[ v60 p516 ]
60 FLRA No. 104
UNITED STATES
DEPARTMENT OF VETERANS AFFAIRS
VA PITTSBURGH
HEALTHCARE SYSTEM
(Agency)
and
AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES
LOCAL 2028
(Union)
0-AR-3854
_____
DECISION
December 29, 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 John Joseph D'Eletto 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 ruled that the Agency had violated the parties' collective bargaining agreement and the Federal Employees Flexible and Compressed Work Schedules Act, 5 U.S.C. §§ 6120-6133 (Work Schedules Act) by imposing a compressed work schedule on unit employees. For the reasons that follow, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
In June 2002, the Agency notified the Union of its intent to implement a commercial convenience food system for some of its facilities. In April 2003, the Agency notified the Union that as part of the implementation of the food system, it would establish a compressed 4-day workweek schedule of 10-hour days. In April, May, and June 2003, the parties met and negotiated matters concerning changes in conditions of employment anticipated by the introduction of the food system, but were unable to agree on establishing a compressed workweek under the Work Schedules Act.
On July 1, 2003, the Agency implemented the compressed 4-day workweek of 10-hour days for approximately 60 unit employees, who are not exempt from the Fair Labor Standards Act (FLSA). Relying on 5 U.S.C. § 6128(a), [n2] the Agency did not provide any overtime premium pay to these employees for the extra 2 hours worked each day under the compressed work schedule.
The Union filed a grievance disputing the Agency's establishment of the compressed work schedule and the Agency's failure to pay employees overtime for all hours worked in excess of 8 hours in a day. The grievance was not resolved and was submitted to arbitration.
Before the Arbitrator, the Union argued that the Agency's imposition of a mandatory compressed work schedule was contrary to the parties' collective bargaining agreement and the Work Schedules Act. The Union additionally argued that because the compressed work schedule is not sanctioned by the Work Schedules Act, the Agency violated the FLSA by failing to pay employees overtime premium pay for all hours worked in excess of 8 hours in a day.
Before the Arbitrator, the Agency argued that both the collective bargaining agreement and the Work Schedules Act allow for compressed work schedules. The Agency additionally argued that although the Work Schedules Act does not specifically address the imposition of a compressed work schedule by an agency, this does not mean that the Work Schedules Act does not permit an agency to establish a compressed work schedule.
The Arbitrator determined that the Agency violated the Work Schedules Act and the collective bargaining agreement, which the Arbitrator found incorporated the Work Schedules Act. He found that under the agreement, a compressed work schedule is an employee benefit and must be initiated by employees. He ruled that under 5 U.S.C. § 6130(a), [n3] unit employees could be included in a compressed work schedule under the auspices of the Work Schedules Act only if [ v60 p517 ] expressly authorized by a collective bargaining agreement between the Agency and the Union. Because employees had never requested a compressed work schedule and the parties had never reached an agreement on a compressed work schedule, the Arbitrator found that the Agency violated the Work Schedules Act and the parties' collective bargaining agreement in imposing a compressed work schedule under the Work Schedules Act.
In addition, he found that because the compressed work schedule was not properly implemented under the Work Schedules Act, the computation of compensation for hours worked by unit employees under the new schedule was governed by the FLSA, not by the Work Schedules Act. In view of these rulings, he found it unnecessary to address the additional arguments of the parties.
As a remedy, he ordered the Agency to cease the administration of the compressed work schedule, which it had imposed, and to compensate unit employees at overtime rates for all hours worked in excess of 8 hours in a day or 40 hours in a week from the time of the Agency's imposition of the compressed work schedule. He also awarded the unit employees liquidated damages under the FLSA, after concluding that the Agency failed to show that its imposition of the compressed work schedule without the payment of overtime premium pay was in good faith or that it reasonably believed that its imposition of the compressed work schedule without the payment of overtime premium pay was not a violation of the FLSA.
III. Positions of the Parties
A. Agency's Exceptions
The Agency contends that the award is deficient because it fails to draw its essence from the collective bargaining agreement and is based on nonfacts and because the award of liquidated damages is improper. See Exceptions at 1.
The Agency argues that the Arbitrator's order to cease the compressed work schedule fails to draw its essence from the agreement because it is "unconnected with the wording and purposes of the collective bargaining agreement[.]" Id. at 4. The Agency maintains that Article 20 specifically allows for such a schedule and that management attempted to negotiate the schedule in good faith.
The Agency argues that the Arbitrator's determination that the Agency improperly imposed the compressed work schedule is based on a nonfact because the determination is factually incorrect and unsupported. The Agency argues that the Arbitrator determined that the compressed work schedule adversely affected unit employees and that this determination is also based on a nonfact because it likewise is factually incorrect and unsupported.
The Agency argues that the award of liquidated damages is improper because it acted in good faith. The Agency maintains it attempted to negotiate the compressed work schedule, but was "thwarted" by the Union's refusal to agree. Id. at 6. The Agency also asserts that liquidated damages are not warranted where, as here, no unit employees attempted to opt out of the compressed work schedule.
B. Union's Opposition
The Union contends that the Agency's exceptions should be denied. The Union argues that the award is supported by the language of the collective bargaining agreement and the Work Schedules Act and is based on the facts presented to the Arbitrator.
The Union further argues that the award of liquidated damages is proper because the Arbitrator correctly found a lack of good faith on the part of the Agency. The Union emphasizes that this case is about the Agency's imposition of a compressed work schedule under the Work Schedules Act. The Union acknowledges that under § 7106(a) of the Statute, the Agency could have mandated that unit employees work a 4-day workweek of 10-hour days, but that the Agency would have been required to pay overtime premium pay. The Union maintains that instead, the Agency improperly and in bad faith tried to use the Work Schedules Act to avoid paying overtime. [ v60 p518 ]
IV. Analysis and Conclusions
A. The award does not fail to draw its essence from the agreement.
In resolving exceptions that challenge an arbitrator's interpretation of a collective bargaining agreement, the Authority applies the deferential "essence standard of review that federal courts apply in reviewing awards in the private sector." See, e.g., AFGE, Nat'l Council of Field Labor Locals, Local 2391, 59 FLRA 547, 549 (2003). The standard is deferential because it is the arbitrator's construction of the agreement for which the parties have bargained. See id. To demonstrate that an award fails to draw its essence from a collective bargaining agreement, the appealing party must show that the award: (1) is so unfounded in reason and fact and so unconnected with the wording and purposes of the agreement so 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 id.
In this case, the Agency claims that the Arbitrator's order to cease the compressed work schedule is unconnected to the wording and purposes of the agreement because Article 20 specifically allows for such a schedule and the Agency attempted in good faith to negotiate such a schedule. For the reasons that follow, we deny this exception.
We construe the Arbitrator's order to cease the compressed work schedule as applying only under the Work Schedules Act. It is clear, in this regard, that the dispute concerned the Agency's authority under the Work Schedules Act to impose the compressed work schedule. As the Union acknowledges, the Agency could have imposed a 4-day work week of 10-hour days under § 7106(a), but in that event the provisions of § 6128(a) on overtime premium pay would not apply. The Office of Personnel Management (OPM) confirms in the Handbook on Alternative Work Schedules (Handbook) that nothing in the Work Schedules Act affects the authority of an agency to use nonstandard work schedules so long as applicable premium pay requirements are observed.
The Arbitrator found that under the agreement, a compressed work schedule is an employee benefit and must be initiated by employees. The Arbitrator also found that the agreement incorporated the Work Schedules Act. As acknowledged by the Arbitrator, § 6130(a)(2) provides that bargaining unit employees can be included in a compressed work schedule under the Work Schedules Act only when expressly authorized by a collective bargaining agreement between the agency and the exclusive representative. As explained by OPM in the Handbook, although the decision to establish a compressed work schedule is at the discretion of an agency, nothing in the Work Schedules Act authorizes unilateral action by an agency where bargaining unit employees are concerned.
In view of the Arbitrator's interpretation of the agreement, and provisions of the Work Schedules Act and their interpretation by OPM, which administers the Work Schedules Act, the Agency fails to establish that the Arbitrator's order to cease the compressed work schedule under the auspices of the Work Schedules Act fails to draw its essence from the agreement. Because employees never requested the schedule and the parties never reached agreement on a compressed work schedule under the Work Schedules Act, the Agency provides no basis for finding deficient the Arbitrator's ruling that the Agency violated the agreement when it unilaterally imposed a compressed work schedule under the Work Schedules Act.
B. The award is not deficient because it is based on nonfacts.
To establish that an award is deficient because it is based on a nonfact, the appealing party must show that a central fact underlying the award is clearly erroneous, but for which the arbitrator would have reached a different result. See, e.g., Soc. Sec. Admin., Office of Hearings and Appeals, 58 FLRA 405, 407 (2003) (SSA). The Authority will not find an award deficient on the basis of an arbitrator's determination on any factual matter that the parties disputed at hearing. See id. In addition, an arbitrator's interpretation of a collective bargaining agreement is not subject to challenge as a nonfact. See id.
The Agency claims that the Arbitrator's findings that the Agency improperly imposed the compressed work schedule and that the schedule adversely affected unit employees are deficient as based on nonfacts. We deny this exception.
The Arbitrator's finding that the Agency improperly imposed the compressed work schedule constitutes the Arbitrator's interpretation of the parties' collective bargaining agreement and is not subject to challenge as a nonfact. See id. Moreover, to the extent that there is a factual element to the Arbitrator's finding, the matter clearly was disputed at arbitration. See id.
In addition, contrary to the Agency's assertion, the Arbitrator never found that the schedule adversely [ v60 p519 ] affected unit employees. This was one of the arguments of the parties that the Arbitrator found unnecessary to address. See Award at 42. Accordingly, no basis is presented for finding the award deficient. See SSA, 58 FLRA at 407 (nonfact assertion denied because the arbitrator did not make the finding alleged to constitute a nonfact).
C. The award of liquidated damages is not deficient.
The determination of whether the Arbitrator properly awarded liquidated damages under the FLSA, 29 U.S.C. § 260, requires a legal conclusion of whether the Agency's conduct was in "good faith" or "reasonable[]." See NTEU, 53 FLRA 1469, 1482 (1998). Accordingly, the Authority must review de novo the Arbitrator's conclusion that the Agency's conduct was not in good faith or reasonable. See id.
An employer that violates the overtime provisions of the FLSA is liable to employees for the amount of their overtime compensation and an equal amount as liquidated damages. See 29 U.S.C. § 216(b); id. at 1481. The standard for when an award of liquidated damages is appropriate is set forth in 29 U.S.C. § 260. "That standard, in effect, establishes a presumption that an employee who is improperly denied overtime shall be awarded liquidated damages . . . ." NTEU, 53 FLRA at 1481. Consequently, the award of liquidated damages is the norm and the denial of liquidated damages is the exception. See id.
To avoid an award of liquidated damages, an employer bears the "substantial burden" of establishing a good-faith, reasonable-basis defense. See id. (quoting Kinney v. District of Columbia, 994 F.2d 6, 12 (D.C. Cir. 1993)). The employer must show that its act or omission giving rise to the violation of the FLSA was in good faith and that it had reasonable grounds for believing that it was in compliance with the FLSA. See id. To meet this burden, the employer must establish that it attempted to ascertain the FLSA's requirements. See id.
The Arbitrator expressly concluded that the Agency had failed to show that its imposition of the compressed work schedule without the payment of overtime premium pay was reasonable or in good faith. In claiming that the award is deficient, the Agency asserts that it acted in good faith because it attempted to negotiate the compressed work schedule and that liquidated damages are unwarranted because no employees opted out of the compressed work schedule. These assertions provide no basis for finding the award of liquidated damages deficient.
The Agency's actions in imposing the compressed work schedule on unit employees under the Work Schedules Act without the express authorization of a collective bargaining agreement directly violated § 6130(a)(2). The Agency's actions were also contrary to the Handbook, which the Agency, itself, cited to the Arbitrator to support its actions. OPM specifically advises agencies that nothing in the Work Schedules Act authorizes the unilateral imposition by an agency of a compressed work schedule on unit employees. Moreover, the Agency fails to establish that despite these provisions, it attempted to ascertain whether the Work Schedules Act otherwise authorized its unilateral imposition of 10-hour workdays without the payment of overtime premium pay.
In these circumstances, the Agency fails to show good faith and reasonableness and fails to meet the substantial burden necessary to overcome the presumption in favor of liquidated damages. Accordingly, no basis is presented for finding the award of liquidated damages deficient. See United States Dep't of the Navy, Naval Explosive Ordnance Disposal Tech. Div., Indian Head, Md., 57 FLRA 280, 287 (2001); United States Dep't of the Navy, Naval Explosive Ordnance Disposal Tech. Div., Indian Head Md., 56 FLRA 280, 286 (2000). Accordingly, we deny this exception.
V. Decision
The Agency's exceptions are denied. [n4] [ v60 p520 ]
Concurring opinion of Chairman Cabaniss:
I write separately to address this new aspect of Authority cases addressing the Flexible and Compressed Work Schedules Act, 5 U.S.C. §§ 6120-6133 (the Act), i.e., when it is an agency rather than an exclusive representative that is seeking to establish a compressed work schedule (CWS), and it is the exclusive representative rather than the agency that is opposed to the new CWS. I note that I agree with the majority that the Agency's exceptions do not warrant setting aside the Arbitrator's denial of the Agency's attempts to impose this new CWS. However, the resolution of these exceptions sheds little light on the process whereby collective bargaining in these circumstances should be accomplished.
As relevant here, the Act establishes a CWS program for Federal agencies and their employees and exclusive representatives that both comports with and deviates from traditional collective bargaining concepts under our Statute. Compressed work schedules are a negotiable condition of employment. See Bur. of Land Mgmt. v. FLRA, 864 F.2d 89, 90 (9th Cir. 1988) (BLM). While agencies are authorized to establish CWSs, it is not a unilateral authorization, as unrepresented employees must be allowed the opportunity to vote whether to be covered by a CWS (§ 6127(b)(1)) and employees in a bargaining unit are subject to a CWS only to the extent specifically provided by a collective bargaining agreement (§ 6130(a)(2)). As part of the collective bargaining process, in determining whether a particular CWS proposal impermissibly interferes with the Agency's management of its workforce, an agency's rights under § 7106 of the Statute do not come into play. See BLM. Rather, any alleged impermissible interference with an agency's management of its workforce is resolved by the standards set out in the Act at § 6131. See id. In those circumstances where there is an impasse between the parties regarding an agency's objection to the establishment of a CWS program, or an agency's desire to terminate an existing CWS program, that bargaining impasse must be submitted to the Federal Service Impasses Panel (FSIP) for resolution (§ 6131).
Clearly, much of the framework of the Act is aimed at those circumstances where it is an agency opposing the creation of a CWS, rather than (as in the present circumstances) where it is an exclusive representative opposing the creation of the CWS. Consequently, collective bargaining in the circumstances here would seem to require a hybridization of the Statute and the Act. I would find that, consistent with the Act and BLM, agencies have no unilateral right to establish CWS programs because they have no ability to rely on their § 7106 rights under the Statute. Thus, because the Act requires that CWSs for bargaining unit employees must first be expressly provided under a collective bargaining agreement, any such agreement must be concluded the same as collective bargaining over any other substantively negotiable matter under the Statute. And, in that regard, § 6121(8) notes that "collective bargaining" and "collective bargaining agreement" under the Act have the same meaning as under the § 7103(a)(8) and (9) of the Statute.
Consequently, an agency would need to, at a minimum, bargain to impasse with an exclusive representative where the exclusive representative does not agree to the creation of the CWS. At that point, and consistent with collective bargaining under the Statute, the agency would have to notify the exclusive representative of the agency's intent to implement, at which point the exclusive representative could timely invoke the services of the FSIP, and have the FSIP resolve the bargaining dispute. If, however, there was no timely invocation of the FSIP, the agency could implement the disputed proposals, thereby creating enforceable contract terms between the parties. See Dep't of Labor, 60 FLRA 68, 71-72 (2004).
Because the Agency did not fulfill its collective bargaining obligation consistent with the above requirements, I would find that the Agency did not implement an enforceable CWS under the Act. Therefore, I agree with the decision to not set aside the Arbitrator's actions in this case.
Footnote # 1 for 60 FLRA No. 104 - Authority's Decision
The concurring opinion of Chairman Cabaniss is set forth at the end of this decision.
Footnote # 2 for 60 FLRA No. 104 - Authority's Decision
Section 6128(a) provides: "The provisions of section 5542(a) and 5544(a) . . . , section 7 of the Fair Labor Standards Act . . . or any other law, which relate to premium pay for overtime work, shall not apply to the hours which constitute a compressed schedule."
Footnote # 3 for 60 FLRA No. 104 - Authority's Decision
(1) In the case of employees in a unit represented by an exclusive representative, any flexible or compressed work schedule, and the establishment and termination of any such schedule, shall be subject to the provisions of this subchapter and the terms of a collective bargaining agreement between the agency and the exclusive representative.
(2) Employees within a unit represented by an exclusive representative shall not be included within any program under this subchapter except to the extent expressly provided under a collective bargaining agreement between the agency and the exclusive representative.
Footnote # 4 for 60 FLRA No. 104 - Authority's Decision
As the denial of the Agency's exceptions for the reasons stated fully resolves this case, we express no view on other issues that are not necessary to the disposition of this case, including the role, if any, of the Federal Service Impasses Panel in situations such as the one here.