United States, Department of the Treasury, Internal Revenue Service, Washington, D.C. (Agency) and National Treasury Employees Union (Union)

[ v60 p966 ]

60 FLRA No. 171







May 23, 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 Joshua M. Javits 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 found that the Agency violated the parties' collective bargaining agreement by issuing a notice of proposed reduction-in-force (RIF) before it became necessary, and he ordered the Agency to rescind the notice. As a result of events that occurred after the issuance of the award, we find that the award is moot, and we set it aside.

II.      Background and Arbitrator's Award

      The Agency commenced a competitive sourcing competition of certain work of its campus operations function of its Modernization and Information Technology Services (MITS), which provides information technology support to Agency employees. Although the competitive sourcing study was not expected to be completed until the Summer of 2004, the Agency issued a notice on October 2, 2003, pursuant to Article 19 of the parties' collective bargaining agreement, [n1]  notifying the Union of a reduction-in-force (RIF) for the campus operation function with "an approximate target date of December 1, 2004." Notice at 1.

      The Union filed a grievance alleging that the Agency's notice violated the requirements of Article 19 and the Statute. The Union claimed that, at this early point in the competitive sourcing process, there was "no way anyone can state that a RIF will be `necessary,' which is a condition precedent to the provision of any notice under Article 19 or pursuant to 5 U.S.C. § 7116(a)(1) and (5)." Grievance at 1.

      The grievance was not resolved, and the matter was submitted to arbitration on the following stipulated issue:

Did the National Agreement, Article 19, and 5 U.S.C. [§] 7116(a)(1) and (5) bar the Agency from issuing its October 2, 2003, notice to NTEU that it had determined it would conduct a Reduction[-]in[-]Force in the Campus Operation function of the Modernization and Information Technology Services Organization? If so, what shall be the remedy?

Award at 2.

      The Arbitrator sustained the grievance. He concluded that the Agency violated Article 19 by issuing a notice of proposed RIF before it became necessary. He viewed the dispute to be about "what constitutes the `necessary' circumstances before the Agency can issue such a notice." Id. at 6. He ruled that "[w]hile it may be feasible that the Agency could determine a RIF was necessary at the time of solicitation in certain instances, these circumstances do not exist in the present case." Id. at 11. As a remedy, the Arbitrator ordered the notice rescinded. In addition, he directed that when a RIF is appropriately found to be necessary, the Agency will then reissue the notice of intended RIF.

III.      Post-award Actions

      The Arbitrator's award is dated August 5, 2004. In August 2004, after a cost comparison was completed, it was determined that accomplishing the work in-house with reduced staffing would be more economical than having the work performed by contractors. In order to accomplish the reduced staffing, a RIF was necessary. [ v60 p967 ]

      The parties then engaged in bargaining over procedures and appropriate arrangements under the expedited ground rules contained in Article 19, notwithstanding the Union's grievance and the issuance of the Arbitrator's award. In view of the negotiations, the Union notified the Agency on September 7, 2004, that it would not enforce the Arbitrator's order to rescind the disputed notice and reissue the notice when appropriate. The negotiations resulted in a complete agreement, which was executed on October 14, 2004.

IV. Positions of the Parties

A.     Agency's Exceptions

      The Agency contends that the award is deficient because (1) the award is based on a nonfact; (2) the award is contrary to law; (3) the Arbitrator exceeded his authority by failing to resolve an issue submitted; and (4) the award fails to draw its essence from the parties' collective bargaining agreement. In addition, as a result of the post-award actions, the Agency asserts that the Arbitrator's remedy is no longer appropriate.

B.      Union's Opposition

      The Union first contends that the Agency's exceptions are untimely. Alternatively, on the merits, the Union contends that the Agency provides no basis for finding the award deficient. In addition, as a result of the post-award actions, the Union asserts that the Arbitrator's status quo ante remedy has been superseded by subsequent events. As to the rest of the award, the Union notes that because this was a national arbitration, the award constitutes a binding, precedential interpretation of Article 19.

V.      Threshold Issues

A.     The exceptions were timely filed.

      In arguing that the exceptions were not timely filed, the Union notes that the award was served on both parties on August 7, 2004, by first class mail, and asserts that it was also served on August 10, 2004, by e-mail. The Union argues that the exceptions filed on September 10, 2004, were untimely because the Arbitrator's service by e-mail on August 10 is tantamount to service by facsimile and required any exceptions to be filed no later than Sep