U.S. Federal Labor Relations Authority

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National Treasury Employees Union, Chapter 72 (Union) and United States, Department of the Treasury, Internal Revenue Service, Austin Service Center, Austin, Texas (Agency)

[ v58 p447 ]

58 FLRA No. 105







April 2, 2003


Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members [n1] 

I.     Statement of the Case

      This matter is before the Authority on an exception to an award of Arbitrator Don B. Hays 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 a response to the Union's exception.

      The Arbitrator sustained the grievance and awarded the grievant backpay. However, the Arbitrator limited interest on the backpay to the period from the time the grievance was filed until the date the arbitration hearing began. We find that the interest payment ordered by the Arbitrator is deficient, and we modify the award to comport with the Back Pay Act, 5 U.S.C. § 5596(b)(2)(B)(i), and implementing regulations, 5 C.F.R. § 550.806(a)(2).

II.     Background and Arbitrator's Award

      The parties submitted to arbitration the issue of whether the grievant had performed sufficient higher-graded duties to be entitled to a temporary promotion under the parties' collective bargaining agreement. The Arbitrator determined that she had and awarded her backpay "for the period from January 1, 1993, through September 30, 1998." Award at 23. With respect to interest on the awarded backpay, the Arbitrator ordered as follows: "However, the claim for interest on such amount shall be calculated only for the period from the time the grievance was filed until the original date arbitration began (June 21, 2000)." Id. at 24 (emphasis in original).

III.     Positions of the Parties

      The Union contends that the Arbitrator's interest award is contrary to the Back Pay Act. The Union argues that the award is inconsistent with § 5596(b)(2)(B)(i), which provides that interest "shall be computed for the period beginning on the effective date of the withdrawal or reduction involved and ending on a date not more than 30 days before the date on which payment is made[.]"

      The Agency states that it does not object to paying the grievant additional interest if the Authority determines that additional interest is contemplated by the Back Pay Act. The Agency also notes that under the Back Pay Act, the grievant is entitled to an award of backpay for the 6-year period preceding the date the grievance was filed; that is, beginning February 4, 1993, rather than January 1, 1993, as ordered by the Arbitrator. According to the Agency, it has implemented payment of backpay for this period with interest as limited by the Arbitrator's award.

IV.     Analysis and Conclusions

      The Union's exception challenges the award's consistency with law. Accordingly, we review the question of law raised by the exception and the award de novo. See, e.g., NTEU, Chapter 24, 50 FLRA 330, 332 (1995).

      We have expressly held that the Back Pay Act specifies the method for computing interest and that we are bound to apply the Act's method of computation. See United States Dep't of the Treasury, United States Customs Serv., El Paso, Tex., 57 FLRA 724, 728 (2002). Interest must be paid under the Act beginning on the date of the unjustified and unwarranted personnel action. See id. Consequently, the Arbitrator's computation of interest beginning on the date the grievance was filed is deficient. In addition, the payment of interest under the Act must continue until a date selected by the Agency, which date must not be more than 30 days before the date the Agency pays the grievant the required amount of interest. See id.; 5 C.F.R. § 550.806(a)(2). Consequently, the Arbitrator's computation of interest ending on the date of the arbitration [ v58 p448 ] hearing is also deficient. We will modify the interest award to comport with law and regulation.

V.     Decision

      The award is modified to provide for the payment of interest on the award of backpay consistent with § 5596(b)(2)(B)(i) and § 550.806(a)(2). [n2] 

Concurring Opinion of Chairman Cabaniss:

      I write separately to note that I would construe the Agency's response to the Union exception to raise a contrary to law claim by alleging that the award extended the period of backpay beyond the express limitation set out in the Back Pay Act. Even though this claim was not timely raised in accordance with our Regulations, I would find that this allegation raises a sovereign immunity issue, which is not waived by the failure to raise it in an otherwise timely fashion. See, e.g., Dep't of the Army v. FLRA, 56 F.3d 273, 275 (D.C. Cir. 1995). In accordance with that precedent, I would address on the merits the Agency's allegation that the award conflicts with the Back Pay Act.

Footnote # 1 for 58 FLRA No. 105 - Authority's Decision

   Chairman Cabaniss' concurring opinion is set forth at the end of this decision.

Footnote # 2 for 58 FLRA No. 105 - Authority's Decision

   We note the Agency's statement that it has already paid backpay to the grievant. Inasmuch as the Union's exception addresses only the issue of interest, and the Union did not seek leave to address the Agency's assertion that it has already paid backpay to the grievant, there does not appear to be any matter for us to resolve as to the appropriate period of backpay.