[ v60 p545 ]
60 FLRA No. 110
DEPARTMENT OF THE ARMY
XVII AIRBORNE CORPS AND FORT BRAGG
WOMACK ARMY MEDICAL CENTER
FORT BRAGG, NORTH CAROLINA
OF GOVERNMENT EMPLOYEES
January 10, 2005
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 Sue Olinger Shaw 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.
In the award, the Arbitrator determined that the Agency violated regulation and the parties' agreement when it failed to pay the grievant a 25% retention bonus. For the reasons that follow, we find the award deficient and set the award aside.
II. Background and Arbitrator's Award
In 1999 the Agency adopted a retention plan in an effort to retain respiratory therapists (RTs). Award at 3. Under the terms of the plan, any RT that was employed prior to the adoption of the plan was to be paid a yearly 25% retention bonus. However, RTs subsequently hired would only receive a 10% bonus for 1-2 years of experience; 15% for 3-5 years; 20% for 6-9 years and 25% for more than 10 years. Id.
The Union filed a grievance alleging that the Agency had engaged in "disparagement treatment" towards the grievant when it refused to pay her the same retention bonus that other less credentialed RTs were receiving. Award at 4. The Agency denied the grievance and the matter was submitted to arbitration. The Arbitrator framed the issues as follows:
1. Is the [g]rievance arbitrable?
2. Did the Agency fail to make an appropriate evaluation of the retention bonus due the [g]rievant? If so, what shall be the remedy?
Id. at 2; Exceptions at 3.
The Arbitrator determined that the Agency developed and implemented a "retention bonus plan that was in violation of DOD policy, the Federal Statute and the Agreement between the parties[.]" Id. at 22. In this respect, the Arbitrator found that "the plan clearly violates the requirements of DOD policy 1400.25-M, SC 275.4.2 and 5 C.F.R. 575.301 because it substitutes years of experience for `unusually high or unique qualifications of the employee or a special need of the Agency for the employee's services' as the criterion for establishing retention bonuses." [n1] Id. at 16. The Arbitrator determined that years of experience cannot be used as the basis for the retention bonus when "there is clearly a more direct measure: the possession of credentials conferred by a legitimate credentialing agency." Id. (emphasis in the original). The Arbitrator found that the grievant had more credentials than many RTs receiving the highest retention bonus and, as such, "the requirement for equitable treatment demanded that the [g]rievant be given the same percentage level retention bonus as the grandfathered employees." Id. at 18. In fact, the Arbitrator found that many of the RTs receiving a retention bonus, unlike the grievant, had no credentials at all. Id. at 4.
Moreover, with respect to the Agency's underlying rationale for the plan, the Arbitrator stated:
Additionally, the Agency is required to make a determination that an employee would be likely to leave in the absence of a retention allowance. It would be possible to develop an argument that lesser qualified employees, depending on their basic pay rates, might require a larger percentage retention bonus than more qualified employees, but such an argument would require detailed comparisons of community differentials at various levels of qualification. In this case, the Agency has not made such an argument although it did argue that a community salary [ v60 p546 ] survey had indicated that the non-credentialed RT's at Womack might leave and go to the Fayetteville VA hospital if they did not receive the 25% retention bonus that is given them. The Agency did not offer a compelling argument that such moves would be likely, and it is revealing that the only other hospital included in the survey would not even hire RT's who were not credentialed at least at the certified level.
Award at 16-17.
Finally, the Arbitrator determined that "[t]he plan to increase the retention bonus automatically upon completion of a set number of years' experience is also in violation of DOD and Federal [s]ervice policy because, like grandfathering of a retention bonus, it would render meaningless the requirement for annual review and reevaluation of the need to continue a retention bonus." Id. at 18. As such, the Arbitrator found that the development and implementation of the plan was in violation of Office of Personnel Management (OPM) regulations, DOD policy and the parties' agreement, and that because of this the Agency had committed an unwarranted and unjustified personnel action.
Accordingly, the Arbitrator determined that "had the Agency based its plan on criteria properly related to the level of qualifications or the essentiality of the RT's it employed" the grievant would have received a 25% retention allowance given her credentials. Id. at 20. Therefore, the Arbitrator determined that because the Agency's plan was invalid, and because the Agency should have implemented a plan based on qualifications, not experience, the grievant was entitled to a 25% retention allowance and back pay under the Back Pay Act. Id. at 22.
III. Preliminary Issue
The Authority issued an Order to Show Cause to the Union to show why its un-postmarked and apparently untimely opposition should be considered by the Authority. The Union's counsel timely responded to the Order by stating that the opposition was mailed on July 19, 2004, one day before it was due, at the same time it mailed the opposition to the Union local president. [n2]
Upon review, we find that the Union has failed to show good cause as to why its opposition should be considered timely. As the Authority's Regulations state, if a submission is filed without a postmark, it is presumed to have been filed no more than five days prior to receipt. As the opposition was received on July 27, 2004, it is presumed that it was filed no earlier than July 22, 2004, or two days after the last day to file a timely opposition. See 5 C.F.R. § 2429.21(b); Order to Show Cause at 2. Here, we note that Union counsel offers no affidavit supporting his contention as to the date of filing. Moreover, the only documentation provided consists of a photocopy of the envelope counsel used to serve the Union president at allegedly the same date and time, but even that envelope contains only a partially legible date. As such, we find that the Union has failed to demonstrate that its opposition was timely filed. See Hawaii Federal Employees Metal Trades Council, 57 FLRA 450, 452 (2001); National Association of Government Employees, Local R14-52, 55 FLRA 648, 649 (1999).
IV. Positions of the Parties
A. Agency's Exceptions
The Agency argues that the award is contrary to law because it excessively interferes with management's right to retain employees under § 7106(a)(2)(A) of the Statute. Exceptions at 5. In support of this contention, the Agency cites AFGE, Local 1827, 58 FLRA 344 (2003) (Member Armendariz dissenting in part) and argues that the Authority has defined "the right to retain employees as the right to establish policies or practices that encourage or discourage employees from remaining employed by an Agency." Exceptions at 6. It contends that the Arbitrator violated its right to retain when she implemented her own retention bonus plan. Id. Moreover, it asserts that the Arbitrator's award abrogates its right to determine the criteria to be used in setting payment under its retention pay plan. Id.
Furthermore, the Agency argues that there is no evidence that the Arbitrator was enforcing a procedure or an appropriate arrangement in the parties' agreement. Id. at 6-7. As such it contends that the award cannot satisfy the first prong in United States Dep't of the Treasury, Bureau of Engraving and Printing, Wash, D.C., 53 FLRA 146 (1997) (BEP). Id. at 7.
Moreover, the Agency argues that the award is contrary to Government-wide regulation. Id. It contends that only it has the ability under OPM regulation to establish the "criteria and amount of the retention allowance." Id. at 8. [n3] It asserts that its retention bonus [ v60 p547 ] plan, based on years of experience, "met the criteria of the CFR [5 C.F.R. § 575.305]" and that the Agency has "broad flexibility" in developing criteria under Government-wide regulation. Id. As such, it contends that the Arbitrator had no authority to establish a retention plan that would pay the grievant a 25% bonus. Id. at 8-10 (citing 5 C.F.R. § 575.305(b)). Additionally, it argues that the Arbitrator increased the retention allowance despite a Government-wide regulation that prohibits the appeal of an agency's decision to reduce or terminate a retention bonus plan. Id. at 10 (citing 5 C.F.R. § 575.307(c)).
Turning to its last argument, the Agency argues that the award is contrary to the Back Pay Act. Id. at 11. In this respect, the Agency contends that the Arbitrator never found that the grievant was entitled to a retention allowance under the Agency's retention plan and, as such, there was no causal connection between the actions of the Agency and loss of money to the grievant. Id.
B. Union's Opposition
As set forth above, the Union filed an untimely opposition.
V. Analysis and Conclusions
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 underlying factual findings. See NTEU, Chapter 50, 54 FLRA 250, 253 (1998).
In addressing whether the award is contrary to law, we will first determine whether the Arbitrator erred as a matter of law in finding that the Agency's retention allowance did not comply with law or Government-wide regulation. Second, we determine whether the award to the grievant of a 25% retention allowance is deficient.
A. The Arbitrator Did Not Err in Finding that the Agency's Retention Allowance Plan Was Not in Compliance with Government-wide Regulation
Under OPM regulation, an agency must base its decision to pay a retention allowance on a finding that employees are "likely to leave the Federal service." 5 C.F.R. 575.305(c) (emphasis added); see also, 64 Fed. Reg. 71633, 71634 (Dec. 22, 1999) (allowance allowable "if the employee would be likely to leave Federal service without the allowance).
Here, the only Agency justification for this plan provided by the Agency was to either keep non-credentialed RTs from leaving for the Department of Veterans Affairs (an executive Agency) or to keep credentialed RTs from leaving for another hospital. Award at 16-17; 5 U.S.C. § 101. This justification, however, is at odds with OPM's regulations that an agency may not use, as a basis of awarding an allowance, a finding that it is likely that employees may take another position within the Federal government. See also, SC522.214.171.124.1. (DOD regulation also requiring a finding that an employee must be likely to leave the Federal service in order to be eligible for a retention bonus). Moreover, as the Arbitrator noted, the Agency has not put forth any other argument that it was likely that an RT would take a position elsewhere. In fact, the Arbitrator found that the only other hospital in the survey presented does not hire non-credentialed RTs, a finding which cannot support the Agency's rationale for including non-credentialed RTs in its retention allowance plan. As such, the Arbitrator's factual determinations, to which we defer, lead to a conclusion that the Agency's retention plan did not comply with Government-wide regulation. [n4]
B. The Arbitrator Erred in Awarding the Grievant a 25% Retention Allowance
Consistent with the Arbitrator's findings and conclusions, the Agency's retention allowance plan was not validly implemented. Moreover, only the Agency has the ability to implement a retention allowance plan, not the Arbitrator. See 5 C.F.R. § 575.303; 575.305(a)(1) (implementation of a retention plan left solely to the Agency head or an "official who has been delegated the authority to act for the head of the agency"). See, e.g., United States Dep't of the Army, 10th Mountain Division, (Light Infantry) and Fort Drum, Fort Drum, N.Y., 56 FLRA 792, 795 (2000) (arbitrator's power may be limited by Government-wide regulation). In this circumstance, no basis is provided for the Arbitrator to award, or the Agency to pay, the grievant a retention bonus. Therefore, the Arbitrator's award to the grievant [ v60 p548 ] of a 25% retention allowance is contrary to Government-wide regulation. [n5]
The award is set aside.
§ 575.305 Agency retention allowance plans; higher level review and approval; and criteria for payment.
(a) Agency retention allowance plans.
(1) Before paying a retention allowance under this subpart, the head of an agency shall establish a retention allowance plan.
. . . .
(c) Criteria for payment.
(1) Each allowance paid under this subpart shall be based on a written determination that the unusually high or unique qualifications of the employee or a special need of the agency for the employee's services makes it essential to retain the employee and that, in the absence of such an allowance, the employee would be likely to leave the Federal service.
DOD 1400.25-M, SC 575. Subchapter 575
Recruitment and Relocation Bonuses; Retention Allowances; and Supervisory Differentials
SC575.4.2 Retention Allowances
SC5126.96.36.199 Allowance Offer and Approval
SC5188.8.131.52.1. A retention allowance of up to 25% of basic pay may be offered to certain current employees in order to retain their services. The approving officer must certify in writing that unusually high or unique qualifications of the employee or a special need of the Agency for the employee's services makes it essential to retain the employee and, absent a retention allowance, the employee would be likely to leave Federal service.
. . . .
SC5184.108.40.206.4. Prior to approval of any allowance, approving officials shall establish criteria for such offers to comply with 5 C.F.R. 575.305 (reference (b)) and to ensure consistent treatment of employees in similar situations. Criteria applied in each case when determining to authorize the retention allowance and the amount of payment must comply with those established by OPM under 5 CFR 575.305(c)(reference (b)).
. . . .
SC5220.127.116.11.2. At least every 12 months, approving officials shall make a written determination whether the allowance is still warranted and that the conditions giving rise to the original determinations still exist. In addition, officials shall establish procedures to review the appropriateness of payments whenever the conditions that originally prompted the payment have significantly changed, including significant increases in basic pay.
Award at 8-9.
Footnote # 1 for 60 FLRA No. 110 - Authority's Decision
Footnote # 2 for 60 FLRA No. 110 - Authority's Decision
Footnote # 3 for 60 FLRA No. 110 - Authority's Decision
Footnote # 4 for 60 FLRA No. 110 - Authority's Decision
As the Arbitrator determined that there is no justification for the Agency's determination to implement a retention allowance plan, we need not address whether the specifics of the illegally implemented plan would otherwise comply with Government-wide regulation.
Footnote # 5 for 60 FLRA No. 110 - Authority's Decision