[ v56 p768 ]
56 FLRA No. 128
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 case is before the Authority on exceptions to an award of Arbitrator William A. Babiskin 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 payment of a "post allowance" due the grievant was covered by the Back Pay Act, and that interest was owing to the grievant on that payment. [n1] For the reasons that follow, we conclude that the Agency has not established 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
The grievant in this case is a teacher employed by the Department of Defense Dependents Schools in Germany. Under applicable law and regulation, the grievant qualified for, and is entitled to, a post allowance. [n2] She received that allowance each bi-weekly pay period.
Sometime in 1998, the grievant noticed that her post allowance payments had "significantly decreased for no apparent reason." Award at 3. After numerous inquiries as to the reason for the decrease, which received no response from the Agency, the instant grievance was filed. Subsequent to the filing of the grievance, the Agency paid the grievant $3,365.61 in post allowance which it had determined, pursuant to an audit, was the amount owed. [n3] The remaining issue concerns the interest owed the grievant on that amount under the Back Pay Act.
B. Arbitrator's Award
The Arbitrator stated the issues in the case as follows:
1. Did the Agency violate laws, rules, regulations, past practice, the negotiated agreement, Agency Decisions, and/or earlier FLRA/Arbitration decisions by failing to pay the Grievant in a timely manner and by failing to pay interest on the back pay? If so, what shall the remedies be?
2. In regard to [the grievant]:
(a) Did the Agency fail to take necessary actions to timely and properly pay the Grievant? If not, is interest due and if so, what are the Interest Accrual Dates?
(b) Did the Agency's failure to take the necessary actions constitute an Unwarranted and Unjustified Personnel Action (UUPA)?
(c) Should the agency be forced to comply with the Popular Arbitration? [n4] [ v56 p769 ]
(d) Should the Agency be forced to pay correct back pay and/or interest, in accordance with the Back Pay Act, accompanied by an audit demonstrating correct payment?
(e) Should the Arbitrator retain jurisdiction in order to ensure compliance and hear a motion for attorneys' fees and costs?
Award at 1-2.
At the outset, the Arbitrator noted that the issues in this case had been the subject of prior arbitrations between the parties. Specifically, he noted the award of Arbitrator Bloch (Bloch award), which found that "the Agency's failure to pay interest on untimely payments violated the B[ack] P[ay] A[ct] and the parties' collective bargaining agreement." Award at 15. He also noted that the Bloch award rejected the Agency's claim that its untimely payments did not constitute an unwarranted and unjustified personnel action under the Back Pay Act. [n5]
He next discussed the award of Arbitrator Hockenberry (Hockenberry award), which concerned the calculation of the accrual date for interest under the Bloch award. He indicated that the Hockenberry award found that interest on the back pay owed under the Bloch award began to accrue on the effective date of the withdrawal of pay, allowances, and/or differentials. [n6]
Finally, the Arbitrator discussed the Popular award, indicating that the award concerned the computation of interest for two different types of claims concerning delay in payment. According to the Arbitrator, the Popular award distinguished between Group A claims, which involved a 30-day grace period for interest, and Group B claims, which involved a 60-day grace period for interest. He noted as well that the Popular award determined that the interest accrual date "is the day of erroneous pay or omission of payment." Id. at 17. [n7]
The Arbitrator stated that, although arbitration awards are not generally considered binding precedent, "due respect" should be accorded "a well-reasoned award concerning the same parties and the same contract language." Id. at 18.
Turning to the instant case, the Arbitrator found that the parties "agree that not every 'delay' and/or 'error' in payment automatically constitutes [an unjustified and unwarranted personnel action] giving rise to the right to interest under the Back Pay Act[,]" and that issues must be resolved on a case-by-case basis. Id. at 19. In addition, he found that the parties did not dispute that the grievant "was entitled to receive the post allowance under the contract and applicable law" or the amount of the post allowance that she should have received. Award at 14. In this regard, the Arbitrator found that "the record evidence" established that the post allowance was payable retroactive to the December 31, 1997 pay date. Id. Specifically, he found that testimony and documentary evidence established that, by past practice, employees are paid "bi-weekly" and that they are paid 12 days after the end of the particular pay period involved. Id. n.14. He further found that the parties had agreed, in their 1996 Memorandum of Understanding (1996 MOU), "to continue the payment practices then in effect." Id.
The Arbitrator rejected the Agency's interpretation of the Back Pay Act. In particular, he found that, under the Back Pay Act, employees adversely affected by an unjustified or unwarranted personnel action resulting in a withdrawal or reduction in pay are entitled to back pay and interest. He also found that the Back Pay Act provides that the term "personnel action" includes the omission or failure to take an action or confer a benefit. In this regard, he stated that applicable Office of Personnel Management (OPM) regulations provide that unjustified or unwarranted personnel actions include acts of omission with respect to nondiscretionary provisions of law, Executive Order, regulation, or collective bargaining agreement. He found that he had no authority to resolve the Agency's claims concerning the validity of OPM's back pay regulations.
As to the Agency's actions in this case, the Arbitrator found that the Agency "deliberately refused to pay [the grievant] monies she was clearly entitled to receive in a proper and timely fashion." Award at 20. The Arbitrator stated that the Agency's action was "patently unreasonable" because the Agency concedes that the [ v56 p770 ] grievant "was entitled to the back pay at issue and never offered an explanation for the delay in payment." Id.
The Arbitrator rejected the Agency's claim that it was under no obligation to pay the grievant "'on a date certain.'" Id. He found that the claim was inconsistent with "the contract, the pay statute, the past practice, the three prior arbitrations, and the decisions of the FLRA between the parties concerning these same issues." Id. Specifically, noting that, under Federal Personnel Manual Bulletin 550-65, "administrative error" constitutes an "omission" under the Back Pay Act, he found that administrative error and delays can constitute unjustified and unwarranted personnel actions. Id. n.25. He also found that the "post allowance benefit is clearly 'non-discretionary' and 'mandatory' in nature" and that it is "virtually automatic." Id. n.26, citing Brown v. Secretary of the Army, 918 F.2d 214, 220 (D.C. Cir. 1990) (Brown). He concluded that the grievant "had a right to be paid the post allowance on a bi-weekly basis . . . under the contract." Id. at 20.
Noting that the Agency did not except to the merits of the Bloch, Popular, and Hockenberry awards, the Arbitrator found that those awards were binding on the parties and on him and that they constituted an "extension" of the parties' collective bargaining agreement. Id. at 21. Finding that the post allowance concerned "a non-discretionary benefit under the collective bargaining agreement and applicable statutes, rules, and regulations[,]" the Agency's action in failing to timely pay the grievant that allowance constituted an unjustified or unwarranted personnel action within the meaning of the Back Pay Act. Id.
The Arbitrator summarized the findings of fact underlying his award as follows:
1. The Agency violated the collective bargaining agreement when it did not pay [the grievant] her post allowance in a timely fashion.
2. This is a Class A Pay Problem within the meaning of the Popular decision.
3. The Agency's conduct constituted an unjustified or unwarranted personnel action which resulted in a withdrawal or reduction in pay to [the grievant].
4. [The grievant] is entitled to $3,365.61 in back pay together with interest computed at the rate provided by law.
5. Each pay date from Pay Date 12/31/97 through 1/13/00 is an interest accrual date.
6. [The grievant] is entitled to "interest on interest." [5 C.F.R. § 550.806(g)]. [n8]
Id. at 22.
Based on those findings, the Arbitrator issued his award as follows:
1. The grievance is sustained in accordance with the accompanying opinion.
2. The Agency violated laws, rules, regulations, past practice, the negotiated agreement, Agency decisions and/or earlier FLRA/Arbitrations by failing to pay [the grievant] in a timely manner and failing to pay interest on the back pay.
3. The Agency's failure to take necessary actions to timely and properly pay [the grievant] constituted an unjustified or unwarranted personnel action which requires the payment of interest.
4. This is a Class A Pay Problem within the meaning of the Popular arbitration. The Agency is required to comply with same.
5. [The grievant] is entitled to $3,365.61 in back pay with interest, said interest to be calculated in a manner consistent with applicable law, rules and regulations. The Agency is directed to pay said interest forthwith.
6. The Arbitrator hereby retains jurisdiction to monitor compliance with the terms and conditions of this award as well as to entertain any motions for additional relief, including but not limited to attorneys' fees.
Id. at 23.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the Arbitrator's award is deficient under section 7122(a) of the Statute because it is contrary to the Back Pay Act. Specifically, the Agency argues that the grievant is not entitled to interest under the Back Pay Act because the Agency's delay in paying her the post allowance owed her does not constitute an unjustified or unwarranted personnel action under that statutory provision. The Agency states that "[i]nterest is due only on back pay paid under the Back [ v56 p771 ] Pay Act, and there has been no violation of the Back Pay Act in this case." Exceptions at 18.
In this regard, the Agency contends that the Back Pay Act constitutes a waiver of sovereign immunity and that, as such, it is to be narrowly construed. According to the Agency, even if delay in paying the grievant the post allowance owed her constitutes an omission within the meaning of the Back Pay Act, such an omission constitutes an unjustified or unwarranted personnel action only if it violates a mandate of law, regulation, or the collective bargaining agreement, citing Brown. [n9] The Agency asserts that there is no legal, regulatory, or contractual mandate requiring timely payment of a post allowance. Citing Synita Revels, GSBCA 14935-RELO, December 9, 1999 (Revels), the Agency also contends that the type of pay involved must be the type of pay that is covered by the Back Pay Act. The Agency states that "there is no reason to conclude that the [p]ost [a]llowance is the type of pay and allowances covered by the Back Pay Act." Id. at 14.
In particular, the Agency maintains that, "[i]n order to support a decision under the Back Pay Act," the Arbitrator "must identify the specific actions and conditions unambiguously specified in law, rule, regulation or collective bargaining agreement that render the duty to pay, or the omission thereof, nondiscretionary and mandatory in order to conclude that interest is payable." Id. at 25. The Agency contends that the Arbitrator errs "in concluding that the Agency's past pay practice establish[es] a mandatory duty with respect to a nondiscretionary act." Id. at 23. [n10] The Agency also contends that "there are in this case no memoranda of understanding that dictate when the [p]ost [a]llowance must be paid." Id. at 25. The Agency specifically claims that the Arbitrator has not "identified any law, rule, regulation or collective bargaining agreement that mandates the Agency to pay [the grievant] by a certain date, nor has evidence been presented that even the last discretionary personnel action or pay action was taken to authorize her pay." Id. at 30.
Moreover, the Agency claims that by placing his interpretation of the parties' collective bargaining agreement "above the legal injunction to narrowly construe language that waives sovereign immunity[,]" the Arbitrator has "expanded the waiver of sovereign immunity granted by the Back Pay Act to embrace all manner of delay in paying entitlements[.]" Id. at 28. In this regard, the Agency notes that contract interpretation is not "uniform" among arbitrators and that the Arbitrator found that the grievance was a Group A claim under the Popular award, but also found that "each pay period established a new interest accrual date." Id. at 29. The Agency also states that the Arbitrator "concluded that the Agency's delay in paying principal amounts was [an unjustified or unwarranted personnel practice] that warranted interest, and seemingly, that the Agency's delay in paying that principal and interest was a separate [unjustified or unwarranted personnel practice] warranting the calculation of interest on the sum of the principal and the interest earned up to the date of settlement." Id.
More generally, the Agency questions whether, by providing for omissions in making pay action to constitute unjustified or unwarranted personnel actions, OPM regulations improperly extend the Back Pay Act. The Agency also states that, by amending the Back Pay Act to include omissions to act or confer a benefit, Congress intended only to incorporate interpretations of the Back Pay Act by OPM and the Comptroller General prior to 1978 and contends that, to the extent the Arbitrator's conclusions are broader than that, they are inconsistent with the Back Pay Act. In any event, the Agency argues that even if "a pay action can stand alone as a 'personnel action' under the Back Pay Act, the rules used to determine whether the personnel action is mandatory and nondiscretionary must apply equally to determine if the pay action is mandatory and nondiscretionary. Thus, a pay action can be a [unjustified and unwarranted personnel action] only after it can be demonstrated unequivocally that the pay action must be processed or paid by a specific time, and that the pay action is nondiscretionary." Id. at 30 (emphasis in original).
B. Union's Opposition
According to the Union, the Agency "relies on 'mere delay' as the linchpin" of their exceptions." Opposition at 1. The Union contends, however, that the "Agency's arguments ignore the 'plain meaning' of the terms 'omission or failure to take an action or confer a benefit.'" Id. at 2. The Union states that "[i]f these [ v56 p772 ] terms, taken directly from the Back Pay Act and 5 C.F.R. [part] 550, do not mean 'administrative error' or 'delay,' what else can they mean?" Id.
Citing U.S. Department of Defense Dependents Schools, Bulzbach Elementary School, Bulzbach, Germany and Federal Education Association, 56 FLRA 208 (2000) (Bulzbach), the Union asserts that "[i]f an [a]rbitrator finds a 'contractual requirement' in the [collective bargaining agreement] to pay employees in a 'timely manner,'" the arbitrator's award will not be found deficient under the Back Pay Act by the Authority. According to the Union, the Arbitrator found "a 'past practice' of paying teachers on a bi-weekly basis for work performed in the preceding pay period" and that the Agency "agreed in writing to continue the payment practices then in effect." Id. at 3.
The Union distinguishes cases relied on by the Agency. Specifically, the Union contends that the Agency's reliance on Revels is misplaced because that case concerned a claim for reimbursement for real estate transaction expenses, an incidental expense of a transfer, but not an entitlement to payment as is the post allowance in this case. As to Abramson, the Union contends that the case supports its position because the court "specifically found that [an unjustified and unwarranted personnel action] resulting from a delay in payment had been committed, and that this triggered the Back Pay Act." Opposition at 7. The Union distinguishes Bradley on the ground that the plaintiffs in that case, unlike the grievant herein, did not suffer a reduction in pay and did not seek correction of an unjustified or unwarranted personnel action.
The Union argues that Spagnola and Brown support its position. According to the Union, the holding in Spagnola, denying a higher rate of pay to illegally detailed employees, was based on the absence of a nondiscretionary or mandatory requirement of a pay statute, whereas 20 U.S.C. § 906 and DoD Directive 1400.25-M mandate the payment of the post allowance in this case. As to Brown, the Union notes the court's holding that if a personnel action is mandatory, once certain conditions are met, the Back Pay Act affords a remedy. The Union asserts that 20 U.S.C. § 906 and the "DoD Directive give [the Agency] no room for exercising discretion or judgment in paying the [p]ost [a]llowance." Opposition at 8. In this regard, the Union claims that the Agency's only discretion involves reviewing an employee's application for the post allowance and forwarding the proper paperwork to the Agency's pay agent.
The Union contends that all the Comptroller General cases holding that where an agency has no discretion as to a personnel action, a failure to take that action provides a remedy under the Back Pay Act support its position, particularly cases holding that administrative errors in pay actions are remedial under the Back Pay Act. In addition, the Union maintains that even those cases where the Comptroller General found that an agency had discretion support its position because "each of these cases makes it quite clear that the result would have been different had the agencies had no discretion [due to] a mandatory provision [like the DoD Directive] or [20 U.S.C. § 906] or if there were a delay in payment after any discretion were exercised." Opposition at 9-10.
The Union disputes the Agency's claim that the parties' collective bargaining agreement does not address the payment of a post allowance. According the Union, the agreement requires adherence to laws and regulations in effect prior to September 18, 1989 and 20 U.S.C. § 906 was in effect prior to that date and, thus, the agreement "does address the payment of a [p]ost [a]llowance." Id. at 11.
As to the Agency's argument that "the act of certifying a payment is 'the last internal discretionary act' that is taken by the payroll officer before authorizing disbursement," the Union argues that the "certifying principal which is clearly due in accordance with . . . 20 U.S.C. §§ 901-907 . . . involves no discretion or exercise of judgment." Id. According to the Union, if the Agency is correct, the Agency would never have to pay its employees if a payroll officer did not certify the payment.
IV. Analysis and Conclusions
A. Standard of Review
When a party's exception challenges an arbitration award's consistency with law, the Authority reviews the question of law raised by the 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)). When applying a de novo standard of review, the Authority assesses whether the arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. See 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). In making that assessment, the Authority defers to the arbitrator's factual findings. See id. [ v56 p773 ]
B. The Requirements of the Back Pay Act
The Agency's exceptions in this case challenge the Arbitrator's award of interest to the grievant under the Back Pay Act. In order to be eligible for relief under the Back Pay Act, the grievant must be found by an "appropriate authority under applicable law, rule, regulation, or collective bargaining agreement to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee[.]" 5 U.S.C. § 5596(b)(1). See also Social Security Administration, Office of Hearings and Appeals, Falls Church, Virginia and American Federation of Government Employees, Local 3615, 55 FLRA 349, 353 (1999) (citing U.S. Department of Health and Human Services and National Treasury Employees Union, 54 FLRA 1210, 1218 (1998)). Such an individual is then entitled to receive, among other things, "an amount equal to all or any part of" the pay, allowances, or differentials the employee would have earned or received if the improper personnel action had not taken place. 5 U.S.C. § 5596(b)(1)(A)(i). These amounts are payable with interest.
Thus, in order for the grievant to qualify for interest on the post allowance paid her in this case, the Agency's failure to pay that allowance must have constituted an unjustified and unwarranted personnel action under the Back Pay Act.
C. 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 that implement the Back Pay Act, 5 C.F.R. Part 550, in effect ask the Authority to review and construe those regulations to find that a pay action is an inadequate basis to constitute 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 and regulations that OPM or any other Federal agency has promulgated. 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 OPM regulations implementing the Back Pay Act, the Authority is not the correct forum. See Bulzbach, 56 FLRA at 212. If the validity of the OPM regulations is in question, the issue must be raised by an interested party in another forum. Therefore, we deny the exception.
D. The Award Is Not Contrary to Law, Regulation, or Sovereign Immunity
As noted above, a violation of a provision of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Back Pay Act. See, e.g., U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 785 (1998). The Arbitrator found that the parties had a past practice of bi-weekly pay periods with a pay date 12 days after the end of the pay period. He also found that the parties' 1996 MOU included an agreement to continue those pay practices. Finally, he specifically found that, consistent with that agreement, the obligation to pay the grievant's post allowance was nondiscretionary, mandatory, and "virtually automatic" within the meaning of Brown. Thus, we reject the Agency's argument, citing Brown, that there is no such nondiscretionary mandate in this case. [n11] Accordingly, the Arbitrator concluded, and we find, that the failure of the Agency to timely pay the grievant the post allowance owed her constituted a violation of the parties' agreement and an unjustified and unwarranted personnel action under the Back Pay Act. See Bulzbach, 56 FLRA at 212.
Further, the Agency's Back Pay Act arguments in this case are encompassed by the Back Pay Act arguments made by it in U.S. Department of Defense, Education Activity, Arlington, Virginia and Federal Education Association, 56 FLRA No. 119 (September 26, 2000) (DODEA, Arlington). Here, as there, three interrelated and overlapping arguments are 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 by a specific date; and (3) omission or mere delay is not per se an unjustified or unwarranted personnel action.
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 [ v56 p774 ] support thereof, and the underlying arbitral record. Specifically, as argued by the Union in its opposition to the Agency's exceptions, many of the court and Comptroller General cases relied on by the Agency appear to be either inapplicable or are supportive of the Arbitrator's decision. [n12] We conclude, for the same reasons set forth in DODEA, Arlington, that the Agency has not shown that the Arbitrator's award in the present case is contrary to the Back Pay Act. [n13]
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.
Moreover, we note the Agency's statement that a post allowance does not constitute an "allowance" within the meaning of the Back Pay Act. The Agency, however, provides no support for its statement. The Agency's statement, therefore, even assuming it is a claim that the award is contrary to law, does not provide a basis for finding the award deficient. See Norma J. Raymond, 59 Comp. Gen. 261 (1980) (employee wrongfully dismissed entitled under Back Pay Act to receive all allowances she would have earned if she had not been dismissed, including post allowance).
Finally, we note the Agency's statement that the Arbitrator's award seemed to treat the Agency's failure to pay principal and interest in a timely manner as a separate unjustified and unwarranted personnel action warranting "interest on interest." The Agency does not explicitly except to that aspect of the award. Specifically, the Agency makes no attempt to demonstrate that the award in that respect is inconsistent with 5 C.F.R. § 550.806(g). Thus, we find no basis in the Agency's exceptions for finding that the award of "interest on interest" under 5 C.F.R. § 550.806(g) is deficient. [n14]
E. The Award Does Not Fail to Draw Its Essence from the Parties' Agreement
The Agency states generally that the collective bargaining agreement does not contain provisions mandating the payment of a post allowance by a date certain. Even if we assume that the Agency's statements constitute a claim that the Arbitrator's interpretation of the parties' agreement does not draw its essence from that agreement, we find that the Agency has not demonstrated that the award is implausible, irrational, or in manifest disregard of the parties' collective bargaining agreement. Thus, the Agency's statements are not sufficient to demonstrate that the award in this regard is deficient. See, e.g., U.S. Department of the Treasury, U.S. Customs Service, El Paso, Texas and National Treasury Employees Union, Chapter 143, 55 FLRA 553 (1999).
F. The Award Is Not Based on a Nonfact
We note the Agency's statement that no evidence has been presented establishing that the last discretionary act was taken to authorize the grievant's pay. Even if we were to treat the Agency's statement as an exception on the ground of nonfact, the Agency has not shown that the award is deficient on that ground. Specifically, the Agency has not demonstrated that the alleged factual finding constitutes a central fact underlying the award, that the fact is clearly erroneous, and that but for that error 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, 593-94 (1993). Moreover, to the extent that the Agency's statement is intended to challenge the legal validity of the Arbitrator's application of the Back Pay Act, we note that an arbitrator's legal conclusions cannot be challenged on the basis 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).
Accordingly, we deny the Agency's exceptions.
The Agency's exceptions are denied. [ v56 p775 ]
1. The Back Pay Act, 5 U.S.C. § 5596, provides, in relevant part, as follows:
§5596. Back pay due to unjustified personnel action
. . . .
(b)(1) An employee of an agency who, on the basis of a timely appeal or an administrative determination (including a decision relating to an unfair labor practice or a grievance) is found by appropriate authority under applicable law, rule, regulation, or collective bargaining agreement, to have been affected by an unjustified or unwarranted personnel action which has resulted in the withdrawal or reduction of all or part of the pay, allowances, or differentials of the employee--
(A) is entitled, on correction of the personnel action, to receive for the period for which the action was in effect--
(i) an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred, less any amounts earned by the employee through other employment during that period[.]
. . . .
(2)(A) An amount payable under paragraph (1)(A)(i) of this subsection shall be payable with interest[.]
. . . .
(5) For the purpose of this subsection, "grievance" and "collective bargaining agreement" have the meanings set forth in section 7103 of this title . . . "unfair labor practice" means an unfair labor practice described in section 7116 of this title . . . and "personnel action" includes the omission or failure to take an action or confer a benefit.
2. 5 C.F.R. § 550.806(g) provides as follows:
(g) To the extent administratively feasible, the agency shall issue payments of back pay and interest simultaneously. If all or part of the payment of back pay is issued on or before the date on which accrual of interest ends and the interest payment is issued after the payment of back pay is issued, the amount of the payment of back pay shall be subtracted from the accrued amount of back pay and interest, effective with the date the payment of back pay was issued. Interest shall continue to accrue on the remaining unpaid amount of back pay (if any) and interest until the date on which accrual of interest ends.
Footnote # 1 for 56 FLRA No. 128
It is undisputed that, as stated by the Arbitrator, a "post allowance" is a cost of living adjustment paid to eligible Federal employees who work in foreign countries. It is designed to address the fluctuations in currency exchange rates. Award at 2. Relevant text of the Back Pay Act is set forth in the Appendix to this decision.
Footnote # 2 for 56 FLRA No. 128
The "post allowance" is provided for in 20 U.S.C. § 906 and is governed by regulations issued by the Department of State, Department of State Standardized Regulation, chapter 200, and Department of Defense, DoD Directive 1400.25-M (DoD Directive). See Attachments 1-3 to Union's Opposition.
Footnote # 3 for 56 FLRA No. 128
There is no dispute that this is the amount in post allowance owed the grievant. The Arbitrator found that the Agency's reimbursement covered each pay period from December 31, 1997, when the failure to pay the post allowance commenced, to January 13, 2000, on which date the grievant was paid the amount owed to her. Award at 14.
Footnote # 4 for 56 FLRA No. 128
In a previous arbitration case between the parties involving the Agency's failure to timely pay employees, Arbitrator Popular found that, although the Agency had reimbursed employees the correct amount for improperly withheld pay, the Agency was also required to pay employees interest on that amount under the Back Pay Act (Popular award). See U.S. Department of Defense, Dependents Schools and Federal Education Association, 54 FLRA 514 (1998) (FEA I), wherein the Agency challenged the award of attorney fees but not the merits of the underlying award.
Footnote # 5 for 56 FLRA No. 128
The Agency did not file exceptions to the Bloch award and, thus, the award became final and binding. See U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association, 54 FLRA 773, 782 (1998) (FEA II).
Footnote # 6 for 56 FLRA No. 128
The Arbitrator noted that the Agency did not except to the merits of the Hockenberry award, but did file exceptions to Arbitrator Hockenberry's award of attorney fees. See FEA II. The Authority rejected those exceptions. Id.
Footnote # 7 for 56 FLRA No. 128
The Arbitrator stated that the Agency did not except to the merits of the Popular award, but filed exceptions concerning Arbitrator Popular's subsequent award of attorney fees. See FEA I. The Authority rejected those exceptions. Id. The Arbitrator also indicated that the parties stipulated that the grievance in this case is a Group A claim within the meaning of the Popular award. Award at 14.
Footnote # 8 for 56 FLRA No. 128
Footnote # 9 for 56 FLRA No. 128
The Agency cites other court and Comptroller General decisions in support of this proposition. See, e.g., Hambsch v. U.S., 857 F.2d 763 (Fed. Cir. 1988) (Hambsch); Spagnola v. Stockman, 732 F.2d 908 (Fed. Cir. 1984) (Spagnola); Bradley v. United States, 42 Fed. Cl. 333 (1998) (Bradley); Abramson v. U.S., 42 Fed. Cl. 621 (1998) (Abramson); Bell v. United States, 23 Ct. Cl. 73 (1991); Turner-Caldwell--Reconsideration in View of Wilson v. United States, 61 Comp. Gen. 408 (1982) (Turner-Caldwell III); Internal Revenue Service Employees--Retroactive Promotion with Back Pay, 54 Comp. Gen. 888 (1975) (Internal Revenue Service Employees).
Footnote # 10 for 56 FLRA No. 128
The Agency acknowledges that it has "a general policy to pay employees regularly, within two weeks or a month of performing services," citing DoD Directive 1400.13, but maintains that the policy "does not require payment by date certain, and does not establish that the pay is a mandatory duty[.]" Exceptions at 23 n.4.
Footnote # 11 for 56 FLRA No. 128
Footnote # 12 for 56 FLRA No. 128
In this regard, contrary to the Agency's contention, the failure to timely pay the grievant the post allowance to which she was entitled is not the same as a miscalculation of employees' Law Enforcement Availability Pay, as in Bradley. Other cases are similarly inapplicable: Bell, for example, concerned involuntary retirement based on agency misinformation. We also agree with the Union's distinction of Revels from this case.
Footnote # 13 for 56 FLRA No. 128
We note the Agency's conclusionary statement that, in violating the scope of the Back Pay Act and waiving sovereign immunity by authorizing the payment of interest, the Arbitrator exceeded his authority. We find that this statement merely rephrases the Agency's claim that the award is contrary to law, rather than setting forth a separate exception.
Footnote # 14 for 56 FLRA No. 128