section 2429.5 of the Authority's Regulations. The Union also asserts that the Agency's objection to the Union's statement of facts set forth in the exceptions should be rejected.

In McClellan AFB, 50 FLRA at 99, the Authority rejected an agency's request that the Authority not consider statements submitted in support of a union's exceptions under section 2429.5. The Authority stated that insofar as the statements sought to reflect what transpired at the arbitration hearing, and given the fact that the filing of briefs was not permitted under the parties' contractual expedited arbitration procedure, the statements could not have been presented to the Arbitrator. The Authority, therefore, found that section 2429.5 did not preclude its consideration of the statements. However, the Authority stated that in situations where parties have elected to use an expedited procedure that lacks a formal transcript of the hearing, it would not permit the parties' submissions to substitute for a formal record. Rather, it would consider them only as arguments in support of the exceptions.

The instant case was processed through the parties' contractual expedited procedure and lacked a formal transcript. Consistent with McClellan AFB, therefore, section 2429.5 does not preclude consideration of the attachment insofar as it is an argument in support of an exception. Accordingly, the Agency's motion to strike is denied. The Agency's request that the Union's statement of facts not be considered is also rejected because it, too, is an argument in support of an exception.

IV. Positions of the Parties

A. Union's Exceptions

The Union contends that the Arbitrator exceeded his authority because he decided an issue not before him. According to the Union, the parties stipulated that there were no issues of arbitrability or grievability before the Arbitrator. The Union claims that the Arbitrator "completely ignored" the parties' stipulation when he held that the Union was estopped from presenting the issue as to whether the grievant had properly filed his tax return. Exceptions at 11.

The Union next asserts that the award is contrary to 5 U.S.C. 7503 and 5 C.F.R. 752.203 (section 752.203) and deprives the grievant of his right to substantive due process under the Constitution. (6)The Union asserts that a Federal employee possesses a constitutionally protected property interest in his or her employment and the grievant's constitutional right to due process requires that he be provided the right to establish any fact which, under law, would protect that property interest. The Union contends that the Arbitrator's refusal to allow the grievant to withdraw his admission concerning the alleged failure to file an accurate tax return denied the grievant his "fundamental right to offer proof at hearing to rebut the [G]overnment's evidence[,]" and deprived him of due process. /6 Id. at 16 (footnote omitted).

The Union also contends that the award is deficient because the Arbitrator's interpretation of Article 41.7.C. fails to draw its essence from the parties' agreement.

Finally, the Union asserts that the Arbitrator's application of Article 41.7.C. is based on a nonfact because the record shows that the grievant raised the issue of whether he was suspended for "'just cause'" prior to arbitration. Id. at 20.

B. Agency's Opposition

The Agency asserts that the Arbitrator did not exceed his authority. According to the Agency, the Arbitrator did not rule that the suspension was not grievable or arbitrable, but rather interpreted Article 41.7.C. and held that the Union could not raise a new issue at the hearing.

The Agency also asserts that: (1) the award is not contrary to 5 U.S.C. 7503 and section 752.203 and does not deprive the grievant of due process; (2) the award draws its essence from the parties' agreement; and (3) the Union has not shown that the award is based on a nonfact.

V. Analysis and Conclusion

A.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 asserting that the Arbitrator resolved an arbitrability issue not properly before him, the Union misinterprets the Arbitrator's finding. As framed by the Arbitrator, the issue was whether the grievant's 3-day suspension was for just cause and, if not, what was the appropriate remedy. The Arbitrator resolved this issue. In so doing, he addressed an objection made by the Agency, based on Article 41.7.C., to the Union's attempt to claim that the grievant properly handled certain dividend income. The Arbitrator did not conclude that the grievance was not arbitrable; rather, he resolved the merits of the just cause issue. Consequently, there is no basis to conclude that the Arbitrator exceeded his authority by his ruling on Article 41.7.C. Accordingly, we deny the exception.

B. The Award Is Not Contrary to 5 U.S.C. 7503 and 5 C.F.R. 752.203 and Does Not Deprive the Grievant of Substantive Due Process under the Constitution

Where a party's exception involves an award's consistency with law, the Authority must review the questions of law raised by the arbitrator's award and the party'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)).

Title 5, United States Code, section 7503, provides that "an employee," as defined in section 7501, may not be suspended for 14 days or less except "for such cause as will promote the efficiency of the service." Section 752.203(b) sets forth procedural protections provided in 5 U.S.C. 7503(b). The Union contends that the award is inconsistent with section 752.203(b) for the same reason that it is inconsistent with 5 U.S.C. 7503(b)--it deprives the grievant of his constitutional right to due process.

In U.S. Department of Veterans Affairs, National Memorial Cemetery of the Pacific and International Association of Machinists and Aerospace Workers, Hawaii Federal Lodge 1998, 45 FLRA 1164 (1992) (Hawaii Federal Lodge), which involved a 5-day suspension, the Authority addressed, among other things, an employee's constitutional right to due process under 5 U.S.C. 7503(b). The Authority found that it was well established that employees, as defined in 5 U.S.C. 7511, have a right to constitutional due process in actions covered by 5 U.S.C. 7512. (7)The Authority concluded, for the reasons stated therein, that employees subject to actions covered by 5 U.S.C. 7503 have such a right also.

The Authority also stated, however, that once it is determined that there is a constitutional right, the question remains what process is due. As relevant here, the Authority found that Federal employees suspended for 14 days or less are not entitled to post-suspension proceedings. (8)

In this case, as the grievant's suspension was an action covered by 5 U.S.C. 7503, a post-suspension proceeding was not constitutionally required under Hawaii Federal Lodge. (9)Consequently, the Union's challenge to the Arbitrator's denial of its request to raise a defense in the hearing cannot be held to violate the grievant's right to constitutional due process because there is no constitutional requirement for any post-suspension proceeding at all, let alone for the procedures that an arbitrator must follow in the hearing. (10) Accordingly, the award is not contrary to 5 U.S.C. 7503. Moreover, inasmuch as section 752.203 simply sets forth specific procedures regarding 5 U.S.C. 7503(b), we find that our conclusion with regard to 5 U.S.C. 7503--that the Arbitrator's denial of the Union's request does not violate the grievant's constitutional due process--applies as well to 5 C.F.R. 752.203. Accordingly, the award is not contrary to 5 C.F.R. 752.203.

The cases relied on by the Union to support its argument that the grievant had a right to offer the disputed defense at the arbitration hearing are distinguishable. The process required by the Constitution in actions involving suspensions under 5 U.S.C. 7503 is not addressed in any of these cases, none of which concern such suspension proceedings. (11) Therefore, they provide no basis for finding the award deficient.

Accordingly, we deny this exception.

C. The Award Draws Its Essence From the Parties' Agreement

The Arbitrator determined that Article 41.7.C. applied in this case and that, because the issue raised by the Union's contention was not raised prior to the arbitration hearing, he could not consider it. The Union has not demonstrated that this interpretation of the agreement is in manifest disregard of 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). As the Union fails to show that the award does not draw its essence from the parties' agreement, we deny this exception.

D. The Award Is Not Based on a Nonfact

To establish that an award is based on a nonfact, the appealing party must demonstrate that the central fact underlying the award is clearly erroneous, but for which a different result would have been reached by the arbitrator. U.S. Department of the Air Force, Lowry Air Force Base, Denver, Colorado and National Federation of Federal Employees, Local 1497, 48 FLRA 589, 593 (1993).

As to the Union's assertion that the Arbitrator's application of Article 41.7.C. is based on a nonfact, we find that the Union misinterprets the award. The Arbitrator did not find that the grievant had not raised the issue of just cause prior to the arbitration hearing. Rather, the Arbitrator found that, based on Article 41.7.C., he could not consider certain evidence because it raised an issue not previously presented. This determination resulted from the Arbitrator's evaluation of the evidence and his interpretation of the parties' agreement and, as such, does not constitute a fact that can be challenged as a nonfact. E.g., American Federation of Government Employees, Local 1802 and Social Security Administration, Golden Teleservice Center, Golden, Colorado, 50 FLRA 396, 398 (1995). Consequently, the Union's exception provides no basis for finding the award deficient. Accordingly, we deny this exception.

VI. Decision

The exceptions are denied.


5 U.S.C. 7503

7503. Cause and procedure

(a) Under regulations prescribed by the Office of Personnel Management, an employee may be suspended for 14 days or less for such cause as will promote the efficiency of the service (including discourteous conduct to the public confirmed by an immediate supervisor's report of four instances within any one-year period or any other pattern of discourteous conduct.)

(b) An employee against whom a suspension for 14 days or less is proposed is entitled to-- (1) an advance written notice stating the specific reasons for the proposed action; (2) a reasonable time to answer orally and in writing and to furnish affidavits and other documentary evidence in support of the answer; (3) be represented by an attorney or other representative; and (4) a written decision and the specific reasons therefor at the earliest practicable date.

(c) Copies of the notice of proposed action, the answer of the employee if written, a summary thereof if made orally, the notice of decision and reasons therefor, and any order effecting the suspension, together with any supporting material, shall be maintained by the agency and shall be furnished to the Merit Systems Protection Board upon its request and to the employee affected upon the employee's request.

5 C.F.R. 752.203

752.203 Procedures.

(a) Employee entitlements. An employee under this subpart whose suspension is proposed under this subpart is entitled to the procedures provided in 5 U.S.C. 7503(b).

(b) Notice of proposed action. The notice of proposal shall inform the employee of his or her right to review the material which is relied on to support the reasons for action given in the notice.

(c) Time to answer. The employee shall be given a reasonable time to answer but not less than 24 hours.

(d) Representation. Section 7503(b)(3) of title 5 of the United States Code provides that an employee covered by this part whose suspension is proposed in [sic] entitled to be represented during the action by an attorney or other representative. . . .

(e) Agency decision. In arriving at its written decision, the agency shall consider only the reasons specified in the notice of proposed action and shall consider any answer of the employee and/or his or her representative made to a designated official. The agency shall deliver the notice of decision to the employee at or before the time the action will be effective.

(f) Grievances. The employee may file a grievance through an agency administrative grievance system . . . or, if the suspension falls within the coverage of an applicable negotiated grievance procedure, an employee in an exclusive bargaining unit may file a grievance only under that procedure. . . .

(g) Agency records. The agency shall maintain copies of the items specified in 5 U.S.C. 7503(c) and shall furnish them upon request as required by that subsection.

(If blank, the decision does not have footnotes.)

1. A copy of the Agency Rule of Conduct is not in the record.

2. The Agency claimed that the grievant had failed to properly report $2,975 in dividend income. The Union claimed that $2,043 of the underreported dividend income was properly filed.

3. Article 41.7.C. provides as follows:

With the exception of subsections 2E and 7D, new issues may not be raised by either party unless they have been raised at Step 2 of the grievance procedure; provided, however, that the parties may agree to join the new issues with a grievance process. [Subsection 2E concerns discrimination matters and subsection 7D concerns grievability or arbitrability matters.]

4. Section 2429.5 of the Authority's Regulations provides as follows:

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. The Authority may, however, take official notice of such matters as would be proper.

5. The text of 5 U.S.C. § 7503 and section 752.203 is set forth in the Appendix to this decision.

6. In support, the Union cites the following Federal court cases: Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281 (1974) (Bowman); Ohio Bell Telephone Co. v. Public Utilities Commission, 301 U.S. 292 (1937) (Ohio Bell); Roberts v. City of New York, 295 U.S. 264 (1935) (Roberts); Gregory v. City of Rogers, Arkansas, 974 F.2d 1006 (8th Cir. 1992) (City of Rogers); Jeffries v. Turkey Run Consolidated School District, 492 F.2d 1 (7th Cir. 1974) (Jeffries); and Beatham v. Manson, 369 F. Supp. 783 (D. Conn. 1973) (Beatham).

7. 5 U.S.C. § 7512 applies to: (1) removals; (2) suspensions for more than 14 days; (3) reductions in grade; (4) reductions in pay; and (5) furloughs of 30 days or less. 5 U.S.C. § 7503 applies to suspensions for 14 days or less.

8. The Authority also found that such employees are due predecisional proceedings no more formal or extensive than those required in Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985) (Loudermill) and no less extensive than those required by Goss v. Lopez, 419 U.S. 565 (1975) (Goss). Loudermill requires an oral or written notice of the charges, an explanation of the employer's evidence, and an opportunity for an employee to present his or her side of the story. Goss requires oral or written notice of the charges and then, if the individual denies them, an explanation of the authorities' evidence, and an opportunity for the individual to present his or her side of the story. In making its finding in Hawaii Federal Lodge, the Authority relied on the reasons and conclusions of the courts in Gillard v. Norris, 857 F.2d 1095 (6th Cir. 1988), Garraghty v. Jordan, 830 F.2d 1295 (4th Cir. 1987), and Click v. Board of Police Commissioners, 609 F. Supp. 1199 (W.D. Mo. 1985).

9. The Union does not claim that the grievant was denied due process prior to his suspension.

10. For purposes of this analysis, we do not need to consider whether an arbitration hearing can constitute a post-suspension proceeding. Accordingly, we do not address that issue.

11. The cases involved the following proceedings: Bowman (motor carriers' applications for certificates of public convenience and necessity to transport general commodities between specified points under motor carrier provisions of the Interstate Commerce Act); Ohio Bell (telephone company's request before public utilities commission to revise company's rate schedules); Roberts (condemnation proceeding of certain property pursuant to state statute); City of Rogers (civil rights action against municipality and police officer for alleged violation of motorists' civil rights in arresting designated driver and failing to provide for motorists' safety); Beatham (prisoner's action under civil rights statute against commissioner of corrections concerning a reduction in pay); and Jeffries (action of discharged nontenured school teacher whose contract was not renewed against school district under civil rights statute).