U.S. Federal Labor Relations Authority

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United States Department of Agriculture, Rural Development Centralized Servicing Center, St. Louis, Missouri (Agency) and American Federation of Government Employees, Local 3354 (Union)

[ v57 p166 ]

57 FLRA No. 41







May 21, 2001


Before the Authority: Dale Cabaniss, Chairman; Donald S. Wasserman and Carol Waller Pope, Members.

Decision by Member Wasserman for the Authority.

I.     Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Gerald Cohen filed by the Agency under § 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 determined that a grievance alleging discrimination by the Agency in its initial hiring, placing in grade, paying and promoting of bilingual loan processors was arbitrable. However, the Arbitrator denied the entire grievance on its merits. The Agency excepts solely to the arbitrability determination made by the Arbitrator and requests that the Authority set aside this portion of the award.

      For the reasons fully explained below, we find that the Arbitrator's award is deficient to the extent that the Arbitrator determined that claims involving initial appointments to federal service of some of the grievants were substantively arbitrable. Accordingly, we set aside that portion of the award. We deny the Agency's claims regarding the arbitrability of the remainder of the grievance.

II.     Background and Arbitrator's Award

      The Centralized Servicing Center (Agency), which provides mortgage loan services to poor rural communities, commenced operations in St. Louis, Missouri on October 1, 1997. [n1]  The Union was certified as the exclusive representative on September 22, 1997 and the negotiated grievance procedure became effective on December 8, 1997. See Award at 1. With the establishment of centralized loan servicing operations in St. Louis, the Agency determined that it was necessary to recruit, hire and train approximately 400 loan processors, including bilingual processors fluent in Spanish to communicate with its customers in Puerto Rico, the Virgin Islands, Florida and some southwestern states. See id. at 2. To this end, the majority of new employees were hired based on competitive examinations administered by the Office of Personnel Management (OPM) although some of these new positions were filled by employees who transferred from FHA, or were otherwise reassigned, reinstated or promoted.

      The Union filed a grievance on behalf of 29 bilingual loan processors who were hired to handle mortgage loan servicing operations for the Agency. When the grievance was not resolved, it was submitted to arbitration. The Arbitrator set forth the following issues: (1) whether the grievance was arbitrable? and (2) if so, did the Employer violate the collective bargaining agreement between the parties in the manner in which it hired, placed in grade, paid, or promoted bilingual members of the bargaining unit? Id. at 1.

      The Arbitrator determined that the grievance was arbitrable. In so doing, the Arbitrator rejected the Agency's claim that § 7121(c)(4) barred the arbitration of the grievance since it challenged the initial examination, certification or appointment of employees. [n2]  Rather, the Arbitrator agreed with the Union's argument that since the grievance involves a claim of discrimination under § 7121(d), the grievance procedure was an appropriate vehicle for disputing the matter.

      In addition, the Arbitrator rejected the Agency's claim that the grievance was not arbitrable because [ v57 p167 ] some of the grievants were hired prior to the existence of the parties' agreement and the establishment of the negotiated grievance procedure. In this regard, the Arbitrator concluded that the alleged violations at issue would "continue every day that the [g]rievants were paid at a pay rate that the Union contends is improper[,]" and that the grievance is "in effect, a continuing complaint." Id. at 18. Further, the Arbitrator noted that the grievance is "not a one-shot complaint, as would be the case, for instance, for the protest of a discharge[,] . . . [since] a discharge, if it had occurred prior to the contract, is not a continuing matter but one that occurred at one point in time." Id. In the Arbitrator's view, the grievance constitutes "a continuing one, permitting the employees to protest at any point while they are employed." Id.

      In resolving the merits of the grievance, the Arbitrator reviewed statistics on the Agency's hiring, placing in grades and promotion of Hispanic and non-Hispanic employees within the context of a number of factors, including the percentage of Hispanics in the St. Louis work force, the fact that most grievants were hired based on competitive examinations overseen by OPM, and the high percentage of Hispanic employees who received awards. See id. at 20-23. Based on this review, the Arbitrator concluded that the "statistics of employment do not show a disparate . . . or a discriminatory impact on the [g]rievants[,]" and denied the grievance in its entirety. Id. at 24.

III.     Positions of the Parties

A.     Agency's Exceptions

      The Agency contends that the Arbitrator erred in finding that the grievance was arbitrable on two grounds.

      First, the Agency argues that "[t]he Arbitrator improperly applied [the] negotiated grievance procedure" since "[it] does not allow for the filing of grievances over matters which arose before the existence of the procedure and before the recognition of [the Union] as the exclusive representative of bargaining unit employees[,]" as was the case for twenty of the grievants. [n3]  Exceptions at 8, 9. The Agency maintains that its position is consistent with the Authority's finding in United States Army Missile Command, Redstone Arsenal, Ala., 18 FLRA 374 (1985) (USAMC), on the erroneous applicability of an agreement that was not in effect at the time of the selection action." Exceptions at 10. Moreover, the Agency argues that even those grievants who were hired after the Union's certification as exclusive representative are grieving matters that arose when they were applicants, and therefore they do not have "the retroactive right to file a grievance concerning events which occurred before they occupied positions [as unit employees] covered under a bargaining agreement." Id. In this connection, the Agency maintains that the award is contrary to Hess v. IRS, 892 F.2d 1019 (Fed. Cir. 1989) (Hess).

      Second, the Agency argues that the disputed issues at arbitration are directly related to the examination, certification and initial appointment matters that are excluded from the grievance procedure by § 7121(c)(4). Exceptions at 14. In this regard, the Agency notes that twenty-two of the grievants were hired by the Agency from certificates of eligible candidates prepared by OPM. Also, the Agency maintains that of the remaining seven grievants, three were given initial appointments in the excepted service and three were already federal employees who transferred to the Agency prior to the existence of the negotiated grievance procedure.

B.     Union's Opposition

      The Union maintains that the Agency's exceptions should be denied. The Union contends that the Agency's claims --that the grievance falls outside the scope of the negotiated grievance procedure because the grievance procedure was not in effect at the time that most of the grievants were hired --challenge the Arbitrator's finding of procedural arbitrability and thereby provide no basis for finding the award deficient. Opposition at 9. Moreover, contrary to the Agency's claims, the Union contends that the Arbitrator's determination "precisely follows the holding of Hess," which focuses on the status of the employee at the time of the adverse action. Id. at 10. The Union also argues that USAMC is distinguishable from the instant case and therefore provides no basis for finding that the Arbitrator's award is contrary to law, rule or regulation. In addition, the Union argues that the Agency's claims that the grievance is not arbitrable are not applicable to nine grievants who were hired after the Union was certified as the exclusive representative and after the agreement was signed by the parties.

      Lastly, the Union maintains that the "Arbitrator did not err in finding that the thrust of the grievance is a [ v57 p168 ] discrimination allegation" that is arbitrable pursuant to § 7121(d) and the parties' agreement, which specifically does not exclude EEO cases from the grievance procedure. Id. at 15.

IV.     Analysis and Conclusions

      An arbitrator's determination of the procedural arbitrability of a grievance is subject to challenge only on grounds other than those that directly challenge the procedural arbitrability determination. AFGE, Local 2921, 50 FLRA 184, 185-86 (1995). In this case, the Agency disputes the arbitrability determination in relation to all of the grievants on grounds of timeliness under the parties' negotiated grievance procedure. As such, the Agency is directly challenging a procedural arbitrability determination, and thus provides no basis for overturning the award. See NFFE, Local 2030, 56 FLRA 667, 671-72 (2000). Accordingly, we deny the Agency's exception in this regard. [n4] 

      The Agency also claims that the arbitrability determination is inconsistent with § 7121(c)(4) since the hiring practices at issue concern initial appointments into federal service for a number of the grievants. As previously noted, § 7121(c)(4) expressly excludes from the scope of negotiated grievance procedures "any grievance concerning . . . any examination, certification, or appointment." The Authority has long-held that the terms "examination," "certification," and "appointment," as used in § 7121(c)(4), apply to an individual's initial entry into federal service. See NFFE, Local 1636, 48 FLRA 511, 513-14 (1993), citing Nat'l Council of Field Labor Locals of the AFGE, AFL-CIO, 4 FLRA 376 (1980). Here, the Union does not dispute that, as to at least 20 of the grievants, the hiring practices at issue in the grievance involve initial appointments, as defined under § 7121(c)(4). See Opposition at 20-21. However, the Union maintains that the claims regarding the initial appointments of these grievants are not barred by § 7121(c)(4) because these claims involve discrimination and, as such, are arbitrable under § 7121(d). [n5] 

      Resolving the parties' competing claims depends on an examination of the interplay between § 7121(c)(4) and § 7121(d) of the Statute.

      In interpreting statutory language,

the task of resolving a dispute over the meaning of a statutory provision "begins where all such inquiries must begin: with the language of the statute itself." If the statute's language is plain, that is, if Congress' intent is apparent from the language, "it is also where the inquiry should end, for where . . . the statute's language is plain, the `sole function of the courts is to enforce it according to its terms.'"

United States Gov't Printing Office, Washington, D.C., 51 FLRA 1088, 1092 (1996) (citations omitted).

      Nothing in the plain wording of § 7121(d) supports the Union's contention that despite the exclusion of grievances of initial appointments to federal service under § 7121(c)(4), discrimination claims regarding such appointment matters may be grieved under § 7121(d).

      Under § 7121(d), an aggrieved employee affected by a prohibited personnel practice under 5 U.S.C. § 2302(b)(1), which also falls within the coverage of a negotiated grievance procedure, has the option of raising the matter under the statutory procedure or the negotiated procedure. It is undisputed that "appointment" is one of the enumerated personnel actions covered by § 2302(b)(1). [n6]  However, the matters that may be raised under a statutory procedure or a negotiated procedure -- and, thus, an employee's ability to exercise this option -- may be limited by the terms of the Statute or a negotiated procedure. For example, parties may bargain to exclude prohibited personnel practices from the scope of their negotiated grievance procedures. If that is the [ v57 p169 ] case, an aggrieved employee may utilize the statutory appeal procedure to seek redress.

      In addition, and as relevant here, § 7121(d) itself limits the availability of a filing option by permitting it to be exercised only where the matters falling within § 2302(b)(1) "also fall[] under the coverage of the negotiated grievance procedure." (Emphasis added). Since appointments are specifically excluded from the scope of negotiated grievance procedures under § 7121(c)(4), an employee may not elect to file a grievance alleging the commission of a prohibited personnel practice involving initial appointment under the terms of a negotiated grievance procedure. As is the case with a negotiated exclusion, the statutory appeal is available for an aggrieved employee.

      Consequently, we find that § 7121(d) does not encompass matters that are otherwise excluded from the coverage of the negotiated grievance procedure under § 7121(c), including appointments under § 7121(c)(4).

      In this case, the grievance concerns whether the Agency discriminated against the grievants in violation of Title VII of the Civil Rights Act based on the manner in which the grievants were initially hired, subsequently promoted and selected for awards. Consistent with our interpretation of § 7121(d) above, to the extent that the grievance involves discrimination claims pertaining to initial appointments to federal service, such claims are excluded from the parties' negotiated grievance procedure by § 7121(c)(4). Therefore, the Arbitrator's determination that the grievance as it pertained to initial appointments for some of the grievants was substantively arbitrable is inconsistent with § 7121(c)(4) and, in that respect is deficient. We will set aside that portion of the award.

      However, § 7121(c)(4) does not affect the arbitrability of claims regarding the hiring of grievants who were already federal employees when they applied to the Agency. Also, § 7121(c)(4) does not render inarbitrable the Union's claims alleging disparate treatment in promotions and awards after the grievants' initial appointment into federal service and/or transfer from other federal positions. Consequently, we reject the Agency's exception that these portions of the award are deficient.

V.     Order

      The Arbitrator's award finding that the discrimination claims pertaining to initial appointments to federal service for some of the grievants were substantively arbitrable is deficient and is vacated. The Agency's exceptions regarding the arbitrability determination of the other claims presented in the grievance are denied.

Footnote # 1 for 57 FLRA No. 41

   Prior to 1996, the Farm and Home Administration (FHA) had offices scattered throughout the country which handled such services on a regional/local basis.

Footnote # 2 for 57 FLRA No. 41

   Section 7121(c)(4) provides that:

(c)     The preceding subsections of this section shall not apply with respect to any grievance concerning-
. . . .
(4)     any examination, certification, or appointment.

Footnote # 3 for 57 FLRA No. 41

   The Agency cites Article 2, Section 5 of the agreement, which provides that grievances must be presented within ten workdays of either the incident which gave rise to the grievance or when the grievant became aware of the incident. This section also provides that "[i]ssues of an ongoing nature may be grieved within ten (10) workdays of the latest instance." Id. at 9. The failure to abide by these filing deadlines or to seek a filing extension would disqualify the processing of a grievance under the terms of Section 5.

Footnote # 4 for 57 FLRA No. 41

   In addition, we reject the Agency's claim that the Arbitrator's determination is inconsistent with the holdings of Hess and USAMC. In Hess, the court determined that arbitrability was based on the grievant's status as a unit employee when the adverse action (dismissal) occurred, as opposed to the grievant's prior status as a supervisor when the underlying conduct that precipitated the dismissal occurred. In USAMC, the Authority found that the award was deficient on nonfact grounds based on the arbitrator's erroneous finding that the parties' agreement was retroactively applicable to a selection action predating its existence. Assuming without finding that these decisions apply here, they do not establish a rule of law that is applicable to all grievances filed under negotiated grievance procedures. In any event, given the ongoing nature of the alleged wrongdoing, the grievants were entitled to invoke the protections of the negotiated grievance procedure when they became unit employees.

Footnote # 5 for 57 FLRA No. 41

   Section 7121(d), provides in pertinent part that;

An aggrieved employee affected by a prohibited personnel practice under section 2302(b)(1) of this title which also falls under the coverage of the negotiated grievance procedure may raise the matter under a statutory procedure or the negotiated procedure, but not both. . . . Selection of the negotiated procedure in no manner prejudices the right of an aggrieved employee . . . to request the Equal Employment Opportunity Commission to review a final decision in any other matter involving a complaint of discrimination of the type prohibited by any law administered by the Equal Employment Opportunity Commission.

Footnote # 6 for 57 FLRA No. 41

   5 U.S.C. § 2302, entitled "Prohibited personnel practices" provides in pertinent part:

(a)(1) For the purpose of this title, "prohibited personnel practice" means any action described in subsection (b).
(2) For the purpose of this section--
(A)     "personnel action" means--
     (i)     an appointment;
. . . .
(b) Any employee who has authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority--
     (1)     discriminate for or against any employee or applicant for employment-
          (A)     on the basis of race, color, religion, sex, or national origin, as prohibited under section 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16).