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57 FLRA No. 5
OF ELECTRICAL WORKERS
COUNCIL NO. 1
U.S. DEPARTMENT OF ENERGY
WESTERN AREA POWER ADMINISTRATION
March 15, 2001
Before the Authority: Dale Cabaniss, Chairman; Donald S. Wasserman and Carol Waller Pope, Members. [n1]
I. Statement of the Case
This matter is before the Authority on exception to an award of Arbitrator Duane Buckmaster filed by the Union under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exception.
The Arbitrator resolved a negotiation impasse concerning whether the establishment of regional rates of pay, as opposed to a national rate of pay, is appropriate for the Agency's prevailing rate employees. The Arbitrator rejected the Union's argument that a national rate was appropriate and instead imposed separate pay rates for each of the Agency's four regions. For the reasons that follow, we remand the award to the parties for resubmission to the Arbitrator for clarification of the basis of the award.
The bargaining unit involved in this case consists of employees who bargain terms and conditions of employment, including pay and pay practices, in accordance with § 9(b) of the Prevailing Rate Systems Act, and with § 704 of the Civil Service Reform Act of 1978. [n2]
The Agency's operations are divided into four regions, with ten utilities existing throughout the regions. The Arbitrator noted that "up to and including the 1966-1999 agreement, the parties have surveyed the same ten utilities to provide data on which to base prevailing rates." Award at 2. [n3] In this regard, an attachment to the 1966-1999 agreement states that "`[t]here will be equal pay for substantially equal work for all unit employees within the [Agency].'" Id. at 3 (quoting agreement). In 1996, the Union asserted that the practice of paying all employees at a national average rate would provide less than the prevailing rate in certain regions. Consequently, the parties negotiated two Memoranda of Understanding (MOUs) on December 19, 1996, which created a pay exception to the national rate for workers employed in two of the four regions.
When negotiating a new collective bargaining agreement in 1999, the parties were able to reach agreement on all issues except wage rates. The parties submitted the impasse to arbitration, where the Arbitrator characterized the issue to be resolved as "whether or not the establishment of regional rates of pay is appropriate, as opposed to so-called `national rates' or system-wide rates." Id. at 7.
The Agency argued before the Arbitrator that he should award separate pay rates for each of the Agency's four regions. In support, the Agency argued that "[a]t the time the Agency-wide concept was adopted the difference between the highest and lowest paid utility surveyed was about two dollars per hour . . . [t]his difference is now almost eight dollars . . . [i]t is not feasible to establish a common pay rate for areas so widely disparate as these and remain within the letter and spirit of the law" Id. at 4.
The Union argued that the Arbitrator should award pay rates consistent with the parties' practice of paying "all [Agency] employees a single rate based on the national survey average." Id. at 6. The Union noted that the only deviation from the national rate was set forth by a 1996 MOU negotiated between the parties, which provided that workers employed in two regions would have pay rates over the national average. [ v57 p8 ]
The Arbitrator rejected the Union's argument that a national pay rate should prevail. The Arbitrator reasoned as follows:
To consider all four regions of [the Agency] combined as a local wage area, encompassing as they do a major part of the [W]estern United States, is not reasonable, especially when wage rates for comparable work vary to the extent that they do in this case. Rates established by region would be, in my view, much more in keeping with the intent and meaning of the law than rates based on more extensive geographical boundaries. Although the parties have, in the past, set wages according to averages of utility wages throughout [the Agency's] entire service area, custom and past practice cannot justify conflict with the law.
Id. at 7. As support for his reasoning, the Arbitrator stated that "the applicable provisions of the law are contained in 5 U.S.C. § 5343(d)." [n4] Id. As a result, the Arbitrator imposed a separate prevailing rate for each of the four regions, based on pay rates for comparable positions within each region. In addition, the Arbitrator ordered that, in any instance where the new regional rate of pay is lower than the current rate, pay shall be frozen at the existing rate.
III. Positions of the Parties
A. Union's Exception
The Union contends that the award is contrary to law. Specifically, the Union contends that the award "is based entirely" on subchapter IV of chapter 53 of title 5, and "primarily on" 5 U.S.C. § 5343. Exception at 1. The Union asserts that the Arbitrator should have recognized that the bargaining unit is covered by § 704's prescription that the parties shall negotiate over pay and pay practices "without regard to" subchapter IV of chapter 53. Id. In a letter to the Arbitrator requesting that he reconsider the award, the Union explained that, because the Arbitrator was not required by law "to restrict wage agreements and their geographical areas of application[,]" he should reexamine the evidence and positions of the parties and render an award that "is consistent with the scope of bargaining required and allowed under [s]ection 704." Letter from Union to Arbitrator 2-3 (June 27, 2000) (attached to Union's exception).
B. Agency's Opposition
The Agency contends that the Union did not raise before the Arbitrator any argument concerning § 704. As such, the Agency contends that the Union's argument should be barred from consideration pursuant to § 2429.5 of the Authority's Regulations.
In the alternative, the Agency disagrees with the Union's position that the award is contrary to law. In particular, the Agency contends that, because the Arbitrator found that the Agency's pay proposal "complied with the intent and meaning of prevailing rates law," the Arbitrator satisfied the requirements of § 704. Opposition at 4. In support, the Agency cites United States Dep't of Interior, Bureau of Reclamation, Rio Grande Project v. FLRA, 908 F.2d 570, 574 (10th Cir. 1990) (Dep't of Interior), for the proposition that "negotiation over pay is allowed only to the extent that the specific proposals are in accordance with prevailing local practice." Id. at 3.
IV. The Union's Exception is Not Barred by § 2429.5 of the Authority's Regulations
Under § 2429.5 of the Authority's Regulations, the Authority will not consider issues that could have been, but were not, raised before the arbitrator. [n5] See, e.g., AFGE, Local 2612, 55 FLRA 483, 486 (1999). In this case, the record demonstrates that the parties are required to bargain over prevailing rates and pay practices in accordance with § 704. In this connection, the Union excepts to the Arbitrator's award based on his application of 5 U.S.C. § 5343(d), instead of § 704, to the wage negotiations under consideration. The issue before the Authority is whether the Union should have raised before the Arbitrator that bargaining between the parties was not covered by § 5343(d), as opposed to sections 9(b) and 704, which are codified as notes to § 5343. The record does not demonstrate that either party raised before the Arbitrator the question of what specific legal authority governed the parties' negotiations. That [ v57 p9 ] is, the award does not reveal a dispute between the parties as to the application of § 704 so as to suggest that the Arbitrator might fail to apply § 704. In these circumstances, the Union cannot fairly be charged with having to anticipate a point of law that it alleges was erroneously relied on by the Arbitrator in rendering his decision. Cf. Dep't of the Air Force, Grissom Air Force Base, Ind., 51 FLRA 7, 11 (1995) (§ 2429.5 of Authority's Regulations did not preclude consideration of General Counsel's exceptions to judge's decision when those exceptions were in response to issues that arose only after judge's findings); PASS, Dist. No. 1, MEBA/NMU (AFL-CIO), 48 FLRA 764, 768 n* (1993) (§ 2429.5 of Authority's Regulations did not preclude union's argument that arbitrator failed to consider standards set forth by law and regulation, when the issue presented by union's exception arose only after issuance of the award). Accordingly, we will consider the Union's exception. [n6]
V. Analysis and Conclusions
A. The Authority Applies a De Novo Standard of Review
An exception alleging that an award is contrary to law is reviewed by the Authority de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying the standard of de novo review, the Authority assesses whether the arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. United States Dep't of the Treasury, United States Customs Service, Portland, Or., 54 FLRA 764, 770 (1998) (citing NFFE, Local 1437, 53 FLRA 1703, 1710 (1998)). In making that assessment, the Authority defers to the arbitrator's underlying findings of fact. Id.
B. The Award is Remanded to Clarify the Scope of the Arbitrator's Reliance on § 5343(d)
"[S]ection 704 was intended to `grandfather' collective bargaining agreements between prevailing rate employees and federal employers that were in effect at the time the Civil Service Reform Act was enacted . . . [and] preserve[ ] for future negotiations those pay practices that had previously [prior to August 19, 1972] been the subject of negotiation." Dep't of Interior, 908 F.2d at 574. See also Columbia Power Trades Council v. United States Dep't of Energy, 671 F.2d 325, 328 (9th Cir. 1982) ("§ 704 was aimed at any inconsistency in provisions of the [Statute] which would limit the areas about which these employees could collectively bargain"). In enacting the Civil Service Reform Act, rather than alter certain historical bargaining patterns and relationships, Congress chose, in § 704, to "provide[ ] certain savings clauses for employees . . . who have traditionally negotiated contracts in accordance with prevailing rates in the private sector." H. Conf. Rep. No. 95-1717, reprinted in Subcommittee on Postal Personnel and Modernization of the Committee on Post Office and Civil Service, 96th Congress, 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, at 827.
Under § 704(b), the parties are required to establish the pay and pay practices of employees in accordance with current prevailing rates and practices in the industry. United States Information Agency v. FLRA, 895 F.2d 1449, 1454-55 (D.C. Cir. 1990). See also NAGE, Local R14-143, 47 FLRA 103 (1993). Consequently, as a condition precedent to his award establishing pay rates for the bargaining unit, the Arbitrator was required by § 704(b) to make a determination consistent with current prevailing rates and pay in the industry. See United States Dep't of the Interior, Bureau of Reclamation, Grand Coulee Project Office, 48 FLRA 499, 508 (1993) (award found contrary to law when arbitrator established pay and pay practices for employees without determining that award was in accordance with prevailing rates and practices in the industry). Further, under § 704(b) the Arbitrator was required to base his award on, and conform it to, that determination. See, e.g., United States Dep't of Interior, Colorado River Storage Project, 36 FLRA 283 (1990) (where the parties stipulated that Sunday premium pay was not a "current prevailing practice," arbitrator's determination that agency was obligated to continue making, or negotiate over making, Sunday premium payments was inconsistent with § 704, and therefore set aside).
Section 704(b)(B) specifically provides that bargaining over pay and pay practices relating to prevailing rate employees shall take place without regard to any provision of subchapter IV of chapter 53 of title 5, United States Code, which includes § 5343. However, in [ v57 p10 ] this case, the Arbitrator mistakenly stated that "the applicable provisions of the law are contained in 5 U.S.C. § 5343(d)," and that "custom and past practice cannot justify conflict with the law." Award at 7. If the Arbitrator believed that he was required by § 5343(d) to impose a different pay rate for employees in each of the Agency's four regions, then the Arbitrator's determination would be inconsistent with § 704. On the other hand, the Arbitrator also stated that the combined wage area proposed by the Union "is not reasonable" and that regional rates would be "much more in keeping with the intent and meaning of the law." Id. These latter statements could reveal an intention by the Arbitrator to use § 5343(d), with emphasis on a "local wage area," as a guide only. Id. If the Arbitrator used § 5343(d) only as a guide for determining § 704's concept of "prevailing rates and pay practices" in the industry, then the award would be consistent with § 704.
We remand the award to the parties for resubmission to the Arbitrator in order for him to clarify whether his award was based on § 5343(d) or whether, as required by § 704, the award is based on current prevailing rates and pay practices in the industry. The Authority's decision does not affect the parties' rights to file exceptions to the award on remand.
Section 9(b) of the PRSA provides as follows:
Sec. 9 (b) The amendments made by this Act shall not be construed to--
(1) abrogate, modify, or otherwise affect in any way the provisions of any contract in effect on the date of enactment of this Act . . . pertaining to the wages, the terms and conditions of employment, and other employment benefits, or any of the foregoing matters, for Government prevailing rate employees and resulting from negotiations between Government agencies and organizations of Government employees;
(2) nullify, curtail, or otherwise impair in any way the right of any party to such contract to enter into negotiations after the date of enactment of this Act . . . for the renewal, extension, modification, or improvement of the provisions of such contract or for the replacement of such contract with a new contract; or
(3) nullify, change, or otherwise affect in any way after such date of enactment . . . any agreement, arrangement, or understanding in effect on such date with respect to the various items of subject matter of the negotiations on which any such contract in effect on such date . . . is based or prevent the inclusion of such items of subject matter in connection with the renegotiation of any such contract, or the replacement of such contract with a new contract, after such date.
Section 704 of the Civil Service Reform Act of 1978 provides as follows:
(a) Those terms and conditions of employment and other employment benefits with respect to Government prevailing rate employees to whom section 9(b) of Public Law 92-392 applies which were the subject of negotiation in accordance with prevailing rates and practices prior to August 19, 1972, shall be negotiated on and after the date of the enactment of this Act in accordance with the provisions of section 9(b) of Public Law 92-392 without regard to any provision of chapter 71 of title 5, United States Code (as amended by this title), to the extent that any such provision is inconsistent with this paragraph.
(b) The pay and pay practices relating to employees referred to in paragraph (1) of this subsection shall be negotiated in accordance with prevailing [ v57 p11 ] rates and pay practices without regard to any provision of--
(A) chapter 71 of title 5, United States Code (as amended by this title), to the extent that any such provision is inconsistent with this paragraph;
(B) subchapter IV of chapter 53 and subchapter V of chapter 55 of title 5, United States Code; or
(C) any rule, regulation, decision or orderrelating to rates of pay or pay practices under subchapter IV of chapter 53 or subchapter V of chapter 55 of title 5, United States Code.
Dissenting opinion of Chairman Cabaniss:
I do not agree with my colleagues that the Union was justified in failing to argue to the Arbitrator that § 704 of the Civil Service Reform Act of 1978, 5 U.S.C. § 5543 note, applied to this interest arbitration case. The majority states that "the Union cannot fairly be charged with having to anticipate a point of law that it alleges was erroneously relied on by the Arbitrator." Slip op. at 5. This conclusion, however, ignores the fact that § 704 "constitutes an exception to the bargaining limitations of the Statute." NAGE, Local R14-143, 56 FLRA 372, 374 (2000). In view of
§ 704's status as an exception, it was incumbent on the Union, as the party seeking to rely on the exception, to demonstrate to the Arbitrator that the requirements of the exception were present in the dispute before him. Cf. IBEW, Local 121, 56 FLRA 609, 612 (2000) (parties to negotiability dispute involving § 704 have burden of creating record sufficient to support a determination as to whether that section applies).
I note that the Agency never had any reason or occasion to "dispute" the applicability of § 704 to this case, since the Union never asserted that the section applied, or presented any evidence that it applied, until after the award had been issued. If, as the majority appears to assume, no such dispute existed, then the Union could have met its burden in this respect through a stipulation.
In Panama Area Maritime/Metal Trades Council, AFL-CIO, 55 FLRA 1199, 1200 (1999) (Panama M/MTC), we dismissed a Union exception contending that an interest arbitration award setting pay levels was contrary to a Department of Labor regulation, because the record did not contain any indication that the Union had apprized the Arbitrator of the alleged conflict between the agency's offer and the regulation. I do not find the instant case to be materially distinguishable from Panama M/MTC. In both cases, the unions involved could and should have informed the arbitrators of the legal bases for their claims. Since the record is devoid of any indication that the Union argued the applicability of § 704 to the Arbitrator prior to the award being issued, I would find that the Union's exception is barred by § 2429.5 of the Authority's Regulations.
Footnote # 1 for 57 FLRA No. 5
Footnote # 2 for 57 FLRA No. 5
Footnote # 3 for 57 FLRA No. 5
Footnote # 4 for 57 FLRA No. 5
A [l]ead agency, in making a wage survey, shall determine whether there exists in the local wage area a number of comparable positions in private industry sufficient to establish wage schedules and rates for the principal types of positions for which the survey is conducted [sic]. The determination shall be in writing and shall take into consideration all relevant evidence, including evidence submitted by employee organizations recognized as representatives of prevailing rate employees in that area.
Award at 7 (emphasis added).
Footnote # 5 for 57 FLRA No. 5
The Authority will not consider evidence offered by a party, or any issue, which was not presented in the proceedings before . . . the arbitrator. The Authority may, however, take official notice of such matters as would be proper.
Footnote # 6 for 57 FLRA No. 5
We note that the Authority's decision in Panama Area Maritime/Metal Trades Council, AFL-CIO, 55 FLRA 1199 (1999), supports the proposition that the Authority will dismiss an exception raising a regulation that should have been raised before the arbitrator. In that case, the union claimed in its exception that the interest arbitrator erred in adopting the agency's proposed terms that were contrary to a pay regulation. The union could have made the claim before the arbitrator, but did not. Here, by contrast, the parties have never disputed that the grievants are not governed by § 5343, and the record is clear in this regard. Accordingly, the Union was under no obligation to argue before the Arbitrator the applicability of that provision to this case.