United States, Department of Defense Education Activity, Arlington, Virginia (Agency) and Federal Education Association (Union)

[ v60 p24 ]

60 FLRA No. 8

UNITED STATES
DEPARTMENT OF DEFENSE
EDUCATION ACTIVITY
ARLINGTON, VIRGINIA
(Agency)

and

FEDERAL EDUCATION ASSOCIATION
(Union)

0-AR-3770

_____

DECISION

June 17, 2004

_____

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 Daniel F. Brent 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 Union filed a grievance alleging that the Agency failed to pay the grievants correctly and failed to provide documentation that correct payments had been made for back pay, interest on back pay, Thrift Savings Plan (TSP) matching funds, and lost earnings. The Arbitrator sustained the grievance and ordered a remedy with respect to the named grievants and the entire bargaining unit.

      The Agency excepts only to the remedy concerning the unit and does not except to any findings of violations. For the reasons discussed below, we deny the Agency's exceptions.

II.     Arbitrator's Award

      As relevant here, the Arbitrator found that the Agency violated the collective bargaining agreement, applicable Federal law, and related arbitration decisions by failing to pay employees correctly and by failing to provide documentation that correct payments had been made for back pay, interest on back pay, TSP matching funds, and lost earnings. Interim Award at 2. As a remedy, the Arbitrator directed the Agency, the Defense [ v60 p25 ] Finance and Accounting Service (DFAS), or such other constituent agency of the Department of Defense (DOD) to perform full audits regarding the eight named grievants. In addition, as relevant here, the Arbitrator ordered that

DODDS or DFAS or some other entity of the Department of Defense shall create or modify its computer programs or other procedures by which bargaining unit employees are paid so that all bargaining unit employees receive with every payment a clear, fully understandable explanation of what is included. For example, the nature of the payment, the period represented by the payment, the date of the document submitted for payment, the actual exchange rate of foreign currency upon which the payment was predicated, and the number of units (for example, days or hours) times the applicable rate, whether interest is included, the period covered by the interest, the rate of interest, and the arithmetic computing the interest must be shown for each item. Regardless of the mode of compliance selected by DODDS, such compliance shall be achieved and documented for all bargaining unit employees Agency-wide within a reasonable interval.

Id. at 5-6. See also Arbitrator's Award at 41.

      In this regard, the Arbitrator found that the underlying calculations for payments to employees may be communicated to employees by e-mail, "stub or statement accompanying each check or by a separate communication referencing the check number and the amount accompanying every paycheck or electronic direct pay deposit." Id. at 41-42. Lastly, the Arbitrator stated that the Agency's failure to comply with this remedy within 90 days of the award "may result in the imposition of substantial liquidated" damages. Interim Award at 6.

III.     Positions of the Parties

A.     Agency's Exceptions

      The Agency requests that the Authority set aside the portion of the Arbitrator's remedy that requires the Agency to "`create or modify its computer programs or other procedures by which bargaining unit employees are paid so that all bargaining unit employees receive with every payment a clear, fully understandable explanation of what is included'" on the grounds that the Arbitrator exceeded his authority and that this portion of the award is contrary to law. Exceptions at 3 (quoting Award at 5).

      The Agency maintains that the Arbitrator exceeded his authority in ordering it to modify its computer system to provide this sort of explanation to all unit employees since "it lacks authority under a government[-]wide regulation to take [such] action[.]" Id. at 4. In this respect, the Agency cites DOD Directive 1400.13, section 4.3.4.1, regarding "Salary Computation" that states "[c]ompensation of educators shall be in accordance with the payroll and leave accounting procedures of the servicing Military Department, and such policies and instructions as may be prescribed by the Assistant Secretary of Defense (Comptroller)." Id., Attachment 8 at 6. In further support of this claim, the Agency relies on portions of the DoD-wide Financial Management Regulation 7000.14R that is used by all DOD Components for accounting, budgeting, finance, and financial management. [n1] 

      Based on this regulation, the Agency maintains that the Chief Financial Officer of DOD has the sole authority to make the changes in order to provide a clear explanation of earnings and benefits to all unit employees required by the award. The Agency claims that its authority to comply with the award in this regard is limited to making a request to the Chief Financial Officer that DOD modify its program to provide a clear explanation of earnings and benefits to all unit employees consistent with the award.

      In addition, the Agency maintains that the remedy violates management's right to assign work under § 7106(a)(2)(B) of the Statute by directing the agency to [ v60 p26 ] modify its computer program by which employees are paid. Also, the Agency maintains that this remedy affects management's right to determine the technology, methods, and means of performing work under § 7106(b)(1) since it "deprives the [A]gency of its discretion to determine the technology, method[s] and means of providing pay information to its employees." Exceptions at 8. As such, the Agency maintains that the award fails to satisfy prong 2 under the framework in United States Dep't of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 53 FLRA 146 (1997) (BEP), since this aspect of the remedy fails to reconstruct what it would have done in the absence of the violation, namely, "paid the named employees in a timely and accurate manner." Exceptions at 8.

B.     Union's Opposition

      The Union claims that the Arbitrator did not exceed his authority in ordering systemic relief to all unit employees since one of the issues that was resolved in this case involved the "Agency's overall failure to `demonstrate' payment of correct pay for [the eight named grievants as well as] `similarly situated'" unit employees. Opposition at 5 (quoting grievance at 1). The Union maintains that the DOD-wide regulation upon which the Agency relies does not exempt the Agency from its "inherent authority and responsibility to ensure [that] its employees are paid correctly." Id. at 5-6. In this respect, the Union notes that the DOD Manual 1342.6-M clearly provides that "it is the responsibility of [the Agency] to fund the complete operation of DOD Dependents Schools[,]" and to enter into agreements with other government entities in order to accomplish this objective. Id. at 6. In this respect, the Union contends that although the Agency has an agreement with DFAS as its pay agent, the Agency is "ultimately responsible for paying its employees correctly." Id.

      With respect to the Agency's claims that the remedy affects its right to assign work and to determine the technology, methods and means of providing pay information to employees, the Union maintains that the Agency has offered no evidence or argument regarding any "technological or other impediment" that would excuse the Agency from providing such explanatory statements to unit employees. Id. at 7. The Union contends that the award does not affect its discretion to determine the technology, methods and means of providing pay information to employees since under the award, the Agency "still has discretion to modify the program in any way they deem fit -- as long as the [Agency] provides[s] a `clear, fully understandable explanation of what is included in each check.'" Id. at 8 (quoting Award at 41).

IV.     Analysis and Conclusions

      The Authority's role in reviewing arbitration awards depends on the nature of the exceptions raised by the appealing party. See United States Customs Serv. V. FLRA, 43 F.3d 682, 686 (D.C. Cir. 1994). In NTEU, Chapter 24, 50 FLRA 330, 332 (1995), the Authority stated that if the arbitrator's decision is challenged, as it is here, on the ground that it is contrary to any law, rule, or regulation, the Authority will review the legal question de novo. In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See NTEU, Chapter 50, 54 FLRA 250, 253 (1998).

      We construe the Agency's exceeded authority claim as a contention that the award is contrary to DOD Directive 1400.13 and the DOD Financial Management Regulation 7000.14-R. The Agency relies on these provisions in support of its argument that it lacks the authority to comply with the remedy to "create or modify its computer programs or other procedures by which bargaining unit employees are paid so that all bargaining unit employees receive with every payment a clear, fully understandable explanation of what is included." Interim Award at 5.

      The Agency has not demonstrated that the award is inconsistent with either DOD Directive 1400.13 or DOD Financial Management Regulation 7000.14-R. Specifically, the Agency has not established that it is precluded from providing a clear explanatory statement to all unit employees for the payments/earnings that they receive under this directive and regulation.

      As relevant here, DOD Directive 1400.13, section 4.3.4.1 requires that compensation of unit employees be consistent with prescribed payroll and leave accounting procedures established by the DOD Comptroller. Similarly, DOD Instruction 7000.14, regarding "DoD Financial Management Policy and Procedures," requires all DOD components, including the Agency, to comply with a DOD-wide regulation concerning financial matters. In addition, the DOD Financial Management Regulation provides that the "CFO, DoD has authority: [t]o manage directly, and/or monitor, evaluate and approve, the design, budget, development, implementation, operation [ v60 p27 ] and enhancement of DoD-wide accounting, financial and asset management systems."

      The Agency has failed to demonstrate that complying with the Arbitrator's award in providing a clear statement of earnings and benefits would conflict with any of the regulations mentioned above regarding the DOD pay system. Under the award, the Agency has discretion in deciding what actions must be taken in order to provide unit employees with this explanatory statement of payments. The Agency's discretion in this regard is evidenced by the language of the award which requires the Agency to select its "mode of compliance" in order to "create or modify its computer programs or other procedures." Interim Award at 5-6 (emphasis added). The award does not mandate the specific format for how the information must be provided to employees; it simply provides examples of possible formats that would be consistent with the award. Accordingly, we find that the award is not contrary to law or regulation. See, e.g., AFGE, Local 201, 57 FLRA 874, 877 (2002) (Authority found award not contrary to law as union had not established that award was inconsistent with regulation).

      Furthermore, we reject the Agency's claims that the award affects its rights to assign work and to determine its technology, methods and means of providing pay information to unit employees. We find that in making this claim, the Agency misapprehends what the award requires. Specifically, the award requires the Agency to provide a clear explanatory statement of the payments made to all unit employees. In this regard, as already noted above, the award does not require the Agency to modify its computer system. Rather, the Agency has discretion in deciding what actions must be taken in order to provide unit employees with a clear explanatory statement of payments. As such, we find that the award does not affect management's rights. [n2] 

      Based on the foregoing, we deny the Agency's exceptions. [n3] 

V.     Decision

      The Agency's exceptions are denied.



Footnote # 1 for 60 FLRA No. 8 - Authority's Decision

   Specifically, the Agency references the following portions of the DOD Financial Management Regulation, Vol. 1, Chpt. 1:

0101 General.
The Chief Financial Officer of the Department of Defense (CFO, DoD) is the chief financial management policy officer of