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59 FLRA No. 41
DEFENSE SECURITY ASSISTANCE
OF GOVERNMENT EMPLOYEES,
September 30, 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 exceptions to an award of Arbitrator J. Joseph Loewenberg 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 sustained the grievances of three employees and ordered them retroactively promoted with backpay. We find that the remedy is deficient, and we strike it. We remand to the parties for further proceedings.
II. Background and Arbitrator's Award
The Agency was established in 1997 as the result of a merger of separate programs of the Army, Navy, and Air Force. The Union filed a grievance, which claimed that the Agency had acted improperly by not promoting employees after their transfer to the Agency. The matter was submitted to arbitration where the Arbitrator framed the issue as whether the Agency had violated law or the parties' collective bargaining agreement when it did not select five specified employees for promotion.
The Arbitrator denied the grievance as it pertained to two of the employees. As to the other three employees, he sustained the grievance. He ruled that as to these employees, the Agency had violated 5 U.S.C. §§ 2301-2302 and the parties' collective bargaining agreement. As a remedy, he ordered the Agency to retroactively promote these employees with backpay to the date of the grievance.
In explaining the remedial order, the Arbitrator stated the following:
Would any of the three grievants have received promotions in 1998 if management had not engaged in improper actions? It is not possible to know the answer. The theoretical ideal might be to roll back the clock, make management correct its improper actions, and let the promotion process proceed. Given the length of time since the improper actions and intervening events, such a course is unrealistic. The only appropriate remedy, both to correct the violations and to put management on notice of the seriousness of prohibited actions, is to award the three named grievants promotions and back pay retroactive to the date of the grievance.
Award at 23.
III. Positions of the Parties
A. The Agency
The Agency contends that the remedy of retroactive promotions with backpay is deficient as contrary to the Back Pay Act, 5 U.S.C. § 5596, and § 7106(a)(2)(C) of the Statute because the Arbitrator did not determine that there was a causal connection between an improper action by the Agency and the failure of the named grievants to be promoted.
B. The Union
The Union contends that the remedy is not deficient. The Union argues that the remedy is not contrary to § 7106(a)(2)(C) because "there is absolutely no basis for the Agency to claim that the arbitrator's decision to promote the grievants was not a reconstruction of what the Agency would have done had it not violated the law . . . ." Opposition at 14. The Union argues that the remedy is not contrary to the Back Pay Act because "all three grievants were not promoted as a direct result of the unwarranted personnel actions. This establishes a sufficient causal connection to support an award of back pay under the Back Pay Act." Id. at 15. [ v59 p271 ]
IV. Analysis and Conclusions
The Agency's exceptions dispute the award's consistency with law. Accordingly, the Authority reviews the questions of law raised by the award and the exceptions de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995).
An award of a retroactive promotion with backpay is authorized under the Back Pay Act only when: (1) the aggrieved employees were affected by an unjustified and unwarranted personnel action; and (2) the personnel action resulted in a loss of pay by the employees because of a failure to be promoted. See, e.g., Soc. Sec. Admin., Office of Hearings and Appeals, Paducah, Ky., 58 FLRA 124, 125 (2002) (Office of Hearings and Appeals). In determining whether an award of a retroactive promotion with backpay is deficient, the Authority examines whether there is a causal connection between the unwarranted personnel action and the failure to promote. See id. With respect to the requirement of a causal connection, the Authority examines whether the arbitrator has found that but for the unwarranted action, the loss of pay, allowances, or differentials would not have occurred. See United States Dep't of Health and Human Services, 54 FLRA 1210, 1218-19 (1998) (an examination of whether a pay loss would have occurred but for the unwarranted action "amplifies" the causal connection requirement of the Act).
We conclude that the remedy of a retroactive promotion with backpay is deficient because it is contrary to the Back Pay Act. The Arbitrator did not find and the record does not establish that the three grievants would have been promoted if the Agency had not violated law or the collective bargaining agreement. Rather, the Arbitrator specifically found that it was not possible for him to determine whether any of the three grievants would have been promoted if management had not acted improperly. Consequently, the remedy of a retroactive promotion with backpay is deficient as contrary to the Back Pay Act and must be set aside. [n2] See Office of Hearings and Appeals, 58 FLRA at 126 (nothing in the arbitrator's findings or the record supported a causal connection between the agency's violation of the agreement and the grievant's failure to be promoted). However, as only the remedy is set aside, the Arbitrator's finding that the Agency violated law and the agreement remains unaffected. Accordingly, we will remand the issue of an appropriate remedy to the parties for resubmission to the Arbitrator, absent settlement. See, e.g., United States Dep't of the Army, Army Missile Command, Multiple Launch Rocket Sys. Project Office, Redstone, Ala., 56 FLRA 388, 391 (2000). [n3]
The award is modified by striking the remedy of retroactive promotions with backpay. The case is remanded to the parties for further proceedings consistent with this decision.
Concurring opinion of Chairman Cabaniss:
I write separately to note that I resolve on a case-by-case basis the issue of whether to remand back to the parties an arbitration award that has been set aside in whole or in part. In the present instance, I would find that the illegality of the initial remedy awarded does not mitigate against a remand in order to permit the parties (or, absent settlement, an arbitrator) to fashion an appropriate remedy for those grievants who were adversely affected by the Agency's improper handling of the personnel actions at issue.
Additionally, I write separately to address an issue that, while not raised by the parties, is of sufficient note that I believe it worthwhile to identify and discuss now so that it may be considered in future cases.
Our precedent reflects that the Authority has traditionally relied on violations of the Back Pay Act (5 U.S.C. § 5596) to set aside an arbitrator's award of not only backpay, but also (where applicable) an underlying award of a retroactive promotion, even where there remains a finding that the agency committed an unjustified or unwarranted personnel action (UUPA) that resulted in the improper denial of a promotion for the employee(s) in question. See, e.g., Soc. Sec. Admin., Office of Hearings and Appeals, Paducah, Ky., 58 FLRA 124, 125 (2002). This set aside of both the backpay remedy and the attendant retroactive promotion remedy has some sense of logic to it since the lack of a causal connection between the UUPA and the backpay would also seem to indicate the lack of a causal connection between the UUPA and the retroactive promotion.
However, there also is an obvious and, to me a more compelling logic for the conclusion that the set aside of arbitration award remedies for violating the [ v59 p272 ] Back Pay Act can result only in the set aside of just that part of the remedy provided by the Back Pay Act, i.e., the award of backpay. 5 U.S.C. § 5596(b)(1) speaks only to "the withdrawal of reduction of all or part of the pay, allowances, or differentials" of an employee, it does not speak to the granting of promotions or the setting aside of promotions. Thus, it would appear to me that an agency's challenge to an arbitration award providing both a retroactive promotion and backpay must rely on more than just an alleged violation of the Back Pay Act in order to challenge the underlying retroactive promotion and the UUPA upon which it is based.
For example, in the present case the Agency made a contrary to law exception based upon its right under 5 U.S.C. § 7106(a)(2)(C) to make selections for promotion. I also note that it would be possible to allege that the award of a retroactive promotion also fails to draw its essence from the parties' agreement, or that the retroactive promotion conflicts with some other law, rule, or regulation regarding the promotion action, such as an employee's compliance with time-in-grade requirements for promotion. To the extent these possible exceptions challenging the underlying retroactive promotion remedy are not successful, however, I would find no basis for setting aside the retroactive promotion and would permit employees to receive any benefit that would accrue from obtaining that higher grade and earlier promotion date, even though any award of backpay has been set aside by application of the Back Pay Act. Again, however, as the parties have not raised or addressed this issue its consideration will have to wait.
File 1: Authority's Decision in 59 FLRA No.
41 and Opinion of Chairman Cabaniss
File 2: 0pinion of Member Armendariz
Footnote # 1 for 59 FLRA No. 41 - Authority's Decision
Footnote # 2 for 59 FLRA No. 41 - Authority's Decision
Footnote # 3 for 59 FLRA No. 41 - Authority's Decision
Member Pope notes that this is consistent with precedent and the position set forth in her dissenting opinion in United States Dep't of Veterans Affairs, Cleveland Reg'l Office, Cleveland, Ohio, 59 FLRA No. 38 (Sept. 29, 2003) (Member Pope dissenting).