U.S. Department of Defense, Education Activity, Arlington, Virginia (Agency) and Federal Education Association (Union)
[ v56 p749 ]
56 FLRA No. 125
U.S. DEPARTMENT OF DEFENSE
FEDERAL EDUCATION ASSOCIATION
September 27, 2000
Before the Authority: Donald S. Wasserman, Chairman and Dale Cabaniss, Member.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Michael Wolf 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 in part and denied in part a grievance finding that interest under the Back Pay Act, section 5596 of the Statute, was owed for the Agency's failure to timely pay the grievant a portion of her living quarters allowance (LQA). However, the Arbitrator denied the grievant's argument that the Agency still owed her additional LQA principal.
For the reasons that follow, we find that the Agency has failed to show that the Award is deficient under section 7122(a) of the Statute. Therefore, we deny the exceptions.
II. Background and Arbitrator's Award
In this matter, the parties sought arbitration seeking resolution of a number of matters stemming from the grievant's work for the Agency as a teacher overseas. The record indicates that for two pay periods in July of 1997, the grievant was not paid her LQA. Thereafter, the grievant contacted the Defense Finance and Accounting Service (DFAS) to try to rectify the problem. However, when that proved to be unavailing, the grievant filed a step one and then step two grievance with the Agency. The Agency in its step two decision [ v56 p750 ] informed the grievant that it had no authority to grant the requested relief despite acknowledging that LQA was owed. The grievant then filed a step three grievance to which the Agency did not respond.
The grievant was eventually paid a small portion of her LQA, $147.96, in August of 1998. The remainder of her LQA, $1,173.36, was paid in November of 1999. However, the Agency did not pay the grievant any interest. Accordingly, the Arbitrator framed the issues as follows in order to resolve this matter:
1. Is the Grievant owed any Living Quarters Allowance for the pay periods ending (`PPE') July 5 and July 19, 1997?
2. Pursuant to the Back Pay Act, is the Grievant owed any interest on the amounts of Living Quarters Allowance that were either unpaid or delayed in payment?
3. Pursuant to the Back Pay Act, is the Union entitled to the reimbursement of its attorney fees and expenses relating to this arbitration?
Award at 2.
In the award, the Arbitrator found that under the first issue the grievant was not owed additional money. Neither party excepts to this conclusion.
However, under the second issue, the Arbitrator found that the Agency owed the grievant interest under the Back Pay Act for committing an unjustified or unwarranted personnel action when it delayed paying LQA, noting that the Agency engaged in "willful noncompliance" of its responsibilities under 20 U.S.C. § 905, Article 47 of the parties' collective bargaining agreement, and a prior past practice of paying such entitlement at the end of each pay period. Id. at 19. [n1] Moreover, the Arbitrator noted that such finding was warranted based on three prior arbitrator awards involving these parties and under Authority precedent. [n2]
In reaching this conclusion, the Arbitrator found that under the Back Pay Act, as applied by Federal courts, where an employee seeks a benefit that is not mandatory but rather discretionary, the Act would not provide for payment. Spagnola v. Stockman, 732 F.2d 908 (Fed. Cir. 1984)(Spagnola); Brown v. Secretary of the Army, 918, F.2d 214 (D.C. Cir. 1990) (Brown). However, the Arbitrator found that the payment of LQA was not discretionary under 5 U.S.C. § 905, Article 47 of the parties' collective bargaining agreement, and the established past practice of paying this allowance every pay period. Award at 20, 23-24, citing Abramson v. United States, 42 Fed. Cl. 621 (1998) (Abramson); Romero v. United States, 38 F.3d 1204 (Fed. Cir. 1994); Crimaldi v. United States, 651 F.2d 151, 153 (2nd Cir. 1981); and John Cahill - Arbitration Award of Retroactive Promotion and Backpay, 58 Comp. Gen. 59 (1978) (Cahill).
Moreover, the Arbitrator found that the omission by the Agency in failing to pay the grievant did not involve "a good faith miscalculation of benefits or misinterpretation of a statute," in line with the rationale set out in Bradley v. United States, 42 Fed. Cl. 333 (1998) (Bradley), to justify not awarding a remedy under the Back Pay Act. Instead, the Arbitrator clearly stated, "[t]his case presents an Agency's willful noncompliance with a statutory and contractual benefit that it concedes was owed the Grievant." Award at 19-20.
Furthermore, the Arbitrator rejected the Agency's argument that there is no statutory obligation to pay the LQA by a date certain and, therefore, the delay did not amount to an unjustified or unwarranted personnel action. The Arbitrator, as noted above, found that the parties established a past practice of paying LQA each pay period and payment of the LQA had become a "binding contractual obligation" under this practice. Id. He also stated that under U.S. Department of Defense, Dependents Schools and Federal Education Association, 54 FLRA 514 (1998) the Authority affirmed Arbitrator Popular's award of attorney fees under the Back Pay Act based on untimely payment of LQA. As such, he dismissed the Agency's argument and found that the grievant is owed interest from the date the Agency failed to pay her until 30 days prior to the actual date of payment. [ v56 p751 ]
III. Positions of the Parties
A. Agency's Exceptions
1. OPM Regulations
The Agency maintains that OPM regulations defining an unjustified or unwarranted personnel action should be "approached with skepticism." Exceptions at 22-23, citing Department of Justice, Office of General Counsel, opinion dated May 31, 1994. Specifically, the Agency asserts that the definition of an unjustified or unwarranted personnel action promulgated in OPM's regulations at 5 C.F.R. § 550.803 would allow every pay action standing alone to form the basis of an unjustified or unwarranted personnel action. [n3] Accordingly, it argues, "[t]here is no justification within the statute [Back Pay Act] for including every pay action or every procedural error as an independent basis for a UUPA [unjustified or unwarranted personnel action]." Exceptions at 21.
2. Contrary to Law
The Agency asserts that the Arbitrator improperly found that it had committed an unjustified or unwarranted personnel action. Exceptions at 4-5, citing United States v. Testan, 424 U.S. 392, 405 (1976) (Testan). The Agency contends that it made no finding that the grievant was ineligible for or denied LQA (i.e., it took an adverse action), but rather, that an administrative delay held up the grievant's payment. [n4] As such, the Agency argues that the award is deficient because it had never denied its obligation to pay the grievant LQA due her and Congress has not explicitly waived sovereign immunity under the Back Pay Act where an agency takes no adverse personnel action against an employee. Exceptions at 4, 8 and 20.
It further argues that the Back Pay Act is generally limited in scope to "those very few circumstances" where the omission of a personnel action is based on a mandatory action such as where an Agency violates a "specific" law, rule, regulation or collective bargaining agreement. Exceptions at 11-13. Accordingly, it argues that merely finding a general duty to pay is not equivalent to a mandatory duty to pay and, as such, the Arbitrator failed to show how the parties' agreement, OPM regulation, the Back Pay Act and previous arbitration rulings taken together would create such a duty. Id. at 18-19. It further asserts that under the facts in this matter, there is no evidence supporting a conclusion that it took the last discretionary personnel action prior to the LQA payment becoming mandatory. Id. at 24.
Moreover, the Agency contends that the grievant in this matter experienced no more than "administrative delay" in receiving some of her LQA. Exceptions at 5. It asserts that the mere delay in payment is not the kind of personnel action contemplated by the Back Pay Act. Id. As such it generally argues that pay delays, per se, are not a violation of the Back Pay Act.
The Agency also argues that Arbitrator Wolf's reliance on several previous decisions issued by other arbitrators involving these parties and issues was in error. Specifically, the Agency argues that those decisions do not bind it to change its interpretation of the parties' collective bargaining agreement and are not, therefore, "stare decisis." Id. at 21.
Finally, the Agency argues that,"Bell would deny Grievant's claim that the Agency `misled' her about her post allowance," and that the Arbitrator improperly determined that interest was due with respect to a partial LQA payment the Agency made in August, 1998. Exceptions at 6, n.3.
3. The Award Fails to Draw Its Essence from the Parties' Collective Bargaining Procedure
We construe the Agency's exceptions to include an assertion that the Arbitrator's award fails to draw its essence from the parties' collective bargaining agreement. The Agency notes that nowhere in the parties' agreement is there a provision which sets a specific date for payment of the LQA despite the Arbitrator relying on a portion of that agreement, Article 47, in deciding that interest was owed under the Back Pay Act. Exceptions at 18 n.7, 25. [ v56 p752 ]
4. The Award is Based on Nonfact
The Agency challenges the award on the basis that there was a lack of evidence of any personnel action that was taken, and a lack of any evidence regarding whether the pay action had become ministerial or nondiscretionary. Exceptions at 20.
5. The Arbitrator Exceeded His Authority
The Agency contends that the Arbitrator impermissibly shifted the burden of proof from the grievant to the Agency. It argues that the grievant, not the Agency, is responsible for showing that the Agency's "pay audits were unreliable, unresponsive and nondispositive of the Grievant's pay concerns." Id. at 26. As such, it argues that the Arbitrator exceeded his authority in shifting this burden, and, therefore, the award is deficient. Id.
Finally, the Agency argues that the Arbitrator exceeded his authority when in the absence of a specific law, rule, regulation or provision in the parties' agreement that set forth a specific time for payment, the Arbitrator found payment to be mandatory by a specific date. The Agency argues that the payment of interest in this matter is based on the concept of "restored pay" under Comptroller General decisions as opposed to backpay under the Back Pay Act. Accordingly, it argues that to award interest under the concept of "restored pay" would impermissibly waive sovereign immunity and, as such, the Arbitrator exceeded his authority. Id.
B. Union's Opposition
The Union states that the Agency's exception is merely an attempt to avoid paying interest on a Back Pay Act award for as long as possible. According to the Union, the exception amounts to a "mere disagreement with Arbitrator Wolf's studied interpretation and application of the Back Pay Act." Opposition at 4. The Union asserts that this disagreement does not constitute a basis for reviewing the award and that the exception is nothing but an effort to relitigate the issue one more time. As such, the Union contends, the exception should be summarily dismissed.
The Union contends that the Agency applied several decisions, including Testan, Spagnola, Brown, Bell, Bradley and Cahill, incorrectly and that those decisions actually support the Arbitrator's decision. Id. at 7. The Union argues that these decisions clearly show that backpay, under the Back Pay Act, is warranted where an agency fails to pay employees in accordance with a mandatory or nondiscretionary pay statute. It argues that in this matter there was no discretion to pay LQA under the applicable pay statute. Id. at 8.
Moreover, the Union contends that to the extent that the Agency is arguing that DFAS is outside the control of the Agency and, therefore, the Agency should not be liable for its mistakes, such argument is incorrect because it took the Agency over two years to send the corrective paperwork to DFAS. Id. at 13.
In response to the Agency's argument regarding discretionary actions, the Union states that certifying the payment of principal which is clearly due in accordance with the parties' agreement and the pay statute involves no discretion or exercise of judgment. Id. at 6. It argues that to the extent the Agency is asserting that it never took the "`last discretionary act'" of having its pay agent approve payment, such action is not discretionary under the pay statute in this matter. Id.
Finally, the Union argues that the Agency's assertion that the grievant was not misled as was the plaintiff in Bell has nothing to do with the matter at hand. The Union states that the Agency's other argument, dealing with payment of interest on a partial LQA payment made over a year after payment should have been made, is factually incorrect. Id. at 1-2.
IV. Analysis and Conclusions
A. Office of Personnel Management Regulations Implementing the Back Pay Act May Not Be Challenged in this Proceeding
The Agency's arguments regarding the OPM regulations implementing the Back Pay Act, set forth at 5 C.F.R. Part 550, in effect ask the Authority to review these OPM regulations. The Agency suggests that these regulations go beyond the scope of the Back Pay Act in stating that the omission of a pay action is an unjustified or unwarranted personnel action.
Section 7105 of the Statute enumerates the powers and duties of the Authority, none of which relate to passing judgment on rules or regulations that OPM or any other Federal agency has enacted. See 5 U.S.C. § 7105; American Federation of Government Employees, AFL-CIO v. FLRA, 794 F.2d 1013, 1015 (5th Cir. 1986) (Congress did not intend for the Authority to sit in review of other agencies' regulations). If the Agency wishes to challenge the validity of the OPM regulations implementing the Back Pay Act, the Authority is not the correct forum. See U.S. Department of Defense, Dependents Schools, Bulzbach Elementary School, Bulzbach, Germany and Federal Education Association, 56 FLRA 208, 212 (2000). If the validity of these OPM regulations is in question, the issue must be raised by an interested party in another forum. Therefore, we deny the exception. [ v56 p753 ]
B. The Award Is Not Contrary to Law, Regulation or Sovereign Immunity
When a party's exception challenges an arbitration award's consistency with law, rule, or regulation, the Authority reviews the questions of law raised in the exception and the arbitrator's award de novo. See National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1709 (1998). When applying a de novo standard of review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. Id. at 1710. In making that assessment, the Authority defers to the arbitrator's factual findings. See National Treasury Employees Union, Chapter 50 and U.S. Department of the Treasury, Internal Revenue Service, Carolina District, Charlotte, North Carolina, 54 FLRA 250, 253 (1998).
Here, not only did the Arbitrator determine that the Agency violated 20 U.S.C. § 905, but he found that the Agency violated the grievant's contractual right to receive timely payment for the sums owed the grievant. This is sufficient to constitute an unjustified or unwarranted personnel action. Id.; see U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 785 (1998)(violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Back Pay Act).
The Agency's Back Pay Act arguments in this case are encompassed by the Back Pay Act arguments made by it in DODEA, Arlington. Here, as there, three interrelated and overlapping arguments are being made: (1) the Back Pay Act does not come into play where the obligation to pay the underlying amount is not in question; (2) delay or omission does not fall under the Back Pay Act unless there is some law, rule or regulation that makes the payment nondiscretionary and by a specific date; and (3) omission or mere delay is not per se an unjustified or unwarranted personnel action. Moreover, the Agency also argues that to the extent that DFAS was at fault, the Agency should not be liable; that the grievant was not misled under case law, which the Agency asserts under Bell as being a necessary prerequisite to liability; and that the Arbitrator improperly calculated interest on the first partial payment of LQA.
In DODEA, Arlington, after thoroughly examining the Agency's Back Pay Act arguments, legal precedent cited, and the arbitral record, we concluded that the exceptions there provided no basis for finding the underlying award contrary to the Back Pay Act. In the present matter, we have again examined the Agency's Back Pay Act arguments, the legal precedent cited in support thereof, and the underlying arbitral record. We conclude, for the same reasons set forth in DODEA, Arlington, that the Agency has not shown that Arbitrator's award in the present case is contrary to the Back Pay Act.
As noted in DODEA, Arlington, the administrative or clerical error rule set forth in Comptroller General precedent specifically recognizes that an error or delay in making payment can constitute an unjustified or unwarranted personnel action under the Back Pay Act, even where the obligation to pay the underlying amount is not in question, and even where there is no nondiscretionary law, rule, or regulation mandating action in accordance with specific criteria or by a specific date. Also, as in DODEA, Arlington, there is no arbitral finding in the present case that omission or delay is, per se, an unjustified or unwarranted personnel action. Rather, the Arbitrator made his finding of an unjustified or unwarranted personnel action based upon a violation of a contractual obligation to make the required payments to the employee in a timely manner. The Authority has found the violation of such a contractual obligation to constitute an unjustified or unwarranted personnel action. See Bulzbach Elementary School, 56 FLRA at 212.
We have reviewed the other judicial precedent relied on by the Agency and find those decisions unpersuasive. [n5] As discussed above, the Arbitrator found that the Agency's failure to timely pay the grievant her LQA under Article 47 of the parties' agreement constituted an unjustified or unwarranted personnel action and that interest was due the employee. Accordingly, the Agency's reliance on the other cited cases is misplaced.
Furthermore, the Agency may be asserting that it has no control over the actions of DFAS and that, implicitly, DFAS shares in liability or is solely liable. [ v56 p754 ] Exceptions at 24. This argument is supported by no cited authority and the Agency's argument is cursory at best. The Agency also acknowledges that it, not DFAS, "restored [the grievant's] unpaid allowances." Exceptions at 4. Therefore, this argument will receive no additional analysis and is dismissed as a bare assertion. See, e.g., National Association of Government Employees, Local R-4-45 and U.S. Department of Defense, Defense Commissary Agency, Fort Lee, Virginia, 55 FLRA 784, 787 (1999).
To the extent the Agency argues that Arbitrator Wolf erred in relying upon several previous decisions issued by other arbitrators involving these parties and issues, we find that the Arbitrator merely adopted the reasoning in those decisions. The record does not indicate that Arbitrator Wolf found that he was bound by those decisions in rendering his conclusions in this matter. Accordingly, this argument is also unpersuasive.
Finally, the two remaining assertions, i.e., the grievant was not misled, as in Bell, and the Arbitrator improperly required interest to be paid on the first partial payment of LQA, provide no basis for modifying or overturning the award. As we noted in DODEA, Arlington, Bell is inapposite because in that case, the court expressly found that no unjustified or unwarranted personnel action was at issue before it. Moreover, the Agency cites to no other authority mandating this requirement. As to the computation of interest, the Arbitrator found that the first partial payment made to the grievant occurred in August 1998, while the LQA owed to the grievant was to have been paid in July 1997. Therefore, the first partial payment did not take place within 30 days of being owed, and there is no inconsistency with the earlier Hockenberry award.
Accordingly, we find that the Arbitrator's award is not contrary to law and deny the Agency's exception.
C. The Award Does Not Fail to Draw Its Essence from the Parties' Agreement
In order for an award to be found deficient as failing to draw its essence from the collective bargaining agreement, it must be established that the award: (1) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to "manifest an infidelity to the obligation of the arbitrator"; or (2) does not represent a plausible interpretation of the agreement; or (3) cannot in any rational way be derived from the agreement or evidences a manifest disregard of the agreement. See United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 575 (1990).
The Agency argues that Article 47 merely establishes "a general duty to ensure that housing is provided in kind or by an allowance," but does not require payment on a set date. Exceptions at 18, n.8. However, the Arbitrator's interpretation of Article 47, that the grievant should be paid in a timely manner, is supported by the parties' past practice of paying this allowance at the end of each pay period and by the reasoning found in three other arbitrable decisions adopted by the arbitrator. Accordingly, we find that the Agency has not demonstrated that the award fails to draw its essence from the parties' agreement and we deny the exception.
D. The Award is Not Based on a Nonfact
To establish that an award is based on a nonfact, the appealing party must demonstrate that a central fact underlying the award is clearly erroneous, but for which a different result would have been reached by the arbitrator. See, e.g., 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); General Services Administration, Region 2 and American Federation of Government Employees, Local 2431, 46 FLRA 1039, 1046-47 (1992). However, this basis for finding an arbitration award deficient does not permit the appealing party to dispute an arbitrator's findings of fact.
Moreover, an arbitrator's legal conclusions cannot be challenged on the grounds of nonfact. See, e.g., National Federation of Federal Employees, Local 561 and U.S. Department of the Army, U.S. Army Corps of Engineers, Mobile, Alabama, 52 FLRA 207, 210-11 (1996); U.S. Department of the Navy, Philadelphia Naval Shipyard and Philadelphia Metal Trades Council, 39 FLRA 590, 605 (1991). Arbitrator Wolf made the determination that the Agency owed interest on the monies owed the employee under the grievance. The Agency's exception is not based on allegedly erroneous facts, but rather on the legal conclusions reached by the Arbitrator concerning the applicability of the Back Pay Act and its authorization for the payment of interest. As such, the exception provides no basis to overturn the award and we deny the exception. [ v56 p755 ]
E. The Arbitrator Did Not Exceed His Authority
An arbitrator exceeds his or her authority when the arbitrator fails to resolve an issue submitted to arbitration, resolves an issue not submitted to arbitration, disregards specific limitations on his or her authority, or awards relief to persons who are not encompassed within the grievance. U.S. Department of Defense, Army and Air Force Exchange Service and American Federation of Government Employees (Worldwide Consolidated Bargaining Unit), 51 FLRA 1371, 1378 (1996).
The Agency's argument is not clear when applied to the record in this matter. While the Agency claims the Arbitrator exceeded his authority by shifting the burden of proof to the Agency, the award does not reveal such a shift. Moreover, arbitrators are not constrained to apply any particular burden of proof in the absence of a contractual or statutory burden. See American Federation of Government Employees, Local 2250 and U.S. Department of Veterans Affairs, Medical Center, Muskogee, Oklahoma, 52 FLRA 320, 324 (1996). Therefore, the Agency has not shown that the Arbitrator exceeded his authority.
The Agency also contends that the Arbitrator exceeded his authority by determining that interest was due in the absence of a specific law, rule, regulation or provision in the parties' agreement mandating the time for payment of LQA. The Agency claims that the Arbitrator ignored sovereign immunity by awarding interest for a remedy based under the concept of "restored pay" as opposed to backpay under the Back Pay Act. However, this argument is little more than the Agency again seeking analysis of one of its contrary to law arguments. We have determined that the Arbitrator's award in this regard is not contrary to law. Accordingly, this exception is denied.
The Agency's exceptions are denied.
Footnote # 1 for 56 FLRA No. 125