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The decision of the Authority follows:
53 FLRA No. 29
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF DEFENSE
DEFENSE LOGISTICS AGENCY
DEFENSE CONTRACT MANAGEMENT COMMAND
DEFENSE CONTRACT MANAGEMENT AREA OPERATIONS BOSTON
NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
July 15, 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 Tim Bornstein 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 sustained the portion of the grievance alleging that the Agency improperly rated Grievant No. 2's job performance.(1) The Arbitrator canceled the ratings in two of the grievant's critical elements and ordered the Agency to raise these ratings to "highly successful."
For the reasons discussed below, we conclude that the Agency has failed to establish that the portion of the award canceling the grievant's two disputed critical element ratings is deficient and we deny the Agency's exceptions to that portion of the award. However, we conclude that the portion of the Arbitrator's award ordering the Agency to raise the grievant's disputed ratings is deficient because it is contrary to the Statute, and we modify that portion of the award accordingly.
II. Background and Arbitrator's Award
For the performance rating period in dispute, the grievant received ratings of "fully successful" in critical elements three and four. The ratings were lower than the "highly successful" ratings the grievant had received the year before. The grievance was submitted to arbitration. As relevant to this case, the Arbitrator framed the issue as: "Did management evaluate the grievant['s] performance for the periods in question in accordance with the [parties'] collective bargaining agreement and applicable regulations?" Award at 1-2.
The Arbitrator quoted Article 16 of the parties' agreement, which provides that "'[p]erformance evaluation will be conducted consistent with the provisions of DLAR [Defense Logistics Agency Regulation], 1434.1[.]'" Id. at 5.(2) The Arbitrator found that the Agency failed to rate the grievant in accordance with DLAR 1434.1 because it failed to inform the grievant of its dissatisfaction with her work, as required by paragraph VI.B.1. of the regulation. He also found that the Agency failed to give the grievant a mid-year review as required by paragraph VI.B.2. The Arbitrator noted that, according to an Agency official's "uncontradicted" testimony, a 3-month evaluation with the grievant was conducted "only because the grievant had not been given performance standards until then." Id. at 10. Consequently, he set aside the grievant's "fully successful" ratings in critical elements three and four.
Concerning an appropriate remedy, the Arbitrator found that there was no evidence in the record to indicate diminished performance on the part of the grievant in her disputed critical elements from the prior year. The Arbitrator ruled that without an indication of diminished performance, the grievant should be rated at the same "highly successful" level as the previous year. The Arbitrator sustained the grievance and ordered the Agency to rate the grievant at the "highly successful" level for critical elements three and four.
III. Positions of the Parties
The Agency contends that the award is contrary to law. Specifically, the Agency claims that the award is contrary to the two-prong test established in SSA I and described in SSA II.(3) In this regard, the Agency asserts that the Arbitrator did not (1) find that the elements and standards were improperly applied, or (2) determine what the grievant's rating would have been under established elements and standards. Regarding the test's first prong, the Agency claims that the Arbitrator erroneously found that the 3-month evaluation it held did not constitute a mid-year review. The Agency also disagrees with the Arbitrator's finding that there was no evidence to indicate the Agency's dissatisfaction with the grievant's performance. With respect to the test's second prong, the Agency claims that the Arbitrator based his decision to raise the grievant's ratings solely on his finding that there was no evidence to indicate diminished performance.
The Agency also contends that the award's remedy, which raises the grievant's disputed ratings, is contrary to an Agency regulation. Specifically, the Agency claims that the remedy is contrary to DLAR 1434.1, paragraph VI.J.3., which places the burden on an employee grieving one or more critical elements rated at the "fully successful" level or above to establish that the employee's performance merits a higher rating.(4) The Agency asserts that the grievant presented no evidence relating to her performance. Further, the Agency contends that, in imposing his remedy, the Arbitrator exceeded his authority by revising the provisions of DLAR 1434.1.
The Union asserts that the "essence" of the Agency's exception is that the award is contrary to the two-prong test established in SSA I. Opposition at 1. The Union contends that the award satisfies both prongs of the test. With respect to the first prong, the Union asserts that the Arbitrator properly found that the Agency failed to conduct a mid-year review as required by DLAR 1434.1. The Union states that, as testified to by an Agency witness, the 3-month evaluation was conducted to provide the grievant with her performance plan in accordance with DLAR 1434.1, paragraph VI.A.6.(5) Concerning the second prong, the Union notes that the Arbitrator found that there was no evidence in the record to indicate diminished performance on the part of the grievant. Therefore, the Union asserts that the Arbitrator was entitled to conclude that "earlier performance ratings are indicative of present performance." Id. at 3 (citing U.S. Department of Health and Human Services, Social Security Administration, Boston Region, Office of Program Integrity and Reviews and American Federation of Government Employees, Local 3760, 46 FLRA 1147 (1993) (DHHS)).
A. Analytical Framework
In U.S. Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C. and National Treasury Employees Union, Chapter 201, 53 FLRA No. 21 (1997) (BEP), we revised the two-prong test set forth in SSA I and described in SSA II for determining whether an arbitration award resolving a performance appraisal grievance impermissibly affects management rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute. This revision is based upon the plain wording of section 7106 of the Statute and the Supreme Court's decision in Internal Revenue Service v. FLRA, 494 U.S. 922 (1990). BEP, slip op. at 7. In BEP, we recognized that, with a limited exception,(6) an arbitrator's award that affects management rights under section 7106(a)(2) may provide a remedy only in two circumstances: first, for a violation of applicable law, within the meaning of section 7106(a)(2); or second, for a violation of a contract provision that comes within the scope of section 7106(b), which constitutes an exception to section 7106(a). Id. at 7-8.
Under prong I of the BEP analysis, an arbitrator may cancel a performance rating only if management applied the established performance standards for that job element in violation of either an applicable law or a provision of the parties' collective bargaining agreement on a section 7106(b) matter. Id. at 8. In addition, an arbitrator may cancel a rating only if the violation affected the rating. Id.
Under prong II of the BEP analysis, the remedy awarded must reflect a reconstruction of what management's appraisal of the grievant would have been if management had not violated either an applicable law or a provision of the parties' agreement on a section 7106(b) matter. Id. at 9. When the arbitrator is unable to reconstruct what the grievant's rating would have been had management acted properly, the arbitrator must remand the case to management for it to reevaluate the grievant's performance. Id.
B. Application of BEP Analytical Framework
1. Prong 1
Pursuant to prong I of the BEP analysis, as relevant here, the Arbitrator could properly cancel the grievant's disputed ratings only if he enforced Article 16, and the incorporated provisions of DLAR 1434.1 on which he relied to cancel the ratings (paragraphs VI.B.1. and VI.B.2.), consistent with section 7106(b) of the Statute.(7) We conclude that Article 16, as interpreted and applied by the Arbitrator, constitutes an arrangement within the meaning of section 7106(b)(3) of the Statute that was enforced by the Arbitrator consistent with Department of the Treasury, U.S. Customs Service and National Treasury Employees Union, 37 FLRA 309 (1990) (Customs Service). Under Customs Service, an arbitrator's enforcement of an arrangement is not contrary to management rights unless the enforcement would abrogate the exercise of a management right. BEP, slip op. at 8 n.8.
As interpreted and applied by the Arbitrator, Article 16 and the incorporated provisions of DLRA 1434.1 on which he relied to cancel the disputed ratings required the grievant's supervisor to timely hold a mid-year review and to inform the grievant of any dissatisfaction the supervisor had with respect to her work performance prior to relying on such dissatisfaction in rating the grievant's performance. As such, Article 16 is substantially similar to the provision found by the Authority in BEP to constitute an arrangement within the meaning of section 7106(b)(3) of the Statute that did not abrogate management's section 7106(a) rights. BEP, slip op. at 10. For the reasons set forth in BEP, we find that Article 16, as enforced by the Arbitrator, is an arrangement that reserves to management the right to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute--that is, the right to evaluate all performance under established performance standards as to which employees have been informed they will be appraised. See id. Therefore, the Arbitrator enforced Article 16 consistent with section 7106(b)(3), and the Arbitrator's cancellation of the grievant's disputed critical element ratings is not contrary to law.
The Agency claims that it provided the Arbitrator with evidence that it informed the grievant of its dissatisfaction with her work. We construe the Agency's claim as an assertion that the award is based on a nonfact, and find that this claim is without merit. 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). However, we will not find an award deficient on the basis of an arbitrator's determination on any factual matter that the parties disputed at arbitration. Id. at 594 (citing Mailhandlers v. U.S. Postal Service, 751 F.2d 834, 843 (6th Cir. 1985)). The Agency's claim that it informed the grievant of its dissatisfaction with her work was asserted before the Arbitrator and rejected. Therefore, such a claim provides no basis for finding the award deficient. E.g., American Federation of Government Employees, Local 2142 and U.S. Department of the Army, Corpus Christi Army Depot, Corpus Christi, Texas, 52 FLRA 739, 743 (1996) and cases cited therein.
In summary, because the Arbitrator found that the Agency applied the grievant's established elements and standards in violation of an agreement provision enforceable as an arrangement pursuant to section 7106(b)(3), and such enforcement did not abrogate management's rights under section 7106(a)(2)(A) and (B), we conclude that he properly canceled the grievant's ratings for critical elements three and four.
2. Prong II
Nothing in the Arbitrator's award supports a conclusion that the Arbitrator's remedy raising the grievant's ratings in critical elements three and four was based on a reconstruction of what the Agency would have rated the grievant if the Agency had not violated the provisions of Article 16. The Arbitrator did not find that the record supported raising the grievant's ratings in critical elements three and four to "highly successful." Rather, he simply concluded that because the Agency failed to indicate diminished performance on the part of the grievant from the previous year, she should be rated at the "highly successful" level for the critical elements in dispute.(8) We conclude that the remedy is not based on a reconstruction and, therefore, is deficient as contrary to section 7106(a)(2)(A) and (B) of the Statute. Consequently, we modify the award to require the Agency to properly reevaluate the grievant in accordance with the parties' agreement.(9)
The Arbitrator's award is modified to delete the portion of the award that directs the Agency to rate the grievant "highly successful" on critical elements three and four for the disputed rating period and to substitute the following:
The Agency will reevaluate the grievant for the disputed rating period to determine the ratings she would have received in critical elements three and four if the Agency had rated her only on the basis of information regarding her work performance that it had previously communicated to her.
(If blank, the decision does not have footnotes.)
1. The Agency did not file exceptions to the portion of the award involving Grievant No. 1. Hereinafter, Grievant No. 2 will be referred to as "the grievant."
2. In making his determinations, the Arbitrator relied on provisions in DLAR 1434.1, paragraph VI.B., which sets forth the procedures for discussing performance with employees. Paragraph VI.B.1. provides as follows:
Performance appraisal is a continuing process that must involve periodic discussions between the supervisor and the employee. Each discussion need not cover all aspects of performance, but cumulatively they should inform the employee how he/she is doing in relation to the performance plan requirements.
DLAR 1434.1, paragraph VI.B.2., provides in relevant part that "[p]erformance must be discussed with each employee at least twice a year[:] one mid-period discussion and one summary discussion at the end of the appraisal year when performance is rated."
3. Social Security Administration and American Federation of Government Employees, AFL-CIO, 30 FLRA 1156, 1160-61 (1988) (SSA I); U.S. Department of Health and Human Services, Social Security Administration and American Federation of Government Employees, Local 1122, 34 FLRA 323, 328 (1990) (SSA II).
4. DLAR 1434.1, paragraph VI.J.3. provides, in relevant part, as follows: "The expected norm of performance is the Fully Successful level. . . . [W]hen the employee grieves one or more critical elements rated at the Fully Successful level or above, the burden of proof rests with the employee to show that performance merits the higher rating that is requested."
5. DLAR 1434.1, paragraph VI.A.6. provides, in relevant part, that
[t]itle 5, U.S.C., [s]ection 4302[(b)](2) requires that performance plans be communicated in writing to employees at the beginning of each appraisal period. Therefore, each PMS [Performance Management System] employee must be given a copy of the performance plan for his/her position at the beginning of each appraisal period (regardless of whether or not the plan has been revised at that time), upon initial entry to the position, or when the plan is substantially revised.
(Emphasis supplied in original.)
6. For the reasons discussed in BEP at note 7, matters involving official time under section 7131(d) of the Statute are subject to the "carve-out" doctrine and, as such, constitute a separate exception to the exercise of management rights under section 7106(a).
7. When a collective bargaining agreement incorporates the regulations with which an award allegedly conflicts, the matter becomes one of contract interpretation because the agreement, not the regulation, governs the matter in dispute. American Federation of Government Employees, Council 236 and General Services Administration, 47 FLRA 576, 580 (1993). Therefore, because Article 16 expressly incorporates DLAR 1434.1, we must examine the Arbitrator's interpretation of the wording of the regulation to determine whether Article 16 constitutes a matter covered under section 7106(b) of the Statute. Cf. U.S. Department of Justice, Federal Bureau of Prisons, United States Penitentiary, Leavenworth, Kansas and American Federation of Government Employees, Council of Prisons, Local 919, 53 FLRA No. 7, slip op. at 4 (1997) (where a provision of a collective bargaining agreement expressly incorporates the language of an agency regulation, we examine the wording of that regulation to determine whether an arbitrator's award draws its essence from the agreement).
8. The Union's reliance on DHHS to support its claim that the Arbitrator properly raised the grievant's ratings is misplaced. The arbitrator in DHHS determined that the record supported finding the grievant in that case would have received higher ratings by the appraising agency had it not violated the contract. DHHS, 46 FLRA at 1151. In contrast, in the instant case, the Arbitrator did not, based on the record before him, determine what ratings the grievant would have received from the Agency in each disputed element had no contract violations occurred.
9. In light of our conclusion modifying this portion of the award, we find it unnecessary to address the Agency's remaining exceptions, which also assert that the portion of the award raising the disputed ratings is deficient.