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The decision of the Authority follows:
53 FLRA No. 115
FEDERAL LABOR RELATIONS AUTHORITY
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
February 19, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members.
Decision by Member Cabaniss for the Authority
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Elizabeth Bartholet 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 Arbitrator denied a grievance challenging the Agency's determination that certain employees were required to submit confidential financial disclosure reports. The Arbitrator found that the grievance was not arbitrable.
For the following reasons, we conclude that the Arbitrator's ruling that the grievance was not arbitrable is deficient. We remand the case to the parties and, absent settlement, direct them to request the Arbitrator to render a decision on the merits of the grievance.
II. Background and Arbitrator's Award
The Office of Government Ethics (OGE) promulgated regulations in 1992 establishing a confidential financial reporting system. 57 Fed. Reg. 11,826 (1992), codified at 5 C.F.R. Part 2634, Subpart I--Confidential Financial Disclosure Reports. Pursuant to these regulations, the Agency determined that certain bargaining unit employees must submit confidential financial disclosure reports describing their financial interests. Subsequently, pursuant to 5 C.F.R. § 2634.906,(1) the employees filed complaints with the designee of the Agency head alleging that the Agency had improperly determined that their positions require the submission of such reports. The designee of the Agency head denied the complaints.
The employees then filed a grievance under the parties' negotiated grievance procedure, contesting the Agency's determination that the employees were required to submit such reports. The Agency denied the grievance on the ground that it was barred by the last sentence of section 2634.906, which states that "[a] decision by the agency head or designee regarding the complaint shall be final." The grievance was submitted to arbitration.
The Arbitrator denied the grievance "on the ground that the issues presented are not arbitrable." Award at 5. The Arbitrator first noted that the provisions of the parties' collective bargaining agreement governing standards of conduct relevant to financial disclosure matters indicate that to the degree there is a conflict between the agreement and any Government-wide regulation, the Government-wide regulation governs.(2) The Arbitrator then determined that although the language of the pertinent Government-wide regulation--the last sentence of section 2634.906--is "not entirely unambiguous," it "indicates that the intent is to preclude grievance proceedings." Id. at 3. She stated that the regulation "use[s] the finality term in the context of discussing the review of complaints, rather than some more general context; in making the agency head's decision final with respect to complaints, the apparent purpose was to preclude resort to the usual avenue for pursuing complaints." Id.
The Arbitrator also stated that the history of the regulation supports this interpretation. She noted that section 2634.906 superseded the Agency's previously applicable regulations, which had provided employees the right to review confidential filing status through the Agency's administrative (as distinct from the negotiated) grievance procedure. In the Arbitrator's view, OGE presumably would have similarly provided for such grievance processing had that been the intent underlying section 2634.906.
The Arbitrator concluded that, "[g]iven this interpretation of the OGE Regulations," the grievance is not arbitrable because the agreement makes clear that to the degree there is a conflict between its provisions on financial disclosure matters and any Government-wide regulation, the latter prevails. Id.
III. Positions of the Parties
A. Union's Exceptions
The Union contends that the award is contrary to law, rule, or regulation because section 2634.906 does not preclude grievances and arbitration over the alleged violation, misrepresentation, or misapplication of OGE regulations. According to the Union, section 2634.906 does not address review of an agency's decision under a negotiated grievance procedure.
The Union asserts that the term "final" in the last sentence of the regulation "only refers to the finality of the agency's deliberative action as to the decision itself, rather than the reviewability of that decision by others." Exceptions at 12. The Union cites examples in Federal personnel law where decisions that are deemed "final" are nonetheless subject to review by another authority. The Union contends that the "statutory authorization for a union to grieve violations, misapplication, or misinterpretation of Government-wide regulations is not negated merely by the statement in the regulations that an agency decision 'shall be final.'" Id. at 14. The Union also submits that instead of "acknowledging the Statute's preference for a broad scope grievance procedure, the award presumes that the statutory policy may be negated solely by the word 'final.'" Id. at 16.
According to the Union, this case is different from decisions holding that Office of Management and Budget Circular A-76 (the OMB Circular) is a Government-wide regulation that bars subjecting disputes over compliance with the OMB Circular to a negotiated grievance procedure.(3) In this regard, the Union contends that the language of the OMB Circular shows that its drafters intended that such disputes be precluded from arbitration,(4) whereas section 2634.906 does not contain clearly expressed language demonstrating an intent to preclude arbitral review. The Union also notes that the Federal Register notice promulgating section 2634.906 did not suggest that the section was intended to preclude arbitral review of alleged violations of OGE regulations.
Further, the Union contends that the Arbitrator erred in giving weight to the fact that OGE's regulations superseded HUD's previously-applicable regulations. Those regulations had permitted employees to challenge their designation as a confidential filer through the Agency's administrative grievance procedure. The Union states that "agency grievance procedures (authorized by 5 C.F.R. Part 771) have no applicability to the rights of bargaining unit employees under a negotiated grievance procedure." Exceptions at 19.
Finally, the Union contends that, even if section 2634.906 were read to bar grievances under the negotiated grievance procedure challenging confidential filer designations, it could not lawfully do so in light of the Statute's provisions authorizing grievances over regulatory matters. Therefore, according to the Union, the regulation would be void and could not operate to infringe on the Union's right to file a grievance over financial disclosure issues.
B. Agency's Opposition
The Agency contends that section 2634.906 precludes the filing of a grievance under the parties' negotiated grievance procedure. The Agency distinguishes the examples relied on by the Union on the ground that each includes an express right of appeal, and section 2634.906 does not include an express right of appeal. The Agency contrasts the language in section 2634.906--that the decision "shall be final"--with the Union's examples, which state that "final" decisions may be appealed.
According to the Agency, the only plausible interpretation of section 2634.906 is that it precludes employee challenges beyond the review process set forth in the regulation. In the Agency's view, there would have been no need for the review process established by the regulation if employees could use either the negotiated grievance process or the Agency's administrative grievance process to challenge their confidential filing status. The Agency submits that it makes no sense to afford a lower-level Agency official the opportunity, through the negotiated grievance process, to reverse the decisions of the Agency's management official.
IV. Analysis and Conclusions
A. Standard of Review
Section 7122(a)(1) of the Statute provides in pertinent part that an arbitration award will be found deficient if it conflicts with any law, rule, or regulation. As the exceptions involve the award's consistency with regulation, the questions of law raised by the Arbitrator's award and the Union's exceptions must be reviewed 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)).
The Union is challenging the Arbitrator's substantive arbitrability determination that the grievance is not arbitrable under the parties' agreement. The Arbitrator interpreted the agreement to mean that if section 2634.906 dictates that there will be no negotiated grievance procedure available, then section 2634.906 supersedes the agreement provision that would otherwise allow unit employees to grieve disputes over the interpretation and application of the standards of conduct. No exception has been taken to this interpretation of the parties' agreement by the Arbitrator.
As a result of this interpretation of the parties' agreement, the Arbitrator was required to determine the meaning of section 2634.906. The Union challenges the Arbitrator's determination. As noted above, we review this determination de novo.
B. Relevant Authority precedent
Under section 7121 of the Statute, with exceptions not pertinent here, "negotiated grievance procedures were intended to be the exclusive procedures for resolving disputes within their coverage unless the statutory or internal agency appeal procedure involved was intended to be the exclusive procedure for resolving the matter." National Treasury Employees Union, Chapter 15 and Internal Revenue Service (Los Angeles District), 33 FLRA 229, 235 (1988) (NTEU) (discussing Department of Defense Dependents Schools and Overseas Education Association, 22 FLRA 142 (1986)). "[W]here laws other than the Statute limit the scope of negotiated grievance procedures, there have been clear, specific indications that the statutory procedures were intended to be exclusive." Id.; see also Fort Carson, 48 FLRA at 206.
Where a statute states that an appeals procedure takes effect "notwithstanding" any other law, such a statute constitutes a clear, specific indication that the statutory procedure is intended to be exclusive. For example, Pub. L. No. 87-797, 76 Stat. 907 (1962) states: "Notwithstanding the provisions of this or any other law, the decision of the Secretary on appeal with respect to fines and suspensions within the limits authorized by this Act shall be final and conclusive." The Authority found that this language demonstrated congressional intent to establish that the Secretary of Interior's decision on appeal from summary hearings or trial boards involving disciplinary actions against U.S. Park Police concerning minor infractions was final and conclusive, and thereby precluded use of the negotiated grievance and arbitration process. See Police Association of the District of Columbia and Department of the Interior, National Park Service, U.S. Park Police, 18 FLRA 348, 352-56 (1985).
Similarly, in Illinois National Guard v. FLRA, 854 F.2d 1396, 1402 (D.C. Cir. 1988), the court held that the National Guard Technician's Act, which allows an agency head to prescribe hours of duty for technicians "notwithstanding any other provision of law," did not allow such determinations to be challenged through the negotiated grievance procedure. In Colorado Nurses Association v. FLRA, 851 F.2d 1486 (D.C. Cir. 1988), the court held that an agency's authority under 38 U.S.C. § 4108, which used similar language, to prescribe conditions of employment of employees in the Department of Medicine and Surgery is exclusive and is not subject to challenge through the negotiated grievance procedure.
Even where a law or regulation does not use such "notwithstanding" language, the Authority will find matters excluded from the negotiated grievance process if the expressed intent to do so is unmistakable. Thus, in Fort Carson, 48 FLRA at 206, the Authority noted that the court in IRS held that "'[t]he regulation [the Supplement to OMB Circular A-76] sets out an exclusive method of resolving any claims regarding its implementation and forbids negotiation or arbitration over the process or decisions issuing from the process'" (citation omitted).(5)
However, where the exclusivity of an appeals procedure concerning certain challenges to an agency's conditions of employment decision is not established by the plain wording of a law, or its accompanying legislative history, the Authority has found that the negotiated grievance process is available. For example, the Authority held that nothing in the Debt Collection Act of 1982, 5 U.S.C. § 5514, including the provision for a "final decision" by a hearing officer, precludes a grievance over a determination of indebtedness or limits the authority of an arbitrator to review such a determination. See National Federation of Federal Employees, Local 29 and U.S. Army Corps of Engineers, Kansas City District, Kansas City, Missouri, 32 FLRA 721, 727-28 (1988). Similarly, the Authority held that nothing in the Contract Disputes Act of 1978, 41 U.S.C. §§ 601-613, precludes individuals employed as teachers under 20 U.S.C. § 241 from negotiating a grievance procedure to address disputes over any matter relating to the employment of the employee or any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment. See Fort Knox Teachers Association and Board of Education of the Fort Knox Dependents Schools, 27 FLRA 203, 207-08 (1987).
C. Section 2634.906 Does Not Bar Grievances Under the Parties' Negotiated Grievance Procedure Challenging the Agency's Determination that an Employee Must Submit a Confidential Financial Disclosure Report
The question for de novo determination is whether, considering the precedent set forth above, section 2634.906 dictates that the negotiated grievance procedure is not available for the grievance in this case. The key question is whether the word "final" in the last sentence of section 2634.906 means final prior to any otherwise available review outside the agency review process, as the Union argues, or final in the sense of precluding any further review after the conclusion of the agency review process, as the Agency argues.
As the Arbitrator properly recognized, the language of the regulation is "not entirely unambiguous." Award at 3. The plain wording of section 2634.906 and the supplementary information accompanying its promulgation do not contain "clear, specific indications that the . . . procedures were intended to be exclusive." NTEU, 33 FLRA at 235. For the reasons set forth below, we conclude that, consistent with Authority precedent, the regulation does not establish an exclusive procedure and the negotiated grievance procedure is available to pursue complaints about the regulation's application.
First, nothing in the plain wording of section 2634.906 demonstrates the OGE's intent to preclude subjecting to the negotiated grievance process the Agency's confidential filing determinations with respect to unit employees. As relevant here, the regulation simply states that the "decision by the agency head or designee regarding the complaint is final." In the absence of any evidence of a contrary intent, it is reasonable to conclude that this means that the decision of the agency head is final with respect to the appeal process it describes. Contrary to the Agency's argument, nothing in the sentence, or the regulation as a whole, suggests that the sentence addresses whether an agency head's final decision in an administrative process is otherwise subject to other appeal or review processes. Accordingly, application of the precedent cited above indicates that, based solely on consideration of the wording of the regulation, an agency head's final decision with respect to an employee's confidential filing status is not immune from challenge by a union through the negotiated grievance procedure.
Second, the supplementary information that accompanied the publication of section 2436.906 also does not establish the exclusivity of the procedure. Rather, the supplementary information does not provide further information that is relevant in this regard. See 57 Fed. Reg. 11,800-04 (1992). Additionally, nothing pertinent appears in the authorities listed at 5 C.F.R. § 2634.101, pursuant to which section 2634.906 was issued.(6) In sum, nothing in these additional authorities suggests that section 2634.906 was intended by OGE to preclude the filing of a grievance under a negotiated grievance procedure challenging an agency's determination with regard to a unit employee's status as a confidential filer.(7)
Moreover, as a matter of policy, doubts as to whether a matter is covered by a negotiated grievance procedure should be resolved in favor of such coverage. See American Federation of Government Employees, Locals 225, 1504, and 3723, AFL-CIO v. FLRA, 712 F.2d 640, 649 (D.C. Cir. 1983) (if impasse is reached on bargaining on the scope of the negotiated grievance procedure, the Federal Service Impasses Panel is to impose a broad scope grievance procedure unless the limited-scope proponent can persuade it to do otherwise; the court would expect the Panel "to rule against a proponent of a limited procedure who fails to establish convincingly that, in the particular setting, its position is the more reasonable one").
The Agency's arguments in support of the position that the regulation dictates that the negotiated grievance procedure is unavailable are not persuasive. First, the argument that section 2634.906 should be read to preclude use of the negotiated grievance procedure because the regulation superseded the previously applicable Agency regulation lacks merit.(8) The Agency regulation concerned the applicability of the Agency's administrative grievance procedure, not the negotiated grievance procedure. In particular, the regulation previously provided an agency grievance procedure to challenge confidential filing status determinations; it made no mention of the negotiated grievance procedure. As such, the Agency regulation simply is not relevant to the resolution of the issue before us.
The Agency's claim that the construction of the term "final" argued by the Union is implausible also is not persuasive. Under section 7121 of the Statute, parties are free to structure negotiated grievance procedures as they see fit, subject only to the requirements set forth in section 7121. See U.S. Department of the Navy, United States Marine Corps Headquarters and American Federation of Government Employees, Council 240, 37 FLRA 1304, 1308-09 (1990). Negotiated grievance procedures may require grievances to be processed through steps that provide for review by lower-level agency officials of decisions of other management officials, if the parties decide to establish their particular grievance procedure in this manner.(9)
Accordingly, in the instant case, where, as the Arbitrator concluded, the meaning of the regulation is not entirely unambiguous, the doubt as to whether the grievance is covered by a negotiated grievance procedure must be resolved in favor of such coverage. Having made this determination, we conclude that the regulation does not require exclusion of the grievance from the parties' negotiated grievance procedure, and that the grievance is arbitrable. We remand the case to the parties and, absent settlement, direct them to request the Arbitrator to render a decision on the merits of the grievance. See, e.g., National Federation of Federal Employees, Local 1636 and U.S. Department of Defense, National Guard Bureau, Albuquerque, New Mexico, 48 FLRA 511, 515 (1993).
The award is set aside. The case is remanded to the parties and, absent settlement, they are directed to request the Arbitrator to render a decision on the merits of the grievance.(10)
(If blank, the decision does not have footnotes.)
1. 5 C.F.R. § 2634.906 (section 2634.906) states:
The head of each agency, or an officer designated by the head of the agency for that purpose, shall review any complaint by an individual that his position has been improperly determined by the agency to be one which requires the submission of a confidential financial disclosure report pursuant to this subpart. A decision by the agency head or designee regarding the complaint shall be final.
2. Section 4.10(1) of the parties' agreement states, in relevant part:
To the extent that any provision of this Agreement conflicts with any provision of the Department's Standards of Conduct, other than a provision dictated by Governmentwide law, rule, or regulation . . . this Agreement shall prevail.
Section 4.03 of the parties' agreement states, in pertinent part, that "[a]n employee may grieve any matter relating to employment or any dispute over the interpretation or application of the Standards of Conduct."
3. The Union references the court's decision in United States Department of the Treasury, Internal Revenue Service v. FLRA, 996 F.2d 1246, 1250 (D.C. Cir. 1993) (IRS), and the Authority's adoption of that decision in American Federation of Government Employees, Local 1345 and U.S. Department of the Army Headquarters, Fort Carson and Headquarters, 4th Infantry Division, Fort Carson, Colorado, 48 FLRA 168, 206 (1993) (Fort Carson).
4. The Union relies on the following language from OMB Circular A-76:
The procedure does not authorize an appeal outside the agency or a judicial review. . . . Since the appeal procedure is intended to protect the rights of all directly affected parties -- Federal employees and their representative organizations, and bidders or offerors on the instant solicitation -- the procedure and the decision upon appeal may not be subject to negotiation, arbitration, or agreement.
Part i of the Supplement, Paragraphs i.2 and i.7. This language was subsequently revised, as discussed below in note 5.
5. Effective March 27, 1996, OMB revised the Supplemental Handbook. See American Federation of Government Employees, Local 1513 and U.S. Department of the Navy, Naval Air Station, Whidbey Island, Washington, 52 FLRA 717, 722 n.4 (1996). The revisions indicate OMB's intent to maintain the exclusivity of an agency's internal administrative appeals process for challenging an agency's contracting-out determination. OMB stated:
The Circular and this Supplement are not intended and should not be construed to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers or any person. It should not be construed to create any substantive or procedural basis on which to challenge any agency action or inaction, except as set forth in Part i, Chapter 3, Paragraph K, of this Supplement.
OMB Circular A-76--Revised Supplemental Handbook, Introduction p. iii (March 1996). See also American Federation of Government Employees, Local 1770 and U.S. Department of the Army Headquarters, XVIII Airborne Corps and Fort Bragg, Fort Bragg, North Carolina, 52 FLRA 1348 (1997).
6. See, e.g., Ethics in Government Act of 1978, as amended by the Ethics Reform Act of 1989, 5 U.S.C. App. and Executive Order 12,674 (1989), as modified by Executive Order 12,731 (1990).
7. In this regard, we note that if the regulation had been intended to preclude use of the negotiated grievance procedure, it could have been drafted to clearly and expressly set forth this intent. Cf. Fort Carson, 48 FLRA at 206.
8. The Agency promulgated the regulation in 1987. The regulation permitted an employee to grieve, through the Agency grievance procedure, a determination that the employee's position required the employee to submit a confidential statement of employment and financial interest. That regulation continued in effect until May 6, 1996, when the Agency abolished most of the regulations at 24 C.F.R. Part 0, except for § 0.2 "Outside employment and other activities" and § 0.3 "Financial interests." On July 9, 1996, the Agency published Supplemental Standards of Ethical Conduct for Employees of the Department at 5 C.F.R. Part 7501. These regulations supplement the Standards of Ethical Conduct for Employees of the Executive Branch contained in 5 C.F.R. Part 2635. Today, 24 C.F.R. Part 0 contains a cross-reference to the executive branch-wide standards of ethical conduct at 5 C.F.R. Part 2635 and the Department's supplemental regulations at 5 C.F.R. Part 7501, plus §§ 0.2 and 0.3.
9. We also find that the examples of other statutory provisions in Federal personnel law relied on by the Union and distinguished by the Agency are not helpful in resolving the matter before us in this case. As set forth above, our inquiry focuses on the plain wording of section 2634.906 and the supplementary information accompanying its promulgation to determine whether there are clear, specific indications that the procedures set forth in the regulation were intended to be exclusive.
10. In light of this determination, we do not address the Union's contention that even if section 2634.906 were read to bar grievances under the negotiated grievance procedure challenging confidential filer designations, it could not lawfully do so in light of the Statute's provisions authorizing grievances over regulatory matters.