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60 FLRA No. 177
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
DECISION AND ORDER
May 31, 2005
Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members [n1]
I. Statement of the Case
This unfair labor practice case is before the Authority on exceptions to the attached decision of the Administrative Law Judge filed by the Respondent. The General Counsel filed an opposition.
The complaint alleges that the Respondent violated § 7116(a)(1) and (5) of the Federal Service Labor-Management Relations Statute (the Statute) when the Respondent repudiated a grievance settlement agreement.
Upon consideration of the Judge's decision and the entire record, we conclude for the reasons discussed below that the Respondent did not commit the unfair labor practices alleged in the complaint. Accordingly, we will dismiss the complaint.
II. Background and Judge's Decision
The affected employee in this case sustained an on-the-job injury for which he filed a claim for workers' compensation. While the claim was pending, the employee used paid leave. The Union filed a grievance claiming that the Respondent failed to comply with federal regulations regarding the timely processing of the claim for compensation. When the employee's claim for benefits was approved and he was given the option to "buy back" the leave he had used, the employee declined to do so. See DOL Information Guide CA-11 When Injured at Work Information Guide for Federal Employees, April 25, 2005 (DOL Website).
Subsequently, the Respondent, through an authorized representative, entered into a settlement agreement with the Charging Party to resolve the grievance. Specifically, the settlement agreement provided for the payment of $3,000 to the employee. However, the Respondent refused to pay the employee, resulting in an unfair labor practice (ULP) charge and complaint alleging that the Respondent repudiated the settlement agreement with the Charging Party.
According to the Judge, the Respondent acknowledged failing to pay the employee under the terms of the settlement agreement. The Judge noted that the Respondent acknowledged that its settlement of the grievance was an implicit admission that an unjustified or unwarranted personnel action occurred. See Judge's Decision at 8. The Judge stated that the Respondent contended that it refused to pay the amount in the settlement agreement because such a payment would constitute a violation of the Back Pay Act, 5 U.S.C. § 5596. Additionally, the Respondent claimed that because the employee chose not to buy back his leave, he did not suffer a withdrawal or reduction of his pay, allowances or differentials.
The Judge determined that the sole issue to be determined was the legality of the payment to the employee. The Judge stated that under the Back Pay Act, an employee who was affected by an unjustified or unwarranted personnel action which resulted in the withdrawal or reduction of pay, allowances or differentials is entitled to receive an amount equal to all or part of the pay, allowances or differentials the employee would have earned or received.
The Judge rejected the Respondent's claim that the employee suffered no loss. The Judge found that, as alleged in the grievance, the Respondent's delay in processing the employee's claim caused him to "`lose'" accrued leave. Judge's Decision at 7. The Judge also determined that leave constitutes an allowance pursuant to 5 U.S.C. § 5596(1)(B)(i) and (ii). The Judge stated that the settlement agreement did not set forth the basis for the monetary payment. However, the Judge found that the purpose of the settlement agreement was to settle the grievance. Accordingly, the Judge found "that the intent of the parties to the settlement agreement was [ v60 p986 ] to partially compensate [the employee] for the use of his leave." Id.
Based on the foregoing, the Judge concluded that the agreement did not violate the Back Pay Act. Accordingly, the Judge found that the Respondent violated § 7116(a)(1) and (5) of the Statute and recommended that the Authority order the Respondent to pay the employee the $3,000 as set forth in the settlement agreement plus interest and post a notice.
III. Positions of the Parties
A. Respondent's Exceptions
The Respondent contends that it did not violate § 7116(a)(1) and (5) of the Statute because a refusal to honor an agreement that is contrary to law is not an unlawful repudiation of the agreement. The Respondent argues that the settlement agreement is contrary to the Back Pay Act and, therefore, its failure to comply with the agreement did not constitute an unlawful repudiation of the agreement.
B. General Counsel's Opposition
The General Counsel argues that the Respondent voluntarily entered into a settlement agreement to avoid the costs of arbitration. According to the General Counsel, if the Respondent is permitted to relitigate the merits of the grievance, then the Respondent has "successfully discovered through its repudiation a cost effective alternative to arbitration." Opposition at 5. The General Counsel contends that the Respondent should not be allowed to justify its repudiation by asserting that the agreement is illegal under the Back Pay Act. See Opposition at 5. The General Counsel asserts that to allow the Respondent to "renounce its own settlement agreement through such a manipulation would directly contradict public policy encouraging the amicable settlement of disputes prior to litigation." Id.
Additionally, the General Counsel argues that the Respondent is attempting "to have the prudence of its own settlement agreement examined" by arguing it is void and unenforceable under the Back Pay Act. Id. at 4. The General Counsel contends that the Respondent is trying to relitigate the terms of the settlement agreement.
IV. Analysis and Conclusions
The Authority will not find an unlawful repudiation where the agreement allegedly repudiated is contrary to law. See Gen. Servs. Admin., Washington, D.C., 50 FLRA 136, 139 n.7 (1995). Thus, the Respondent did not violate the Statute if the settlement agreement is contrary to the Back Pay Act. The Authority has long held that under the Back Pay Act, backpay is authorized only when: (1) an unjustified or unwarranted personnel action; (2) resulted in the withdrawal or reduction of pay, allowances or differentials. See United States Dep't of Health & Human Servs., 54 FLRA 1210, 1218-19 (1998).
The Respondent concedes that it committed an unjustified and unwarranted personnel action and, as a result, the first part of the Back Pay Act test has been met. See Exceptions at 7. The issue is whether the action resulted in a loss -- a withdrawal or reduction of pay, allowances, or differentials -- under the second part of the Back Pay Act test.
An employee, such as the affected employee here, who requires time off because of a work-related disability has three options. The employee may choose to: (1) use leave without pay and receive no pay, (2) use paid leave and receive regular pay, or (3) if a claim is approved, receive workers' compensation benefits at a rate of either 66 percent or 75 percent of regular pay, depending on whether the employee has dependents. 20 C.F.R. § 10.401; See DOL Information Guide CA-11 (DOL Website).
An employee is not entitled to both regular pay (paid leave) and workers' compensation benefits. Id. However, where an employee uses paid leave prior to being approved for workers' compensation benefits, the employee may, with the agency's concurrence, "buy back" the leave taken from the agency with a combination of the workers' compensation benefits and a cash payment equal to the difference between the regular pay and those benefits. See 20 C.F.R. § 10.425; DOL Information Guide CA-11 (DOL Website). In this regard, the leave "buy back" option is a mechanism by which an employee may effectively receive workers' compensation benefits retroactively. The option puts the employee in the same financial position as if the employee had been granted, and elected to receive, workers' compensation benefits prior to taking leave.
Because an employee is not entitled to both regular pay and compensation benefits (and may buy back leave), a delay in receiving benefits does not cause an employee who used paid leave any loss. In this case, for example, the employee used paid leave while his workers' compensation claim was pending and, after benefits were approved, the Respondent offered the employee the option to buy back his leave with a combination of those benefits and a cash payment equal to the difference between his regular pay and the benefits. Thus, the employee was offered the choice that any employee who requires time off as a result of suffering a work-related [ v60 p987 ] injury is offered: use leave and be paid at the higher leave rate or buy back the leave with compensation benefits and a cash payment. The workers' compensation benefits approved for the employee effectively granted him benefits retroactive to his first day of leave.
Consistent with the foregoing, the employee suffered no monetary loss. In finding that the employee lost paid leave, the Judge ignored the fact that, after compensation benefits were approved, the employee was given the choice to buy back that leave. The employee was not entitled to retain both his regular pay and compensation benefits, nor was he entitled to buy back that leave without compensating the Respondent for the difference between the two. Therefore, the $3,000 settlement is not enforceable under the Back Pay Act. [n2]
As the settlement agreement is not enforceable under the Back Pay Act, and as no other basis is argued permitting enforcement of the settlement agreement, the Respondent did not commit an unfair labor practice when it refused to pay the employee the $3,000 set forth in the settlement agreement. Therefore, we dismiss the complaint. [n3]
The complaint is dismissed.
Footnote # 1 for 60 FLRA No. 177 - Authority's Decision
Footnote # 2 for 60 FLRA No. 177 - Authority's Decision
Member Pope notes that the Chairman would "resolve this case based upon sovereign immunity" rather than the Back Pay Act. Concurrence at 3. In so doing, the Chairman ignores the central issue in this case. See Exceptions at 7-8. Indeed, the Respondent's sole defense in this case is that the settlement agreement violates the Back Pay Act. See id. In so doing, the Chairman also ignores that the Back Pay Act is both a waiver of sovereign immunity and the only such waiver asserted to apply. As a result, if the $3,000 payment is not authorized by the Back Pay Act, then that is the end of the matter. Thus, the Chairman both misses the point and needlessly complicates what is, in fact, a simple application of the Back Pay Act.
Footnote # 3 for 60 FLRA No. 177 - Authority's Decision