54:0506(53)AR - - DOT, FAA, NY Therminal Radar Control Facility, Westbury, NY and National Air Traffic Controllers Association [ DOT = Department of Transportaion, FAA = Federal Aviation Administration ] - - 1998 FLRAdec AR - - v54 p506
[ v54 p506 ]
The decision of the Authority follows:
54 FLRA No. 53
FEDERAL LABOR RELATIONS AUTHORITY
U.S. DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
NEW YORK TERMINAL RADAR CONTROL FACILITY
WESTBURY, NEW YORK
NATIONAL AIR TRAFFIC CONTROLLERS ASSOCIATION
June 30, 1998
Before the Authority: Phyllis N. Segal, Chair; Donald S.
Wasserman and Dale Cabaniss, Members.
Decision by Member Wasserman for the Authority
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Irwin J. Dean, Jr. 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 a grievance challenging the Agency's denial of a pay differential to grievants who accepted jobs in reliance upon such pay that was described in a vacancy announcement but which was terminated before they were selected for the jobs. As a remedy, the Arbitrator ordered that the grievants be awarded backpay. For the following reasons, we conclude that the award is deficient because it is contrary to law. Accordingly, we strike the order that the grievants be awarded backpay and remand the award for consideration of an appropriate remedy.
II. Background and Arbitrator's Award
The Office of Personnel Management (OPM) approved a demonstration project that was conducted by the Agency.(1) The purpose of the project was to test the effectiveness of incentive pay in recruiting and retaining experienced, qualified employees in designated occupations, such as air traffic controllers, in certain hard-to-staff facilities, such as the New York Terminal Radar Control facility (TRACON). Under the project, air traffic controllers who accepted new assignments in the New York TRACON, or who remained at that facility, were entitled to a pay differential of twelve percent over their scheduled base pay (demonstration project pay).(2) The project took effect on June 18, 1989 and, by its terms, expired on June 17, 1994. See 54 Fed. Reg. 10200.
The Agency required each air traffic controller who was selected for the demonstration project at New York TRACON to satisfy certain training requirements after his or her arrival at that facility. In July 1989, the Agency and the Union entered into a memorandum of understanding (MOU) that addressed the impact and implementation of the project. The MOU provided, among other things, that the Agency would provide moving expenses from "permanent change of station funds" in the event that a selectee failed to satisfy training requirements after his or her arrival at a facility and, as a result, sought to be relocated to another facility. Award at 25. The MOU was effective only for the duration of the pay demonstration project.
Although the demonstration project was scheduled to end on June 17, 1994, the Agency's budget request to Congress for fiscal year 1994 proposed to terminate the demonstration project effective the end of September 1993. In this regard, on September 28, 1993, the Agency's director of personnel circulated a memorandum to all human resource management officers. In the memorandum, the director of personnel directed that vacancy announcements for positions participating in the project include a cautionary statement alerting applicants that pay demonstration funds may not be available for those positions.(3) However, Congress determined not to terminate the demonstration project prior to its scheduled conclusion.
In April 1994, the Agency circulated a vacancy announcement, inviting applications to be submitted between April 5, 1994, and April 26, 1994, for several air traffic controller positions at New York TRACON. The vacancy announcement indicated that selected employees would be eligible for demonstration project pay. However, the vacancy announcement did not contain the cautionary statement, as directed by the director of personnel, that pay demonstration funds may not be available for positions participating in the program.
On June 1, 1994, in section 401 of Pub. L. No. 103-260, 108 Stat. 702-703, Congress established "grandfather provisions" for the demonstration project. Section 401 of Pub. L. No. 103-260, 108 Stat. 702-703 provides that, after the termination of the demonstration project, demonstration project pay would continue, and gradually be phased out, "to those employees who are entitled to [demonstration project pay] under the demonstration project as of June 16, 1994." Subsequently, the project terminated on June 17, 1994.
In applying for the positions at New York TRACON, the grievants relied on the language in the vacancy announcement that indicated that selected employees would be eligible for demonstration pay, and that did not reference any cautionary statement regarding the availability of funds for such pay. Although the Agency circulated the vacancy announcement in April 1994 when the demonstration project was still in effect, the Agency did not "select" the grievants until August 10, 1994, after the termination of the project. Award at 17. Prior to their arrival at New York TRACON, the Agency did not inform the grievants that demonstration project pay promised in the vacancy announcement would not be available. When the grievants reported to work at New York TRACON, the Agency refused them that pay on the grounds that they had been selected after the termination of the project. Further, the Agency denied relocation expenses from "permanent change of station" funds to grievants who had failed to satisfy training requirements after their arrival at that facility and, as a result, sought to be relocated to another facility.
The Union filed a grievance, alleging that the Agency had "violated applicable law, rule and regulation by failing to make necessary amendments to the vacancy announcement and by failing to notify the selected individuals prior to their transfer" to New York TRACON about the pay limitations. Award at 5. As a remedy, the Union requested that the Agency pay the grievants demonstration project pay. In addition, the Union sought relocation expenses for grievants who had failed to satisfy training requirements after their arrival at that facility and, as a result, sought to be relocated to another facility.
The grievance was submitted to arbitration. The Arbitrator framed the issue as:
Was the [e]mployer correct in its decision to deny all monies and benefits associated with the pay demonstration project in accordance with applicable laws, rules, regulations, policies, practices, agreements, understandings, and the [c]ollective [b]argaining [a]greement, and, if not, what shall the appropriate remedy be?
Id. at 14-15.
The Arbitrator sustained the grievance in part. The Arbitrator concluded that, under the Back Pay Act, 5 U.S.C. 5596, the grievants were entitled to the demonstration project pay described in the vacancy announcement. The Arbitrator stated that the courts have held that the Back Pay Act provides a remedy for employees who have been subjected to "procedural irregularities". Award at 24. In support, the Arbitrator cited Crimaldi v United States, 651 F.2d 151 (2d Cir. 1981).
The Arbitrator noted that the Agency's local personnel representatives failed to include in the vacancy announcement, as directed by the Agency's personnel director, the cautionary language that funds may not be available for demonstration project pay. The Arbitrator found that as a result of the Agency's local personnel representatives' failure to do so, the vacancy announcement contained erroneous information about compensation upon which the grievants relied to their detriment. Consequently, the Arbitrator concluded that the Agency's local personnel representatives' failure to include the cautionary language in the vacancy announcement was "in direct contravention of internally adopted [Agency] policies" and, thus, constituted a "significant procedural error." Award at 24-25. As a remedy, the Arbitrator ordered the Agency to pay the grievants demonstration project pay.
The Arbitrator found that the Supreme Court's decision in Office of Personnel Management v. Richmond, 496 U.S. 414 (1990) (Richmond) was distinguishable from this case. The Arbitrator found that in that case, the erroneous information supplied to a Federal retiree by a Federal employee was done so innocently. In contrast, in this case, the Arbitrator concluded that the erroneous information supplied to the grievants by Agency's local personnel representatives was done so in direct contravention of agency policy.
Although the Arbitrator concluded that the grievants were entitled to demonstration project pay, he rejected the Union's request for relocation expenses for grievants who had failed to satisfy training requirements after their arrival at New York TRACON and, as a result, sought to be relocated to other facilities. The Arbitrator found that the Union based its request only on the MOU concerned with the impact and implementation of the demonstration project. Noting that the application of that agreement was limited to the duration of the pay demonstration project, the Arbitrator concluded that the MOU could not be the basis of relocation expenses for the grievants because that agreement had expired before the grievants had been selected.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the arbitration award is contrary to the Back Pay Act. The Agency asserts that, under the Back Pay Act, back pay may be awarded only if an employee is "legally entitled" to the lost pay. Exceptions at 4. The Agency argues that, because they did not report to work at New York TRACON until after the expiration of the pay demonstration project, the grievants did not meet the legal requirements to receive the demonstration project pay.
The Agency also contends that the award is inconsistent with the Supreme Court's decision in Richmond. The Agency asserts that in Richmond, the Supreme Court held that misinformation provided by an agency cannot operate to confer a benefit that is not otherwise authorized by law. The Agency argues that in this case the erroneous information provided by the Agency did not create an entitlement to the demonstration project pay because it was no longer authorized by law.
B. Union's Opposition
The Union asserts that the award of demonstration project pay is consistent with the Back Pay Act. The Union adds that the Supreme Court's decision in Richmond does not preclude that award. The Union maintains that, in any event, the Agency now has the latitude to provide the requested pay to the grievants because it has implemented a different personnel system and initiated another pay incentive program for New York TRACON.
IV. Analysis and Conclusions
A. Requirements of the Back Pay Act
Where an agency's exception involves the award's consistency with law, we review the questions of law raised by the agency's exception and the Arbitrator's award de novo. See 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 Authority has held that under the Back Pay Act, an award of backpay is authorized only when an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; (2) the personnel action directly resulted in the withdrawal or reduction of the grievant's pay, allowances or differentials; and (3) but for such action, the grievant otherwise would not have suffered the withdrawal or reduction. U.S. Department of Justice, Immigration and Naturalization Service, San Diego, California and American Federation of Government Employees, National Immigration and Naturalization Service Council, 51 FLRA 1094, 1097 (1996) (citing American Federation of Government Employees, Local 31 and U.S. Department of Veterans Affairs, Medical Center, Cleveland, Ohio, 41 FLRA 514, 517 (1991)). Because the Back Pay Act requires evidence of a causal relationship between the unjustified or unwarranted personnel action and a loss or reduction in pay, allowances, or differentials, backpay is authorized only where the violation resulted in such a loss or reduction. See U.S. Department of the Treasury, Customs Service, South Central Region, New Orleans, Louisiana and National Treasury Employees Union, Chapter 168, 43 FLRA 337, 340-41 (1991).
B. There Is No Causal Connection Between the Procedural Error and the Loss of Pay
The Arbitrator concluded that the Agency's local personnel representatives' failure to include the cautionary language in the vacancy announcement regarding the availability of funds for demonstration project pay was "in direct contravention of internally adopted [Agency] policies" and, thus, constituted a "significant procedural error." Award at 24-25. Even assuming, without deciding, that the Agency's local personnel representatives' failure to include the cautionary langu