American Federation of Government Employees, Local 2703 (Union) and United States, Department of Transportation, Federal Aviation Administration, Silver Spring, Maryland (Agency)

[ v59 p81 ]

59 FLRA No. 14

LOCAL 2703






August 29, 2003


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

I.      Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Ben Falcigno 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 did not file an opposition to the Union's exceptions.

      The Arbitrator denied a grievance alleging that the parties' collective bargaining agreement (CBA) required the Agency to extend an Office of Personnel Management (OPM) pay adjustment for certain computer specialists to bargaining unit employees in similar positions employed at the Agency.

      For the reasons that follow, we deny the Union's exceptions.

II.     Background and Arbitrator's Award

      49 U.S.C. § 106(l) authorizes the Agency to establish the compensation levels of its employees. [n1]  In setting these compensation levels, the Agency may negotiate with the exclusive representatives of its employees only as provided for in 49 U.S.C. § 40122(a) and (g). Furthermore, under 49 U.S.C. § 40122(g)(1), the Agency, in consultation with its employees, must develop a personnel management system (PMS) for Agency employees. Some, but not all, of the provisions of title 5 apply to that new PMS. 49 U.S.C. § 40122(g)(2). The Statute continues to apply to the Agency's employees. 49 U.S.C. § 40122(g)(2)(C).

      Pursuant to these provisions, the Agency issued the Federal Aviation Administration PMS. To implement the PMS, the Agency issued a series of Personnel Reform Implementation Bulletins (PRIBs). PRIB 001, which the Agency issued on April 1, 1996, states: "All current systems and procedures remain in effect until superseded by a PRIB." 49 U.S.C. § 40122(a)(1), which was enacted following the issuance of the PMS and PRIB 001, requires the Agency to negotiate with the exclusive representatives of its employees in making changes to the PMS. The Agency has not subsequently issued any additional PRIBs concerning basic rates of pay.

      The Arbitrator found that in May 1996, when the current CBA became effective PRIB 001 and the PMS already existed and, therefore, when the parties agreed in October 2000 to continue the CBA, "they incorporated those existing regulations[.]" Id. at 5. The Arbitrator further stated that the "FAA PMS was part of what was adopted in Article 1 of the current [m]emorandum. Therefore, its provisions are part of the CBA." Award at 6.

      In a November 2000 memorandum, OPM announced the establishment of a government-wide special salary rate for computer specialists, effective January 1, 2001. The Union subsequently informed the Agency that it believed that bargaining unit employees employed in the 334 pay series were entitled to the special rate. The Agency, however, determined that it was not required to implement such rate, arguing that it was not subject to OPM's rules.

      The Union subsequently filed a grievance over the Agency's refusal to grant the special rate. After the parties could not resolve the matter, it was submitted to arbitration on the following stipulated issue:

Was the [Agency] required to automatically grant all . . . unit employees in the 334 series, not covered by a negotiated pay system, the higher rates of basic pay granted government-wide to General Schedule employees . . . in accordance with [OPM]'s November 2000 directive? If so, what is the appropriate remedy?

Id. at 2. [ v59 p82 ]

      The Union argued that by establishing PRIB 001 in 1996, the Agency adopted all future OPM adjustments to GS rates of basic pay for as long as the interim GS pay system exists. And, as special salary rates were an integral part of the GS system, any additional changes in special salary rates were encompassed in the "all current systems and procedures" language in that document. Id. at 6 (emphasis omitted). The Agency disagreed with the Union's arguments, asserting that special GS adjustments were not adopted in the PMS. The Agency asserted that it elected to continue the then-existing system and Title 5 provisions applicable to compensation and pay until September 30, 1997.

      Examining Section II, of the PMS, the Arbitrator found that "FAA never intended to, nor did it incorporate all aspects and provisions of Title 5, in particular subsection 530 Pay Rates and Systems." Id. at 5. Also, according to the Arbitrator, Chapter II Compensation, "Section 1 . . . makes clear . . . that the prior method of determining base pay will be continued only until September 30, 1997." Id. The Arbitrator concluded that the "PMS does not subordinate FAA to the GS schedule after September of 1997. Nor did FAA adopt any automatic provision guaranteeing a lock-step with OPM special pay adjustments." Id. at 6.

      The Arbitrator thus rejected the Union's argument that PRIB 001 is the authority for the pay rates and concluded that the "`current systems and procedures' being continued by PRIB 001 [are] that which the FAA PMS included and excludes that which the FAA PMS excludes." Id. With respect to the disputed adjustment, the Arbitrator found that it was clear that the "PMS did not include it and deferred contemplation of it to the CRP [Compensation Revision Plan], from which no decision to adopt the change came forth." Id.

      The Arbitrator also found that Article 1 of the parties' CBA "incorporates the concept that if future laws . . . and regulations come along, the parties would be obliged to be governed by them insofar as they were required by law or by the regulations of appropriate higher outside authorities." Id. at 7. The Arbitrator found that the FAA Act, which, among other things, requires the Agency to negotiate changes with employees in bargaining units certified under the Statute, was "given superior status by the parties' CBA . . . over any conflicting issuances from the [Agency]." Id. The Arbitrator found that at the time PRIB was issued, the Agency had authority under the FAA Act to fashion a "PMS so long as it did not diminish (until July, 1999) compensation and benefits in effect at the time of the issuance. Any changes would have to be negotiated. Once the PMS was placed in effect, there could be no changes without negotiations." Id.

      As he had found that "unspecified future GS special adjustments were not part of the PMS after September of 1997," and noting the language of the FAA Act, the Arbitrator determined that any "special adjustments after that time must be negotiated." He therefore rejected the Union's contention that a new PRIB (which precluded the special pay rate at issue here) would be necessary for the Agency to have the authority to not automatically extend the special pay rate to its employees.

      The Arbitrator further considered two prior arbitration awards cited by the Union, but found that these awards were not controlling. The Arbitrator found the first award was not applicable based on the dates involved. As to the second award, of Arbitrator Suzanne R. Butler, issued in 2001, the Arbitrator found that although the award involved payment of the same special adjustment, the contractual language differed from that of the unit in dispute.

      Based on the above, the Arbitrator concluded that the Agency was not required to automatically grant all bargaining unit employees in the 334 series the higher rates of pay. Accordingly, he denied the grievance.                          

III.     Positions of the Parties

A.     Exceptions

      The Union asserts that the award is contrary to law, namely, the Agency's regulations and previous Authority decisions involving the Agency's policies that are in dispute here. According to the Union, in the prior decisions, the Authority "recognized that OPM directives are a part of the [Agency]'s personnel compensation system [PMS] until the Agency takes appropriate steps to amend the system. Exceptions at 7. In support, the Union cites United States Dep't of Transportation, FAA, 55 FLRA 797 (1999) (FAA I) and United States Dep't of Transportation, FAA, 56 FLRA 627 (2000) (FAA II).

      The Union next contends that the Arbitrator interpreted the FAA Act to require negotiations for changes to the PMS system. According to the Union, in FAA I, the Authority recognized that the Agency carried over previously existing pay processes developed pursuant to Title 5 of the United States Code. The Union asserts that by not applying the special rates, the Arbitrator ignored the requirements of the FAA Act for negotiations before changing the system. [ v59 p83 ]

      The Union asserts that the interpretation of the PMS and PRIB 001 reached by the Arbitrator in this case is at odds with the interpretation of the same regulations set forth in Arbitrator Suzanne R. Butler's award. [n2]  According to the Union, the Arbitrator provided a "terse explanation of distinguishing the cases[,]" and did not provide any analysis or reference to the contract language that he mentioned that would justify applying a pay rate different from that received by employees in the Butler award. Exceptions at 10.

B.     Opposition

      The Agency did not file an opposition.

IV.     Analysis and Conclusions

A.     The Award Draws its Essence from the Parties' CBA

      The Union asserts that the Arbitrator's interpretation of PRIB 001 and the PMS is contrary to prior Authority decisions. However, in this case the Arbitrator found that when the parties agreed to continue the CBA they incorporated existing regulations, and the "FAA PMS was part of what was adopted in Article 1 of the current [m]emorandum. Therefore, its provisions are part of the CBA." Award at 6.

      It is well-settled that when a collective bargaining agreement incorporates the regulations with which an award allegedly conflicts, the matter becomes one of contract interpretation because the agreement, not the regulation, governs the matter in dispute. See National Association of Government Employees, Local R4-6, 52 FLRA 1522, 1526 (1997) (NAGE Local R4-6). Here, as the Arbitrator found, the parties' CBA incorporates the Agency's regulations--FAA PMS and PRIB 001. Consequently, the issue before the Authority is whether the award is deficient as failing to draw its essence from the parties' CBA under § 7122(a)(2) of the Statute. Accordingly, we will analyze this exception as a claim that the award fails to draw its essence from the parties' CBA.

      In reviewing an arbitrator's interpretation of a collective bargaining agreement, the Authority applies the deferential standard of review that Federal courts use in reviewing arbitration awards in the private sector. See 5 U.S.C. § 7122(a)(2); AFGE, Council 220, 54 FLRA 156,

      159 (1998). In order for an award to be found deficient as failing to draw its essence from the collective bargaining agreement, it must be established that the award: (1) is so unfounded in reason and fact and so unconnected with the wording and purposes of the agreement as to manifest an infidelity to the obligation of the arbitrator; (2) does not represent a plausible interpretation of the agreement; (3) cannot in any rational way be derived from the agreement; or (4) evidences a manifest disregard of the agreement. See United States Dep't of Defense, Dependents Schools, 53 FLRA 196, 208 (1997) (citing United States Dep't of Labor (OSHA), 34 FLRA 573, 575-77 (1990)).

      We find that the Union's exception fails to meet any of the above stated criteria. The Arbitrator interpreted the terms of the FAA PMS and PRIB 001, as incorporated within the parties' CBA, and found that the "`current systems and procedures' being continued by PRIB 001 [are] that which the FAA PMS included and excludes that which the FAA PMS excludes." Award at 6. The Arbitrator further interpreted the FAA PMS to find that it did not include the disputed GS special pay adjustment for unit employees in the 334 series. The Union has not shown that the Arbitrator's interpretation of the FAA PMS and PRIB 001 is irrational, implausible, unfounded, or evidences a manifest disregard of the collective bargaining agreement. Therefore, this exception does not provide a basis for finding the award deficient. Accordingly,