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56 FLRA No. 99
U.S. DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
September 11, 2000
Before the Authority: Donald S. Wasserman, Chairman and Dale Cabaniss, Member.
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 Robert O. Harris 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, finding that the Agency did not have discretion under its Personnel Management System (PMS) to withhold the January 1999 government-wide wage increase. For the following reasons, we conclude that the Agency has failed to establish that the award is deficient under section 7122(a) of the Statute. Accordingly, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
In March 1996, section 347 of the Department of Transportation and Related Appropriations Act (Appropriations Act) exempted the Agency from nearly all of title 5 and provided that it should develop and implement a personnel management system. Immediately following, the Federal Aviation Reauthorization Act of 1996 (FAA Act) was passed, providing that "[i]n developing and making changes to the personnel management system . . . the Administrator shall negotiate with the exclusive bargaining representatives of employees [ v56 p628 ] of the [FAA] under section 7111 of title 5[.]" 49 U.S.C. § 40122(a)(1). [n1] The FAA Act also provides that in fixing compensation and benefits, the Administrator shall not "be bound by any requirement to establish such compensation or benefits at particular levels." 49 U.S.C. § 106(l)(1).
The Agency then issued the Federal Aviation Personnel Management System (PMS), providing that from April 1, 1996 until September 30, 1997, the personnel compensation and benefits of all FAA employees would continue to be determined with the same "standards and procedures that were in effect on March 31, 1996," prior to the implementation of the PMS. Agency Attachment 10, PMS at 9. On April 1, 1996, the first FAA Personnel Reform Implementation System (PRIB 1) was issued, providing that "[a]ll current systems and procedures remain in effect until superseded by a PRIB." Agency Attachment 11, PRIB 1 at 1.
In the fall of 1998, a general pay increase was announced for Federal employees effective January 1999. An Agency labor relations representative informed the Union that the Agency had discretionary authority to grant all, part, or none of the 1999 government-wide general pay increase to FAA employees. The Union filed a grievance alleging that the FAA's position that it has discretion with respect to the granting of the 1999 pay increase violated PRIB 1. Subsequent to the filing of the grievance, the FAA Administrator announced that the Agency had "elected" to adopt the same pay increase as provided to other Federal employees. Award at 5.
The grievance remained unresolved and was submitted to the Arbitrator. Before the Arbitrator, the Agency framed the issue as:
Whether PASS bargaining unit members are or were automatically entitled to the 1999 government-wide pay adjustment that is (sic) approved by the President.
The Arbitrator concluded that the Agency did not have discretion to deny the 1999 wage increase. First, the Arbitrator noted that, under the FAA Act, the Administrator has the power to "appoint, transfer and fix compensation" of FAA employees. Id. at 8.
The Arbitrator then reviewed the PMS and PRIB 1. Relying on the plain language of PRIB 1 -- that "[a]ll current systems and procedures remain in effect until superseded by a PRIB" -- the Arbitrator found that PRIB 1 dictated that in order for the Administrator to change the pay system in 1998 from that which other employees received under title 5, a PRIB would have to be issued. Id. at 9.
The Arbitrator rejected the Agency's claim that PRIB 1 did not apply to the laws and regulations of title 5. In this regard, the Arbitrator found that the record did "not contain creditable testimony which would give a specialized meaning to the words contained in PRIB ." Id. at 8-9. In particular, the Arbitrator found that the testimony of an Agency personnel management specialist that PRIB 1 did not apply to title 5 "[could] not be accepted at face value" because the witness admitted she was not an expert in the application of PRIBs, and because her testimony directly contradicted the testimony of another Agency representative in another case who testified as an expert in PRIBs. [n3] Id. at 8.
Based on the foregoing, the Arbitrator concluded that the Agency did not have discretion to deny the January 1999 wage increase. The Arbitrator also found that, under section 40122, the Agency may have greater discretion to grant or deny any wage increase after July 1, 1999 and that, therefore, his award did not address the Agency's discretion from that time on. Id. at 9.
III. Positions of the Parties
A. Agency's Exceptions
The Agency asserts that the award is deficient on two grounds. First, the Agency claims that under section 253 of the FAA Act, the Arbitrator did not have jurisdiction to resolve the grievance. [n4] The Agency argues the Administrator must negotiate over changes made to pay and compensation and then submit unresolved disputes to FMCS. According to the Agency, nothing in the FAA [ v56 p629 ] Act provides that either party may submit a dispute over compensation to an arbitrator for resolution.
Second, the Agency asserts that because it is no longer covered by the pay provisions of title 5, the general schedule pay adjustments under that title are not applicable to Agency employees. The Agency argues that, contrary to the Arbitrator's finding, PRIB 1 was not intended to apply to the laws and regulations in title 5. According to the Agency, PRIB 1 is an internal Agency regulation that was implemented only to ensure that internal Agency orders, regulations, and other management guidance remain in effect once the Agency was removed from most of title 5. In this connection, the Agency asserts that an agency's interpretation of its own regulation is normally controlling unless it is plainly erroneous or inconsistent with the language of the regulation.
B. Union's Opposition
First, the Union asserts that the requirement in the FAA Act that parties use the services of FMCS to resolve bargaining disputes over compensation is not applicable here because the parties do not have a bargaining dispute. The Union argues that under the parties' agreements, arbitrators have broad authority to resolve matters affecting employee working conditions and nothing in the FAA Act impairs that authority.
Second, the Union asserts that the Arbitrator did not err in finding that under PRIB 1, the title 5 systems and procedures in effect at the time the PMS was implemented remain in effect. According to the Union, the Agency offers no evidence demonstrating that the Arbitrator's interpretation of PRIB 1 was wrong. The Union agrees with the Agency that under section 347 of the Appropriations Act, the Agency had the discretion to adopt the substance of any section of title 5 that the Agency deemed appropriate. According to the Union, in implementing PRIB 1, the Agency adopted the substance of the systems and procedures in place as of April 1, 1996.
IV. Analysis and Conclusions
A. The Arbitrator Had Jurisdiction under the FAA Act to Resolve the Grievance.
As set forth above, the FAA Act requires the Agency to negotiate with a union and, absent agreement, submit to FMCS, "changes to the personnel management system. . . ." 49 U.S.C. § 40122(a)(1). The parties' dispute does not involve negotiations over changes to the PMS. Rather, the issue is whether the Agency had the discretion to grant or deny the 1999 pay increase. That is, the parties' dispute revolves around employee entitlements under the existing system.
The Agency framed the issue before the Arbitrator as "[w]hether PASS bargaining unit members are or were automatically entitled to the 1999 government-wide pay adjustment that is (sic) approved by the President[.]" Award at 9-10. In resolving that issue, the Arbitrator relied on the PMS and PRIB 1 -- the Agency directive setting forth existing policies or procedures -- and concluded that under that PRIB, employees were entitled to the increase. As the matter at issue in the grievance and resolved by the Arbitrator arises from the personnel management system and does not involve negotiations over developing or making changes to that system, we find that the Arbitrator had jurisdiction under section 253 of the FAA Act to resolve the grievance.
B. The Award Is Not Inconsistent with the Agency Regulation.
Section 7122(a)(1) of the Statute provides that an arbitration award will be found deficient if it conflicts with any law, rule, or regulation. For purposes of section 7122(a)(1), the term "regulation" includes governing agency regulations. See National Federation of Federal Employees, Local 2030 and U.S. Department of the Interior, Bureau of Land Management, Idaho Falls, Idaho, 53 FLRA 1136, 1141 (1998). As the Agency's exception challenges the award's consistency with PRIB 1 -- an Agency regulation -- we review the exception and the 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 Arbitrator found that the language of PRIB 1 -- that "[a]ll current systems and procedures remain in effect until superseded by a PRIB" -- means that the [ v56 p630 ] provisions of title 5 that were applicable to Agency employees on March 31, 1996, would continue to be applicable until a PRIB was issued providing something to the contrary. The Agency argues that the award is contrary to PRIB 1 because PRIB 1 was not intended to apply to the laws and regulations in title 5. Rather, according to the Agency, PRIBs merely "announce personnel management initiatives, procedures and direction" and "explain which existing policies or procedures change. Exceptions at 8.
The Authority follows the practice of the Federal courts and generally affords deference to an agency's interpretation of its own regulations, giving the interpretation "controlling weight unless it is plainly erroneous or inconsistent with the regulation." U.S. Department of Transportation, Federal Aviation Administration and National Air Traffic Controllers Association, 55 FLRA 797, 802 (1999) (FAA) (quoting Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994)); see also FLRA v. U.S. Department of the Treasury, Financial Management Service, 884 F.2d 1446, 1454 (D.C. Cir. 1989) (FLRA v. Treasury), cert. denied, 493 U.S. 1055 (1990); FAA, 55 FLRA at 801.
However, the Authority has declined to defer to an agency's interpretation of its own regulation where, among other things, the agency has, "in at least some instances, . . . acted in a manner that is inconsistent with" its current interpretation of the regulation. U.S. Department of Justice, Federal Bureau of Prisons, Medical Facility for Federal Prisons and American Federation of Government Employees, Local 1612, 51 FLRA 1126, 1137 (1996) (Bureau of Prisons), motion for reconsideration denied, 52 FLRA 694 (1996). This is consistent with the practice of Federal courts, which accord "considerably less deference" to an agency's interpretation of a relevant provision that conflicts with the agency's prior interpretation of that provision. INS v. Cardoza-Fonseca, 480 U.S. 421, 446 n.30 (1987). Accord Washington v. HCA Health Services of Texas, Inc., 152 F.3d 464, 470 (5th Cir. 1998) (noting that the degree of deference is based on, among other factors, "the consistency with which the agency has adhered to the position announced"). Further, the Authority has recognized that "'[c]ourts have sometimes declined to defer at all to agency counsel's litigative positions.'" Bureau of Prisons, 51 FLRA at 1136.
The Agency offers an interpretation of its regulations in this case that is not consistent with its interpretation of these same regulations in other contexts. The Arbitrator found that the testimony of the Agency official here, that the PMS and PRIB 1 did not incorporate statutory compensation standards, was inconsistent with the testimony of another official, in another case, that the regulations did intend to incorporate such standards. The Agency does not dispute this finding in its exceptions.
Further, the Agency's interpretation of these regulations here is inconsistent with the position the Agency took in FAA, 55 FLRA 797. In that case, the Authority reviewed exceptions to an arbitration award in which the Agency objected that the arbitrator had disregarded its incorporation of title 5 pay standards with respect to hazardous duty pay (HDP). In upholding the Agency's position, the Authority relied on section 1(b) of the PMS, requiring that "personnel compensation and benefits of all FAA employees shall continue to be determined in accordance with the standards and procedures that were in effect on March 31, 1996." Id. (quoting section 1(b)). That is the same regulatory language that the Agency asserts, here, does not refer to statutory standards.
The interpretation of PRIB 1 adopted by the Arbitrator is consistent with the terms of the regulation and with the interpretation of the PMS adopted by the Authority, at the Agency's urging, in FAA. The interpretation offered by the Agency in this case is at odds with that prior construction. As the Agency's interpretation has not been consistent and there is no indication that the position the Agency takes in this case represents the view of the Agency head, rather than a litigation position, we do not defer to the interpretation offered by the Agency in this case.
The Agency has not established that the award is contrary to its regulation. As such, we find that the Agency's exception provides no basis for finding the award deficient.
The Agency's exceptions are denied.
Footnote # 1 for 56 FLRA No. 99
The amendments to 49 U.S.C. § 40122 are set forth in section 253 of the FAA Act. The parties and the Arbitrator refer to both the amendments as "section 40122" and "section 253." As a result, the two section numbers are used interchangeably in this decision.
Footnote # 2 for 56 FLRA No. 99
Because the Agency excepts to the Arbitrator's resolution of the issue as formulated by the Agency, this decision does not address the alternative statement of the issue proposed by the Union, which the Arbitrator also addressed.
Footnote # 3 for 56 FLRA No. 99
That other case involved a grievance alleging that the Agency violated the parties' agreement by failing to pay night premiums. In that case, a personnel management specialist who had worked on the development and implementation of the PMS, testified that under PRIB 1, the Agency chose to retain the government pay system. See Union Attachment 9, Post Hearing Brief at 10- 11; Union Attachment 10, Award of Arbitrator Hockenberry at 12.
Footnote # 4 for 56 FLRA No. 99
Section 253 of the FAA Act, which was codified at 49 U.S.C. § 40122, provides in relevant part that if the Administrator does not reach an agreement with the Union over the development of and changes to the PMS, then:
the services of the Federal Mediation and Conciliation Service [(FMCS)] shall be used to attempt to reach such agreement. If the services of the [FMCS] do not lead to an agreement, the Administrator's proposed change to the personnel management system shall not take effect until 60 days have elapsed after the Administrator has transmitted the proposed change, along with the objections of the exclusive bargaining representative to the change, and the reasons for such objections, to Congress.
49 U.S.C. § 40122(a)(2).