[ v56 p280 ]
56 FLRA No. 39
U.S. DEPARTMENT OF THE NAVY
NAVAL EXPLOSIVE ORDINANCE DISPOSAL
INDIAN HEAD, MARYLAND
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 1923
April 28, 2000
Before the Authority: Donald S. Wasserman, Chairman; Phyllis N. Segal and Dale Cabaniss, Members.
Decision by Chairman Wasserman for the Authority.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Mollie H. Bowers 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 alleging that the Agency improperly exempted eight Equipment Specialists from overtime coverage under the Fair Labor Standards Act (FLSA). The Arbitrator ordered the Agency to reclassify the eight specialists as nonexempt. The Arbitrator also ordered back pay and statutory liquidated damages for uncompensated overtime for a period of two years prior to the filing date of the grievance.
For the following reasons, we conclude that the award is not deficient under section 7122(a) of the Statute. Accordingly, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
This case concerns the designation of bargaining unit employees as "professional" employees and their resulting exemption from overtime coverage under FLSA. [n1] The Union filed an initial grievance regarding the Agency's "failure to compensate two bargaining unit members for overtime[, that was later] expanded . . . into a class-action grievance covering all [exempt] bargaining unit members," including twenty-nine Equipment Specialists. Award at 4-5. As a result of a partial settlement agreement, the Agency agreed to reclassify twenty-one of the Equipment Specialist positions as nonexempt positions covered by the FLSA overtime provisions.
The unresolved portion of the grievance pertaining to eight Equipment Specialist positions was submitted to arbitration where the parties stipulated the following issues before the Arbitrator:
(1) Whether, as to the eight individuals at issue holding the position of Equipment Specialist in the bargaining unit, the Agency has properly exempted them from overtime pay under the FLSA, and, if not, should the remedy include liquidated damages and attorneys fees as well as back pay; and
(2) Whether, as to these eight Equipment Specialists in the bargaining unit, the Agency's actions were "willful" so as to precipitate a three-year limitation period.
Id. at 2-3.
At the outset of her analysis, the Arbitrator explained that the position description (PD) is "[c]entral to the entire administration" of the federal personnel [ v56 p281 ] system, since it "establishes the parameters of the `job', including the duties and responsibilities of the position, the knowledge and skills required to perform the duties, and the amount and type of supervision that will be given." Id. at 12. The Arbitrator reasoned that "it is from [the PD] that compensation and status, including FLSA status, is determined[,]" and therefore, the "official PD's for the eight (8) Equipment Specialist positions at issue here . . . must be used to establish if the FLSA exemption determination was properly made." Id. Moreover, the Arbitrator noted that each of the four employee representatives who testified at the arbitration hearing "stated unequivocally that he had recently reviewed his PD and found it to be a correct statement of the parameters of his position." [n2] Id. The Arbitrator also noted that the "two [s]upervisors testified that the PD's for [their respective] employees were correct." Id. The Arbitrator found this testimony of the representative specialists and supervisors to be "creditable and therefore compelling." Id. In addition, the Arbitrator stated that the "record, in its entirety, [was] carefully considered in determining what the award in this case shall be." Id. at 2.
The Arbitrator then analyzed the PDs for the entire group of Equipment Specialists, comprising the eight specialists at issue and the twenty-one specialists who were reclassified as nonexempt as a result of the parties' partial settlement agreement. In this regard, the Arbitrator noted that the PDs for all twenty-nine specialists were submitted as "Joint Exhibit IA - IDD" and that other "exhibits . . . provided details of the January 8, 1999 settlement for twenty-one (21) of these positions[.]" Id. at 13. Based on her review of the PDs, the Arbitrator made the following factual findings: (1) The PD for one of the specialists in the Engineering Division was a "verbatim copy" of the PDs for two specialists who were reclassified as non-exempt. Id. (2) The "individual PD's [for the two representatives in the Engineering Division were] nearly verbatim to the PD for [a settled non-exempt specialist], particularly the duties section, the knowledge required section, and the supervisory controls section." Id. (3) The individual PDs for the two representatives in the Procedures Development Division were "with the exception of the systems identified in the Duties section (A(1)), verbatim of the PD" for another settled non-exempt specialist. Id. (4) The individual PD for one of the specialists in the Procedures Development Division was "significantly different from that of any other Equipment Specialist in the group of twenty-nine[.]" Id.
Based on these findings, the Arbitrator concluded that
If the set of duties, knowledge required, and supervisory controls are either the same or essentially the same, then the positions must all carry the same classification for FLSA overtime. Since the parties have already determined that the similar positions are non-exempt, then these . . . positions must also be non-exempt.
Id. at 14. Furthermore, although the Arbitrator found that the PD for one of the specialists in the Procedures Development Division was unlike the PD of any other specialist, the Arbitrator concluded that this position must be classified as nonexempt since the parties stipulated that the FLSA status for this position would be based on the determination for the designated representatives in that division.
The Arbitrator then concluded that "the Agency failed to make a good faith effort . . . in determining the [FLSA] status" of the eight specialists, and thus, liquidated damages were appropriate. Id. at 15. The Arbitrator concluded that at a "minimum" a good faith effort "would [have] involve[d] a line-by-line comparison of PD's." Id. at 14. In this connection, the Arbitrator reasoned that the Agency "had an obligation to have carefully reviewed each of the PD's for challenged positions before agreeing to the settlement[, and that s]uch a review would certainly have shown that some of the PD's for which exempt status would be retained were verbatim replicas of those included in the settlement, and that others were essentially the same in the key areas used to meet the exemption criteria." Id. at 15. However, the Arbitrator concluded that the Agency's "haphazard" review or its failure to conduct an "in-depth review" did not "constitute willful behavior." Id.
Finally, the Arbitrator sustained the grievance and ordered the Agency to remove the FLSA exemption for the eight specialists at issue. The Arbitrator also ordered backpay and statutory liquidated damages for uncompensated overtime for a period running two years prior to the filing date of the grievance. The Arbitrator remanded the issue of attorney's fees to the parties and retained jurisdiction over this issue pending its resolution. [ v56 p282 ]
III. Positions of the Parties
A. Agency's Exceptions
The Agency maintains that the award is deficient on three grounds.
First, the Agency argues that the Arbitrator's ruling that the eight Equipment Specialists are nonexempt is contrary to law since the Arbitrator failed to consider the employees' actual or day-to-day duties as required by OPM regulations and relevant case law. In this regard, the Agency emphasizes that the Arbitrator's consideration solely of the employees' PDs and the testimony regarding the accuracy of the PDs is at odds with the Federal Circuit's decision in Berg v. Newman, 982 F.2d 500 (Fed. Cir. 1992) (Berg). The Agency maintains that Berg clearly illustrates that "mere reliance on [PDs] and/or occupational standards is not enough to establish the FLSA exemption status[.]" Exceptions at 8, 9.
The Agency further argues that the "Arbitrator improperly determined that Agency action on similarly situated employees, i.e., Agency Equipment Specialists settled pursuant to the parties' [Partial Settlement Agreement] was binding upon the eight remaining Equipment Specialist[s]" at issue. Id. at 10. In this connection, the Agency contends that the FLSA exempt status determinations must be made on a "case-by-case basis" that is "independent of the government's treatment of similarly situated employees[.]" Id. at 9. The Agency cites Bolduc v. National Semiconductor Corp., 35 F. Supp.2d 106 (D. Me. 1998) (Bolduc), Reich v. Newspapers of New England, Inc., 44 F.3d 1060 (1st Cir. 1995) (Reich) and Aamold v. United States, 39 Fed. Cl. 735 (1997) (Aamold) for this proposition. Moreover, the Agency maintains that since the Arbitrator did not "undertake the required substantive fact-finding as to the actual duties of the eight Equipment Specialists[,] . . . at a minimum, the Award must be remanded back to the parties for further consideration." Id. at 15. In this regard, the Agency argues that the Arbitrator rejected the extensive testimony from all of the representative specialists and their supervisors regarding the specialists' actual duties that was "captured in over 360 pages of written transcripts and in the work products of the employees entered into the record." Id. at 9. Lastly, the Agency argues that the award "contained no statutory, regulatory or competent jurisdictional authority" for the imposition of liquidated damages. Id. at 6.
Second, the Agency argues that the award is based upon "clearly erroneous" nonfacts. Id. at 11. The Agency maintains that the Arbitrator's finding that "the FLSA exemption status of the eight Equipment Specialists . . . is derived exclusively from their respective PD's" is a nonfact. Id. at 12, citing Award at 12. The Agency also argues that the Arbitrator's determination that she was "required to convert the eight Equipment Specialists submitted to arbitration to non-exempt [status] because the parties['] . . . settlement agreement converted similar Equipment Specialist positions to non-exempt [status]" constitutes a nonfact. Id. citing Award at 14. In support of its claims that these findings represent nonfacts, the Agency reiterates its arguments previously made in connection with the contrary to law exception.
Third, the Agency argues that the award runs contrary to public policy that encourages meaningful compromise and settlement of disputes since the Arbitrator's award is "derived . . . from" the parties' Partial Settlement Agreement, as opposed to facts and evidence presented by the parties at arbitration. Id. at 15. The Agency contends that under the Federal Rules of Evidence, "the provisions of such agreements [like the parties' Partial Settlement Agreement] would be inadmissible at hearings or trials before the federal courts." Id. at 16, citing Federal Rule of Evidence 408. In this regard, the Agency emphasizes that the purpose of Rule 408 is "to promote the public policy favoring the compromise and settlement of disputes." Id. (citations omitted).
The Agency also contends that the Arbitrator "in essence, penalized the Agency for entering into the Partial Settlement Agreement with the Union . . . [since] the Arbitrator determined that, as a result of the [agreement], the Agency lost its right to substantively argue the merits of the eight Equipment Specialists' FLSA exemption status." Id. at 17. The Agency notes that the Arbitrator determined that the settlement agreement engendered a "new duty" for the Agency "to conduct a line by line comparison of the PD's of settled Agency employees with those of the eight Equipment Specialists submitted for arbitration[,]" and that the Agency's "failure to conduct such a review" warranted the imposition of liquidated damages. Id. The Agency emphasizes that "the standard set by the Arbitrator . . . preclude[s the Agency] from engaging in future, good faith FLSA exemption status compromise and settlement without losing its ability to defend specific employees' exemption status and/or incurring heightened review standards for those employees it elects to defend." Id. [ v56 p283 ]
B. Union's Opposition
The Union maintains that the Agency's contrary to law and nonfact exceptions taking issue with the Arbitrator's review of the specialists' PDs should be denied. The Union contends that "[a]s long as there is probative evidence in the record that could support the award, the Authority has refrained from overturning an award even where express statements relied upon by the arbitrator are erroneous." Opposition at 12. In this regard, the Union argues that the Arbitrator's award is supported by record evidence on the whole. The Union emphasizes that the Arbitrator expressly stated that she considered the record in its entirety, which included verbatim transcripts of the two days of hearings at which both parties presented evidence and testimony. Moreover, the Union notes that the Arbitrator considered the testimony of the specialists at issue and their supervisors regarding the accuracy of the PDs concerning their actual duties. The Union also emphasizes that besides the PDs of the twenty-one settled specialists, the record included the specialists' testimony regarding "identified nonexempt employees who did similar work[.]" Id. at 13.
The Union further maintains that the Arbitrator's award is consistent with well established rules that FLSA determinations are "narrowly construed against the employers seeking to assert them[,]" and that "FLSA should be given a broad reading, in favor of coverage." Id. at 15 citing Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960) (Arnold) and Monahan v. County of Chesterfield, VA, 95 F.3d 1263, 1267 (4th Cir. 1996). In accordance with this conceptual framework, the Union contends that the specialists at issue are technical employees, who do not fulfill the "relevant educational prerequisite for FLSA exemption as a `professional.'" Id. at 17 (emphasis in original). In addition, the Union argues that the Arbitrator's award is "consistent with the proposition that similarly situated employees should be treated the same for FLSA purposes[.]" Id. at 18-19.
The Union also claims that the Arbitrator's award of liquidated damages is consistent with applicable law since there is no "evidence in the record that the Agency conscientiously undertook its FLSA determinations." Id. at 20.
Finally, the Union argues that the Agency's claim that the Arbitrator's consideration of the parties' Partial Settlement Agreement "violates the public policy and evidentiary rules concerning disclosure of the terms of a settlement agreement . . . is wholly without merit." Id. at 21. In this regard, the Union notes that the Authority has held that "an arbitrator is not bound by the Federal Rules of Evidence." Id. Moreover, the Union contends that "even absent disclosure of the terms of the parties' settlement agreement, the record in this case is replete with verbal and written descriptions of the actual duties of the employees at issue and comparisons of those duties to the duties of the Agency's nonexempt Equipment Specialists." Id. at 22.
IV. Analysis and Conclusions
A. Contrary to Law Claim
Under section 7122(a)(1) of the Statute, an arbitration award will be found deficient if it conflicts with any law, rule or regulation. Overseas Education Association and U.S. Department of Defense Dependents Schools, Arlington, Virginia, 51 FLRA 1246, 1251 (1996). As the Agency's exceptions involve the award's consistency with applicable law, the Authority reviews questions of law raised by the award and the Agency's exceptions de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995). In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998) (Army Research). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id. An arbitrator's failure to apply a particular legal analysis "does not render [an] award deficient because, . . . in applying the standard of de novo review, the Authority assesses whether the arbitrator's legal conclusions are consistent with law, based on the underlying factual findings." American Federation of Government Employees, National Border Patrol Council and U.S. Department of Justice, U.S. Immigration and Naturalization Service, United States Border Patrol, 54 FLRA 905, 910 n.6 (1998) (emphasis in original).
The Agency argues that the Arbitrator's award fails to comply with case law in three respects: (1) the Arbitrator's determinations are based solely on the specialists' PDs without any consideration of the specialists' actual or day-to-day duties; (2) the Arbitrator's determinations rely on the Agency's settlement or concession regarding other specialists as non-exempt; and (3) the Arbitrator's award of liquidated damages is not supported by any legal basis. For the following reasons, we deny these claims. [ v56 p284 ]
1. The Arbitrator's Consideration of the Employees' PDs is Not Contrary to Law
Under OPM's implementing regulations, "the designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee." 5 C.F.R. § 551.202(h)(i). In this connection, courts have followed the regulation's directive to consider the actual duties performed by an employee. See Berg, 982 F.2d at 503 (the administrative exemption requires examination of employee's specific day-to-day activities); Bolduc, 35 F. Supp.2d at 113 (a determination of whether an employee is exempt under the FLSA requires an examination of the day-to-day work of an employee). In addition, it is the employer's burden to prove that an employee falls within the professional exemption, Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974), and the exemption is construed narrowly against the employer who seeks to assert it. [n3] See Arnold, 361 U.S. at 392.
We find that the Agency's argument that the award conflicts with the Federal Circuit's decision in Berg is unavailing. In Berg, the Federal Circuit, in addressing whether electronic technicians were exempt administrative employees, ruled that "[t]o determine whether a position fits within the exemption, a trial court must have before it sufficient facts concerning the daily activities of that position to justify its legal conclusion." [n4] Berg, 982 F.2d at 503. The Federal Circuit determined that the record did not contain sufficient facts regarding the day-to-day duties of the technicians to justify the legal conclusion that these employees were exempt and reversed the district court's grant of summary judgment. In this regard, the Federal Circuit found that "[t]he Government's evidence [which] consists of appellants' job description and two conclusory statements from Air Force classifiers[,] . . . presents no evidence describing appellants' specific job duties." Id. The court also noted that "[t]he general job description lacks specific facts about appellants' day-to-day activities[, and s]imilarly, the Air Force classifiers supply little, if any, factual basis for their conclusions that appellants fit within the exemption." Id.
Although the Award contains language overstating the importance of PDs in making FLSA determinations, we find that the Agency has not established that the Arbitrator failed to consider the specialists' actual or day-to-day duties in making the exempt status determinations. The Agency argues that the Arbitrator "reject[ed] . . . the substantive testimony of the [representative employees] as to their day-to-day activities in favor of their static PD's[.]" Exceptions at 10. However, the Arbitrator specifically stated that she relied on: (1) the testimony of the supervisors that "the PDs for [their] employees were correct," and (2) the testimony of the representative employees that their PDs were a "correct statement of the parameters of [their] positions[,]" that is, "the duties and responsibilities of the position[s], the knowledge and skills required to perform the duties, and the amount and type of supervision that will be given." Award at 12. In line with this direct, uncontested testimony of the employees and their supervisors that the PDs were accurate representations of the work performed, the Arbitrator appropriately considered the "set of duties, knowledge required and supervisory controls" delineated in the PDs. Id. at 14.
Furthermore, neither party disputes the sufficiency of the record before the Arbitrator. Rather, both parties emphasize that the record was more than sufficient to make the FLSA exempt status determinations. [n5] Exceptions at 9; Opposition at 12-13. Accordingly, in light of the Arbitrator's consideration of the employees' actual duties and the sufficiency of the record before the Arbitrator, [ v56 p285 ] we find that the Agency has not established that the award is deficient as contrary to the Federal Circuit's decision in Berg or the OPM regulations.
2. The Arbitrator's Consideration of the Nonexempt Status of Other Employees with the Same or Similar Duties is Not Contrary to Law
Similarly, the Agency's argument that the award is contrary to the courts' holdings in Bolduc, Reich, and Aamold is unpersuasive. In both Bolduc and Reich, the courts ruled that exempt status determinations must be made on the basis of the employee's actual or day-to-day duties and not the employer's treatment of similarly situated employees with the same title. See Bolduc, 35 F. Supp.2d at 113 (the court must examine the day-to-day duties of the employee rather than rely on the fact that other employees with the same title were classified as exempt by the employer); Reich, 44 F.3d at 1075 (the determination of whether an exemption applies to a given employee depends on the specific duties and characteristics required by the position and is independent of the title the employer ascribes to the position). Moreover, in Aamold, the court focused on the employee's actual duties as "dispositive" regarding the application of the exemption, and concluded that overall, the record, which consisted of PDs and occupational standards, contained insufficient facts to justify either party's motion for summary judgment. Aamold, 39 Fed. Cl. at 742, 747.
Here, the Agency's reliance on Bolduc and Reich is misplaced since the Arbitrator did not rely merely on the fact that the eight Equipment Specialists at issue had the same title as the twenty-one other Equipment Specialists who had been designated as nonexempt. Rather, the Arbitrator concluded that the eight Equipment Specialists were nonexempt based on her specific findings that the knowledge requirements, supervisory controls and duties performed by the designated representatives were the same or virtually the same as other specialists who the Agency conceded did not meet the professional exemption criteria. As noted above, in making these findings, the Arbitrator considered the duties described in the PDs as the actual or day-to-day work of the grievants and the specialists covered by the settlement agreement in line with the testimony of the supervisors to this effect. See Transcript at 233-34, 242, 356-60.
The Agency's contention -- that the Arbitrator is prohibited from considering and relying on exempt status determinations regarding other Equipment Specialists who perform the same or similar duties -- is refuted by the decision of at least one reviewing court. In this regard, the Seventh Circuit has made exempt status determinations, based in part on comparisons with other employees. In Piscione v. Ernst & Young, L.L.P., 171 F.3d 527 (7th Cir. 1999) (Piscione), in deciding whether an employee's duties/activities satisfied the requirements for both the administrative and professional exemptions, the court compared the duties of the employee at hand with similar or analogous duties of employees in other cases. For instance, in determining whether the employee's duties and activities required the exercise of discretion and independent judgment under both the administrative and professional exemption criteria, the court relied on its finding that the employee's duties/skills were "similar to those" of "the plaintiff in Spinden," who the Eighth Circuit found met this prong of the exemption tests. Id. at 537-38, citing Spinden v. GS Roofing Prod. Co., Inc., 94 F.3d 421, 423-24, 428-29 (8th Cir. 1996), cert. denied, 520 U.S. 1120 (1997). Additionally, the court concluded that "[c]omparing [the employee's] duties with the hypothetical employees used as illustrations in the regulations also clearly demonstrates that his primary duties directly related to the policies or general business operations of [the employer]." Id. at 542. In making such comparisons, the court noted that "[t]he analogy does not need to be perfect; the position needs only to be `somewhat analogous' to an occupation exempted in the regulations." Id. at 542-43.
The Seventh Circuit's decision in Piscione illustrates that the determination regarding whether an employee's duties satisfy the requirements of the professional exemption in 5 C.F.R. § 551.207 may be based on an assessment of the employee's duties at issue with the same or comparable duties of other employees whose exempt status has been determined. Here, the Arbitrator's comparison of the duties of the specialists at issue with the duties of the twenty-one nonexempt specialists is consistent with the comparative analytical approach in Piscione. As previously mentioned, the Arbitrator concluded that the eight Equipment Specialists were nonexempt based on her specific findings that the knowledge requirements, supervisory controls and duties performed by the designated representatives were the same or virtually the same as other specialists who the Agency conceded did not meet the professional exemption criteria in § 551.207. [n6] Accordingly, we defer to the Arbitrator's findings as a sufficient basis for concluding that the employees at issue did not meet the criteria in § 551.207.
Based on the foregoing, we find that the Agency has not established that the award is deficient as contrary to law. [ v56 p286 ]
3. The Arbitrator's Award of Liquidated Damages is Not Contrary to Law
Lastly, we reject the Agency's claim that the Arbitrator's award of liquidated damages is without any legal basis. In FDIC, the Authority delineated the standards for imposing liquidated damages under the FLSA. The Authority stated that the FLSA "in effect, establishes a presumption that an employee who is improperly denied overtime shall be awarded liquidated damages, unless the employer shows that the `act or omission giving rise [to the violation of the FLSA] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA]." FDIC, 53 FLRA at 1481, citing 29 U.S.C. § 260. In this regard, an employer in violation of the FLSA has "a `substantial burden' of proving that he acted in good faith and on a reasonable belief [that] he was in compliance[,]" and thus "`double damages are the norm, single damages are the exception[.]" Id. (citations omitted).
As relevant here, the Authority noted that "at least one reviewing court has ruled that an employer's failure to take affirmative steps to ascertain its employees' exemption status, particularly where there have been changes in regulation or the employer has information calling into question its employees' status, demonstrates that the employer lacked good faith in complying with the responsibilities imposed by the FLSA." FDIC, 53 FLRA at 1483, citing Bankston v. State of Illinois, 60 F.3d 1249, 1255 (7th Cir. 1995). Here, the Agency has offered no evidence that it took affirmative steps that would meet the substantial burden necessary to overcome the presumption in favor of liquidated damages. Thus, we affirm the Arbitrator's legal conclusion that the Agency did not act in good faith and find that the award of liquidated damages is not contrary to law.
Accordingly, we deny the Agency's exception.
B. The Award is Not Based on Nonfacts
To establish that an award is based on nonfacts, the appealing party must demonstrate that central facts underlying the award are clearly erroneous, but for which a different result would have been reached by the Arbitrator. See 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). An award will not be found deficient based on an arbitrator's determination on any factual matters that the parties disputed below. Id. at 594 (citing Mailhandlers v. Postal Service, 751 F.2d 834, 843 (6th Cir. 1985)).
A review of the record reveals that the parties disputed the alleged nonfacts before the Arbitrator regarding whether the exemption status is based exclusively on the PDs and whether the non-exempt status of similarly situated employees is relevant to the status of the employees at issue. In this regard, the Arbitrator noted that the Union argued that "the Agency's exemption decision [regarding the eight specialists] violates the proposition that similarly situated employees should be treated the same for FLSA purposes." Award at 7. Moreover, the Agency's nonfact claims do not challenge the Arbitrator's findings of fact, but rather take issue with the Arbitrator's interpretation of what evidence governs the determination of the professional FLSA exemption. See U.S. Department of the Navy, Philadelphia Naval Shipyard and Philadelphia Metal Trades Council, 39 FLRA 590, 605 (1991) (agency's nonfact argument disputing the arbitrator's interpretation of regulation rather than the arbitrator's factual findings provided no basis for finding that the award was based on nonfact).
Accordingly, we deny the Agency's exception.
C. The Award is Not Contrary to Public Policy
In Social Security Administration and American Federation of Government Employees, Local 1923, 32 FLRA 765, 767-68 (1988), the Authority stated the following with respect to claims that an award is deficient as contrary to public policy:
Under section 7122(a)(2) of the Statute, we will find an arbitration award deficient on grounds similar to those applied by Federal courts in private sector labor relations cases. In the private sector, courts will find an arbitration award deficient when the award is contrary to public policy. However, this ground is "extremely narrow." U.S. Postal Service v. National Association of Letter [ v56 p287 ] Carriers, 810 F.2d 1239, 1241 (D.C. Cir. 1987), cert. dismissed, 108 S. Ct. 1589 (1988). In order to find the award deficient, the public policy in question must be "explicit," "well defined and dominant." W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766 (1983). In addition, the policy is to be ascertained "by reference to the laws and legal precedents and not from general considerations of supposed public interests." Id.; accord United Paperworkers v. Misco, Inc., 108 S. Ct. 364, 373 (1987). The violation of such public policy "must be clearly shown" if an award is to be found deficient.
We find that the Agency has not demonstrated that the Arbitrator's award is deficient because it is contrary to public policy that fosters compromise and the settlement of litigation/disputes. In this regard, the Agency maintains that the Arbitrator's award was not based on facts and evidence presented by the parties at arbitration, but rather derived from the parties' Partial Settlement Agreement, which would be inadmissible under Rule 408 of the Federal Rules of Evidence.
First, the Agency's argument concerning the admissibility of the Partial Settlement Agreement under the Federal Rules of Evidence is without merit, as the Authority has consistently held that the Federal Rules of Evidence are not applicable to arbitration hearings and awards. See U.S. Department of Health and Human Services, Social Security Administration, Office of Hearings and Appeals and American Federation of Government Employees, Local 3615, 39 FLRA 407, 413 (1991).
Second, the record reveals that the Arbitrator relied not only on the settlement agreement, but also considered the PDs for the twenty-one specialists who were reclassified as nonexempt as a result of the agreement. In this connection, we note that the Arbitrator stated that the PDs for all twenty-nine Equipment Specialists were submitted as "joint exhibits" and that other "exhibits . . . provided details of the January 8, 1999 settlement for twenty-one of these positions[.]" Award at 12-13. The Hearing Transcript also confirms that the Agency agreed with the submission of the PDs for the twenty-one nonexempt specialists for the Arbitrator's consideration of the status of the eight specialists at issue. See Transcript at 11. In addition, the parties' Partial Settlement Agreement contains neither a confidentiality clause nor a non-admission clause. Rather, the Partial Settlement Agreement affirmatively states that "[t]he FLSA classification of [the twenty-one specialists] is hereby acknowledged as nonexempt, settled and satisfied[.]" Agency's Exhibit C, Partial Settlement Agreement at 1.
Accordingly, we deny the Agency's exception.
The Agency's exceptions are denied.
Footnote # 1 for 56 FLRA No. 39
The FLSA of 1938, as amended 29 U.S.C. 201 et seq. and its implementing regulations issued by the Office of Personnel Management (OPM), codified at 5 C.F.R. pt. 551, provide minimum standards for both wages and overtime entitlements, and delineate administrative procedures by which covered work time must be compensated. As relevant here, the FLSA provides that an agency must compensate an employee for all hours of work in excess of 40 hours a week at a rate equal to one and one- half times the employee's hourly regular rate of pay. See 5 C.F.R. § 551.501. However, the FLSA also provides that . . . any employee or group of employees meeting the "professional exemption criteria" are exempt from the overtime provisions of the FLSA. See 5 C.F.R. § 551.20.
National Treasury Employees Union and Federal Deposit Insurance Corporation, 53 FLRA 1469, 1470 n.2 (1998) (FDIC).
Footnote # 2 for 56 FLRA No. 39
Of the eight grievants, four of the Equipment Specialist positions were in the Engineering Division and the other four were in the Procedures Development Division. The parties agreed to designate two of the four specialists in each division as representatives and stipulated that the Arbitrator's determinations regarding the two designated representatives in each division would be "binding" on the other two specialists in each division. Id. at 5-6.
Footnote # 3 for 56 FLRA No. 39
(a) Primary duty test. The primary duty test is met if the employee's work consists of -
(1) Work that requires knowledge in a field of science or learning customarily and characteristically acquired through education or training that meets the requirements for a bachelor's or higher degree, with major study in or pertinent to the specialized field as distinguished from general education; or is performing work, comparable to that performed by professional employees, on the basis of specialized education or training and experience which has provided both theoretical and practical knowledge of the speciality, including knowledge of related disciplines and of new developments in the field;
. . . .
(b) Intellectual and varied work test. The employee's work is predominantly intellectual and varied in nature, requiring creative, analytical, evaluative, or interpretative thought processes for satisfactory performance.
(c) Discretion and independent judgment test. The employee frequently exercises discretion and independent judgment, under only general supervision, in performing the normal day-to-day work.
Footnote # 4 for 56 FLRA No. 39
Footnote # 5 for 56 FLRA No. 39
We note that the parties conducted this arbitration exactly as the Federal Circuit has prescribed by designating representatives and presenting evidence from the representative specialists and their supervisors regarding their actual or day-to-day duties. See Adams, slip op. at 5.
Footnote # 6 for 56 FLRA No. 39
The fact that the Arbitrator considered and relied on the status of nonexempt employees resulting from a settlement agreement (versus comparing and relying on exempt status determinations that were made by the courts or included in OPM or DOL's regulations) does not undermine the Arbitrator's determination. We accord the Agency's "concession" or "acknowledgment" that the twenty-one Equipment Specialists were nonexempt the same weight as other exempt status determinations that have been decided on the merits. Agency's Exhibit B, Outline of Parties' Partial Settlement Agreement; Agency's Exhibit C, Partial Settlement Agreement at 1. Moreover, in this case, the settlement agreement does not contain a "non-admission" clause. See id.