American Federation of Government Employees, Local 3615 (Union) and Social Security Administration, Office of Hearings and Appeals, Falls Church, Virginia (Agency)
[ v57 p19 ]
57 FLRA No. 7
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 3615
SOCIAL SECURITY ADMINISTRATION
OFFICE OF HEARINGS AND APPEALS
FALLS CHURCH, VIRGINIA
March 28, 2001
Before the Authority: Dale Cabaniss, Chairman; Donald S. Wasserman and Carol Waller Pope, Members.
Decision by Member Pope for the Authority.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Irwin Kaplan 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 exceptions.
The Arbitrator found that the Agency overpaid the grievant. The Arbitrator recommended that the Agency deny the grievant's request that it waive its claim to the overpayment, but that the Agency waive a payment penalty and administrative costs.
For the reasons that follow, we find that the Union has failed to show the award is deficient under § 7122(a) of the Statute. Therefore, we deny the exceptions.
II. Background and Arbitrator's Award
The Agency partially reimbursed the grievant for outstanding overtime pay ("the first payment"). The Agency and the Union subsequently entered into a settlement agreement, whereby the Agency agreed to compensate its employees for outstanding overtime pay due for work performed from 1981 to 1998. Pursuant to the settlement agreement, the Agency paid the grievant an additional amount ("the second payment"). [ v57 p20 ]
Approximately three weeks after the second payment, the Agency informed the grievant that it had erroneously included in that payment money for work covered by the first payment. When the Agency requested reimbursement, the grievant repaid the portion of the overpayment constituting net backpay. However, questioning the accuracy of the Agency's calculation of the overpayment, he refused to reimburse the Agency the amount paid him in interest and sought a waiver of that indebtedness. The grievant subsequently paid taxes on the alleged overpayment, and the Union invoked arbitration pursuant to the parties' 1993 Debt Collection Memorandum of Understanding ("the Memorandum"). Although he did not expressly formulate issues, the Arbitrator explicitly addressed: (1) whether the grievant received an overpayment and, if so, (2) whether any of the indebtedness should be waived. See Award at 7-10.
The Arbitrator concluded that the grievant owed the Agency the remainder of the overpayment and certain taxes related to the overpayment. The Arbitrator found that he did not have the authority to offset the grievant's debt by any outstanding overtime pay earned prior to the periods covered by the settlement agreement because that agreement "provided a negotiated remedy for all of the Agency's violations regarding overtime." Id. at 9. He also found that, in any event, the Union provided no evidence of unpaid overtime work prior to the dates covered by the settlement agreement.
With regard to the Union's request for waiver, the Arbitrator found that the Agency's overpayment was largely attributable to its prior payroll provider and that the Agency promptly notified the grievant of the mistake. He further determined that the grievant was not free to use the overpayment funds as his own. In doing so, the Arbitrator found, the grievant "was knowingly at risk and also had to pay taxes on such funds." Id. Given these considerations, the Arbitrator concluded that the Agency's failure to waive the debt "would not be against equity and good conscience nor against the best interest of the United States within the meaning of either 5 U.S.C. § 5584 or the [Memorandum]." Id. However, he determined that since the Agency had a "long history of errors . . . relative to overtime pay" and had failed to adequately respond to the grievant's requests for information regarding the overpayment, it would be against equity and good conscience for the Agency to also assess a late payment penalty or administrative costs against the grievant. Id. at 9-10.
III. Positions of the Parties
A. Union's Exceptions
The Union asserts that the Arbitrator did not address its argument that the grievant is owed liquidated damages, in addition to interest, on the Agency's delinquent overtime payments. The Union further contends that the Arbitrator incorrectly determined that the grievant had been overpaid, and did not adequately address the Union's argument that overtime hours worked by the grievant prior to the years covered by the settlement agreement "should more than offset any alleged overpayment." Exceptions at 2.
The Union argues that the Agency's collection of any overpayment would be "against equity and good conscience" and should be waived. Id. In this regard, the Union asserts that the grievant suffered a large financial tax loss because of the Agency's "repeated mistakes and misinformation" and "failure to respond to numerous inquiries when he was trying to make his 1998 tax decision." Id. Moreover, the Union contends that the grievant should not be required to both return the overpayment and pay taxes on it.
The Union asserts that the Arbitrator's award does not discuss the testimony of its chief witness or address its argument that the Agency's actions violated the grievant's right to due process. With regard to the alleged due process violations, the Union argues that the Agency removed funds from the grievant's bank account without his authorization, and failed to both respond to inquiries concerning his overpayment and promptly notify him of his appeal rights.
B. Agency's Opposition
The Agency argues that the Arbitrator determined the amount owed by the grievant, including interest, and that it is irrelevant whether the grievant's debt is labeled interest or liquidated damages. The Agency further contends that the Arbitrator properly rejected the Union's assertion that the grievant was not overpaid because he was owed an additional amount for overtime work performed prior to the period covered by the settlement agreement. In addition, the Agency contends that the Memorandum establishes, and the Arbitrator's award states, that the Authority may not review the Arbitrator's recommended decision concerning waiver requests. In this regard, the Agency argues that it retains final authority to review all such requests.
The Agency argues that the Arbitrator has discretion to determine the credibility and weight to give witness testimony. With regard to the Union's allegation of [ v57 p21 ] due process violations, the Agency contends that it followed the parties' negotiated debt collection procedure and that the Union did not provide any evidence before the Arbitrator in support of its assertions.
IV. Preliminary Issue
The Agency argues that "the applicable bargaining agreement supports" that the Union may not file exceptions regarding employee waiver requests. Opposition at 1, 4. However, a waiver of the right to file exceptions to an arbitrator's award under § 7122(a) of the Statute must be clear and unmistakable. United States Dep't of the Navy, Naval Surface Warfare Ctr., Indian Head Div., Indian Head, Md., 56 FLRA 848, 850 (2000) (citation omitted). The Agency does not provide the Memorandum, the parties' National Agreement or any documentation that the Union waived its right to file exceptions regarding waiver requests. Moreover, although the Agency contends that the Arbitrator stated that his award is not reviewable by the Authority, a review of the award indicates that the Arbitrator did not make such a statement. Thus, the Agency has not demonstrated that the Union waived its right to file exceptions regarding employee waiver requests.
V. Analysis and Conclusions
A. The Arbitrator Did Not Exceed His Authority
The Union contends that the Arbitrator did not address several issues raised in arbitration. We construe this as a contention that the Arbitrator exceeded his authority. An arbitrator exceeds his authority when, among other things, he fails to resolve an issue submitted to arbitration. United States Dep't of Def., Educ. Activity, Arlington, Va., 56 FLRA 887, 891 (2000) (citations omitted). When the parties fail to stipulate to the issue, the arbitrator may formulate it on the basis of the subject matter of the grievance. Id. (citations omitted). Such formulations are accorded substantial deference. Id. (citation omitted).
The parties did not stipulate to an issue. Without expressly defining any issues, the Arbitrator discussed: (1) whether the grievant received an overpayment and, if so, (2) whether any of the indebtedness should be waived. See Award at 7-10. The Union has not demonstrated that the Arbitrator exceeded his authority by failing to address additional issues. See, e.g., NTEU, Chapter 168, 55 FLRA 237, 240 (1999).
With regard to the issue of whether the Agency failed to respond to the grievant's inquiries, the Arbitrator found that the Agency had "largely ignored" the grievant's attempts to contact the Agency and he accordingly recommended that the Agency not assess a late payment penalty or administrative costs. Award at 9-10. Thus, the Arbitrator did address this issue and the Union's assertion does not demonstrate that the Arbitrator exceeded his authority.
B. The Arbitrator's Award is Not Based on a Nonfact
We construe the Union's contention that the grievant was not overpaid as an argument that the Arbitrator's award is 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. United States Dep't of Def., Educ. Activity, Arlington, Va., 56 FLRA 873, 879 (2000) (citations omitted). However, an award will not be found deficient based on an arbitrator's determination on any factual matters that the parties disputed before the arbitrator. United States Dep't of the Navy, Naval Explosive Ordinance Disposal, Tech. Div., Indian Head, Md., 56 FLRA 280, 286 (2000) (citation omitted).
The Union argues that the grievant was not overpaid because overtime allegedly worked by the grievant prior to the dates covered by the settlement agreement offset any amount overpaid. However, the parties disputed before the Arbitrator whether the grievant had received an overpayment, and the Union specifically contended that any amount owed to the grievant for overtime work performed prior to the dates covered by the settlement agreement should be considered in determining his debt. See Award at 2, 6, 9. Consequently, the Union's assertion provides no basis for finding that the award is deficient as based on a nonfact. [n1]
C. The Arbitrator's Award is Not Contrary to Law
The Authority reviews questions of law raised by an arbitrator's award and exceptions to it de novo. NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citation omitted). In applying a 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 Air Force, Warner Robins Air Force Base, Ga., 56 FLRA 541, 543 (2000) (citation omitted). In [ v57 p22 ] making such a determination, the Authority defers to the arbitrator's underlying factual findings. Id.
The federal government may waive monetary claims against its employees when collection would be "against equity and good conscience and not in the best interests of the United States." 5 U.S.C. § 5584(a). "Generally, these criteria will be met by a finding that the erroneous payment occurred through administrative error and that there is no indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee." 4 C.F.R. § 91.5(b). However, whether waiver is granted "must necessarily depend upon the facts existing in the particular case." Id.
The Union argues that the overpayment should be waived because the grievant paid taxes on it at "a large financial . . . loss" as a result of the Agency's mistakes, misinformation, and failure to respond to his inquiries. Exceptions at 2. We reject this argument because the grievant could have returned the overpayment, thus avoiding paying taxes on it, without forfeiting his right to seek waiver. See 4 C.F.R. § 92.6. See also United States Pub. Works Ctr., 27 FLRA 156, 157-58 (1987). Moreover, the Agency promptly notified the grievant that he had been overpaid, and informed him that he would be liable for taxes on the overpayment if he failed to return it. The Union does not argue, and the record does not suggest, that the grievant paid taxes on or made other use of th