U.S. Federal Labor Relations Authority

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United States, Department of Defense, Defense Contract Audit Agency, Central Region, Irving, Texas (Agency) and American Federation of Government Employees, Local 3529 (Union)

[ v60 p28 ]

60 FLRA No. 9



LOCAL 3529




June 18, 2004


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 Charles B. Overstreet 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.

      For the reasons that follow, we deny the Agency's contrary to law exception. Further, we remand this matter to the parties for resubmission to the Arbitrator, absent settlement, to clarify his award consistent with our decision.

II.     Background and Arbitrator's Award

      This case involves a prior Authority decision, AFGE, Local 3529, 57 FLRA 633 (2001) (Local 3529). Specifically, in Local 3529 the Authority denied review of a Regional Director's decision, which found that five positions should be included in the Union's bargaining unit. As those positions were added to the bargaining unit, the Union argued, in the instant proceeding, that it could reopen the parties' agreement under Article 42, Section 42.03(A) (Article 42.03(A)). [n2]  A grievance was filed and when it was not resolved it was submitted to arbitration. At the hearing, the parties stipulated to the following issue:

Is the Employer obligated to bargain over five (5) positions of Customer Service Representative, Quality Assurance Auditor, Technical Program Specialist, Computer Systems Analyst/IT Specialist, and the SPO/Investigative Support Division under Article 42.03(A)?

Award at 2.

      In his award, the Arbitrator stated, "[W]hether or not 57 FLRA 122 [Local 3529] had any impact on the CBA was a matter for debate in negotiations - not because the Agency arbitrarily decided it had no impact." Id. at 12. In so doing, the Arbitrator rejected the Agency's assertions that it had no duty to bargain by stating:

[i]t is difficult for this Arbitrator to accept the notion that a group of employees in five classifications go to bed one night as non-represented employees and wake up the next morning under the umbrella of a 98 page CBA and unknown number of side agreements, and not be impacted in some manner.

Id. at 12.

Accordingly, the Arbitrator found for the Union and determined that the Agency must bargain over proposed changes to the parties' agreement that stem from "issues that resulted from" Local 3529. Id. at 13.

III.     Positions of the Parties

A.     Agency's Exceptions

      The Agency contends that the Arbitrator's award is contrary to § 7103(a)(9)(C) of the Statute and Air Force Logistics Command, AFLC Headquarters, AFLC/DPCE, 32 FLRA 261 (1988). Exceptions at 2. In this respect, the Agency alleges that the "the [A]rbitrator incorrectly applied the law when he found that the employer is obligated to bargain over `whatever issues' the Union might chose to propose." Id. at 3. It argues that § 7106(a)(1) and 7106(a)(2) "limit the matters that [ v60 p29 ] are or are not subject to bargaining" despite the Arbitrator's conclusion that the Agency should bargain in a manner similar to the private sector. Id. As such, it contends that the Arbitrator erred in determining that it "had an ongoing duty to negotiate whenever the Union requested to do so." Id.

      Additionally, the Agency argues that "[t]he decision did not address the issue" of whether any of the sections of the collective bargaining agreement were "affected by changes in law . . . or third party decisions." [n3]  Exceptions at 3.

      Finally, the Agency contends that "the [A]rbitrator did not consider the contract and made his ruling based on perceived changes to conditions of employment, such as those requiring the parties to address impact and implementation under 5 U.S.C. 7106(b)(2) and (b)(3)." [n4]  Id. at 1.

B.     Union's Opposition

      The Union argues that the Arbitrator correctly applied Article 42.03(A) in determining that the Agency needed to negotiate over the five new positions. Opposition at 2. It contends that the Agency mischaracterizes the Arbitrator's decision as contrary to law when in reality it merely disagrees with the Arbitrator's interpretation of the contract. Id. at 3. As such, it argues that the Arbitrator did not violate any law when he instructed the Agency to "bargain first and then complain or protest." Id.

      Additionally, the Union argues that the Arbitrator considered the parties' agreement in rendering his decision. Opposition at 2 (citing award at 10).

IV.     Analysis and Conclusions

A.     The Award Is Not Contrary to Law

      When a party's exception challenges an arbitration award's consistency with law, rule, or regulation, the Authority reviews the questions of law raised in the exception and the arbitrator's award de novo. See NFFE, Local 1437, 53 FLRA 1703, 1709 (1998). When applying a de novo standard of review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. Id. at 1710. In making that assessment, the Authority defers to the arbitrator's factual findings. See NTEU, Chapter 50, 54 FLRA 250, 253 (1998).

      The Agency challenges the award based on the Arbitrator's statement that it was required to "bargain in good faith first and then complain or protest." Award at 13. It contends that this statement undermines its right to assert that proposals are nonnegotiable because they may interfere with a management right under § 7106(a). As such, it argues that the award is contrary to law. However, for the following reasons, we disagree.

      Taken in context, the Arbitrator's statement notified the Agency that under the terms of Article 42.03(A), Local 3529 could have impacted the parties' agreement and that the Agency was obligated to review the Union's proposals. This construction of the Arbitrator's award is supported by the Arbitrator's statement that reads:

[w]hether or not their [the Union's] proposals were appropriate was a matter that should have been resolved in negotiations. In negotiations, the Agency could have rejected the Union's proposals. (Emphasis added)

Award at 12.

      Additionally, the Arbitrator limited the Agency's duty to bargain by finding that it was required to bargain only over issues that resulted from the Authority's decision in Local 3529. Id. at 13. Accordingly, unlike the Agency's characterization of the Arbitrator's award i.e., that the Agency is "obligated to bargain over `whatever issues' the Union might chose to propose," the award itself is limited to those matters impacted by Local 3529. Furthermore, the award does not preclude management from exercising its rights under § 7106 as alleged by the Agency. As a result, the award is not contrary to law.

B.     The Award Needs Additional Clarification

      Turning to the Agency's next exception, arbitrators exceed their authority when they fail to resolve an issue submitted to arbitration, resolve an issue not submitted to arbitration, disregard specific limitations on their authority or award relief to those not encompassed within the grievance. See AFGE, Local 1617, 51 FLRA 1645, 1647 (1996). [ v60 p30 ]

      Under the terms of the stipulated agreement, the Arbitrator was required to determine whether the Agency was obligated to bargain pursuant to Article 42.03(A). In his award, the Arbitrator determined that our decision in Local 3529 was a "third party decision" that fell within the scope of the Article 42.03(A). Nonetheless, the Arbitrator failed to directly address whether the decision in Local 3529 affected the parties' collective bargaining agreement. Instead, the Arbitrator concluded that the conditions of employment of those employees in the five positions added to the bargaining unit must have changed. Award at 12-13. However, this finding does not directly resolve the parties' stipulated issue -- whether the Agency was required to bargain under Article 42.03(A) because certain portions of the parties' agreement were affected by Local 3529. As such, because the Arbitrator has failed to directly resolve the issue submitted to arbitration, it is unclear whether the award is deficient. Cf. AFGE, Local 4044, Council of Prisons Local 33, 57 FLRA 98, 99 (2001) (where award is directly responsive to issues raised in arbitration, an arbitrator has not exceeded his authority).

      Additionally, with respect to the Agency's essence argument, when reviewing an arbitrator's interpretation of a collective bargaining agreement, the Statute provides that the Authority apply 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). Under this standard, the Authority will find that an arbitration award is deficient as failing to draw its essence from the collective bargaining agreement when the appealing party establishes that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990). The Authority and the courts defer to arbitrators in this context "because it is the arbitrator's construction of the agreement for which the parties have bargained." Id. at 576.

      In applying this standard, we note that the Arbitrator finds that "[w]hether or not 57 FLRA 122 [Local 3529] had any impact on the CBA was a matter for debate in negotiations . . . ." Award at 12. We believe this to be an implausible reading of the contract because the contract makes it clear that whether or not Local 3529 had any impact on sections of the CBA is the very question that has to be resolved in order for negotiations to occur.

      However, the Arbitrator also finds that it "was difficult for this Arbitrator to accept the notion" that the employees in the five classifications addressed in the Authority's decision in Local 3529 were "not . . . impacted in some manner" as a result of being covered by the CBA and side agreements. Id. The Arbitrator also concludes that the Agency "improperly refuse[d] to bargain over issues that resulted from a third party decision in [Local 3529][.]" Id. at 13. These statements taken together can lead one to believe that the basis of the Arbitrator's award was his view that Article 42.03(A) required negotiations because of the effect of the Authority's decision on the newly covered employees and, by extension, on the sections of the parties' agreement that applied to them. While this interpretation would not be implausible or otherwise deficient under the essence test, we are not able to reconcile it with the earlier comments by the Arbitrator. Because the basis of the Arbitrator's award is unclear, this matter must be remanded for further clarification. [n5] 

      Accordingly, as the Authority is unable to determine whether the award is deficient, the award is remanded to the parties for resubmission to the Arbitrator, absent settlement, for a clarification of the basis of the award. [n6]  See United States Dep't of the Army, HQ, III Corps and Fort Hood, Fort Hood, Tex., 56 FLRA 544, 547 (2000).

V.     Decision

      The Agency's contrary to law exception is denied. This matter is remanded to the parties for resubmission to the Arbitrator, absent settlement, to clarify the Arbitrator's award consistent with our above decision.

File 1: Authority's Decision in 60 FLRA No. 9
File 2: Opinion of Member Pope

Footnote # 1 for 60 FLRA No. 9 - Authority's Decision

   Member Pope's dissenting opinion is set forth after this decision.

Footnote # 2 for 60 FLRA No. 9 - Authority's Decision

   Article 42.03(A) of the parties' agreement reads as follows:

This Agreement will be opened for amendment upon the written request of either party if any of the Sections herein are affected by changes in law, order, rulings, judicial decision, or third party decisions.

Exceptions at 2.

Footnote # 3 for 60 FLRA No. 9 - Authority's Decision

   We construe this claim as a claim that the Arbitrator exceeded his authority by failing to resolve an issue submitted to arbitration.

Footnote # 4 for 60 FLRA No. 9 - Authority's Decision

   To the extent that the Agency states that the Arbitrator "did not consider the contract" along with stating that he "should have examined and complied with the language contained in the CBA" we construe these allegations as a claim that the award fails to draw it essence from the parties' agreement. Exceptions at 1, 3.

Footnote # 5 for 60 FLRA No. 9 - Authority's Decision

   Our dissenting colleague cites to NTEU, Chapter 90, 58 FLRA 390, 395 (2003) (citing United States Dep't of the Army, Headquarters, XVIII Airborne Corps, Fort Bragg, N.C., 41 FLRA 56, 61 (1991)) for the proposition that an arbitrator need not set forth specific findings supporting an award. However, we note that these cases do not address a situation where an arbitrator sets forth inconsistent findings nor should they be read in a manner that would otherwise undermine Authority precedent that arbitrators exceed their authority when "they fail to resolve an issue submitted to arbitration[.]" Bremerton Metal Trades Council, 59 FLRA 583, 589 (2004). Accordingly, as these cases are distinguishable from the present matter, they are not dispositive.

Footnote # 6 for 60 FLRA No. 9 - Authority's Decision

   The Agency argues that if the Authority remands this matter that it should be able to choose a new arbitrator. Exceptions at 4 (citing United States Dept of the Army, Corpus Christi Army Depot, Corpus Christi, Tex., 58 FLRA 77, 84 (2002) (Corpus Christi Army Depot). However, we note that in Corpus Christi Army Depot we found that "the [a]rbitrator has lost his neutrality and, in effect, has become a collection agent for the Unions' attorneys[.]" Id. at 84. Here, by contrast, no such allegation has been levied against this Arbitrator and the record does not show that this Arbitrator would be unable to address the concerns raised in this decision on remand. As such, we deny the Agency's request that the Authority mandate selection of a new arbitrator on remand. This does not, however, preclude the parties from deciding jointly to select a new arbitrator.