[ v62 p4 ]
62 FLRA No. 2
UNITED STATES
DEPARTMENT OF THE NAVY
PUGET SOUND NAVAL SHIPYARD AND
INTERMEDIATE MAINTENANCE FACILITY
BREMERTON, WASHINGTON
(Agency)
and
BREMERTON METAL TRADES COUNCIL
IBEW, LOCAL 574
(Union)
0-AR-3998
_____
DECISION
January 25, 2007
_____
Before the Authority: Dale Cabaniss, Chairman, and
Wayne C. Beyer, Member
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator James E. Sass 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 did not file an opposition to the Agency's exceptions.
The Arbitrator determined that the Agency had violated the parties' collective bargaining agreement when it denied the grievant the opportunity to work overtime. As a remedy, the Arbitrator awarded the grievant backpay. For the following reasons, we deny, in part, and dismiss, in part, the Agency's exceptions.
II. Background and Arbitrator's Award
The grievant filed a grievance when she volunteered to work overtime for shop 06 on the weekend of May 15-16, 2004, but was not considered or selected for the assignment. The Arbitrator determined that the Agency violated Article 8 of the parties' collective bargaining agreement. [n1] The Arbitrator ruled that the grievant should have been considered for the overtime assignment because he found that for purposes of distribution of overtime under Article 8, the grievant was part of shop 06 even though she was temporarily assigned to a functional work group at the time of the overtime assignment. The Arbitrator rejected the shop 06 supervisor's testimony that because he did not have supervisory authority over employees temporarily assigned to work groups, he did not consider them to be part of shop 06. Applying the selection procedures of Article 8, the Arbitrator concluded that the grievant should have been selected for the overtime assignment because she had worked "far fewer overtime hours" than most of the employees selected for the assignment. Award at 9.
The Arbitrator rejected the Agency's argument that the assignment of overtime was within the exclusive authority and control of management under § 7106(a)(2)(B) of the Statute. He found, as set forth in Article 8, that it is clear that management has the right to determine qualifications required to meet overtime requirements and to identify the employees who meet those requirements. However, he noted that procedures management would observe in exercising its rights under § 7106(a) were negotiable and enforceable under the Statute and that the parties had negotiated procedures related to the assignment of overtime work.
The Arbitrator also rejected the Agency's argument that the use of the word "annually" in Article 8 means that there is no requirement to consider the number of year-to-date overtime hours worked by volunteers for overtime assignments in selecting employees for the assignment. The Arbitrator quoted the following language of Article 8, Section b: "Work assignments will be made, to the extent practicable, toward the fair and equitable distribution of overtime." Id. To the Arbitrator, this language meant that the Agency must consider equitable distribution at each assignment because otherwise "there is simply no way to assure fair and equitable distribution on an annual basis . . . ." Id. at 9-10.
As a remedy, the Arbitrator awarded the grievant backpay under the Back Pay Act, 5 U.S.C. § 5596, in the amount of 20 hours of overtime pay. He ruled that the grievant had suffered an unjustified or unwarranted personnel action when she was denied the opportunity to work overtime and that the unwarranted action had resulted in a loss of pay to the grievant that she otherwise would have earned. He noted that an award of backpay was consistent with the grievant's entitlement under § 5596(b)(1)(A)(i) to receive, on correction of the personnel action, an amount equal to the pay she would have earned during the period, if the personnel action had not occurred. He rejected the Agency's argument that the remedy should be to allow the grievant an opportunity to work overtime in the future. [ v62 p5 ]
III. Exceptions
The Agency contends that the award is contrary to law and regulation. The Agency argues that the award is contrary to management's right to determine its organization under § 7106(a)(1) and to assign work under § 7106(a)(2)(B) and that the remedy of backpay is contrary to regulations on overtime pay.
The Agency asserts that the award is contrary to § 7106(a)(2)(B) because it excessively interferes with management's right to assign work by interpreting Article 8 to require management to evenly distribute all overtime assignments as they are made. The Agency claims that the award is deficient by eliminating management's right to level the work assignments on an annual basis as explicitly set forth in Article 8.
The Agency asserts that the award is contrary to § 7106(a)(1) because it excessively interferes with management's right to determine its organization by rejecting management's determination of how to organize itself between trade shops, projects, and functional work groups. The Agency maintains that the management policy of shop 06 is that an employee assigned to a functional work group is not part of shop 06 for purposes of volunteering for overtime and that the award is deficient by overruling that policy.
In contending that the remedy of backpay is deficient, the Agency concedes that "this kind of application of the Back Pay Act by [a]rbitrators has been approved in earlier FLRA decisions[,]" but requests that the Authority take a "fresh look" at the Back Pay Act and rule that the Back Pay Act does not authorize payment for overtime that was not actually worked because such payment is inconsistent with overtime regulations. Exceptions at 8-9. More specifically, the Agency makes the following argument:
Federal employee pay regulations, as well as the Fair Labor Standards Act, all require that an employee actually work the hours for which he or she is being paid. All exceptions, such as annual and sick leave, are specifically enumerated by regulation. No agency has the authority to pay an employee for hours not worked, unless one of the exceptions is met. There are no exceptions for missed work opportunities.
Id. at 9 n.9.
In addition, the Agency argues that this is not the usual backpay case because the remedy of backpay is "[n]ot required." Id. at 9. The Agency claims that in numerous cases where employees were denied the opportunity to work overtime, arbitrators have awarded the employees the next available overtime opportunity or some other non-monetary remedy and that in AFGE Local 916, 57 FLRA 715 (2002), the Authority held that there is nothing in the Back Pay Act that requires a monetary award for every unjustified or unwarranted personnel action. The Agency also argues that the remedy of backpay is "[u]nnecessary to make the employee whole." Id. at 10. The Agency claims that as pointed out by many arbitrators, the remedy of backpay is a "windfall." Id. at 10 n.11. In the Agency's view, "[a] true `make whole' remedy is to provide the employee who missed out on an opportunity to work overtime with an equal or greater amount of overtime work in such a way that it provides the employee work hours that he or she would not otherwise received." Id. In addition, the Agency suggests that the violation of Article 8 does not constitute an unjustified or unwarranted personnel action within the meaning of the Back Pay Act because Article 8 does not specifically mandate payment to employees for hours they did not work.
In sum, the Agency asserts that "the Authority must decide if the general, non-directive authority of the Back Pay Act, which allows--but does not require--backpay for contract violations, supersedes a specific government-wide regulation that does require an employee to actually work the hours for which he or she is being paid." Id. at 14 (emphasis original). In deciding this, the Agency argues that the Authority needs to consider taxpayers who are being asked to pay twice for overtime. In the Agency's view, this cannot be what Congress intended.
IV. Analysis and Conclusions
A. The award is not contrary to management's right to assign work under § 7106(a)(2)(B).
The Agency argues that the award excessively interferes with management's right to assign work by requiring management to evenly distribute all overtime assignments as they are made. We review questions of law raised by exceptions to an arbitrator's award de novo. See, e.g., NFFE Local 1437, 53 FLRA 1703, 1709 (1998). In applying a standard of de novo review, we determine whether the arbitrator's legal conclusions are consistent with the applicable standard of law. In making that determination, we defer to the arbitrator's underlying finds of fact. See id. at 1710.
In resolving whether an arbitrator's award is contrary to a management right under § 7106(a) of the Statute, we first examine whether the award affects the exercise of the right. See, e.g., AFGE Local 1441, [ v62 p6 ] 61 FLRA 201, 205 (2005). If the award affects the exercise of a management right, we apply the two-prong test established in United States Dep't of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 53 FLRA 146 (1997) (BEP) to determine whether the award is deficient. See id. In terms of this case, under prong I of BEP, we examine whether the award provides a remedy for a violation of a contract provision negotiated pursuant to § 7106(b). See id. Under prong II, we examine whether the remedy reflects a reconstruction of what management would have done if management had not violated the contract provision. See id.
An award requiring an agency to adhere to objective criteria in assigning overtime affects management's right to assign work under § 7106(a)(2)(B) of the Statute. See, e.g., United States Dep't of the Navy, Naval Surface Warfare Ctr., Indian Head, Md., 55 FLRA 596, 599 (1999) (Warfare Ctr.). Consequently, BEP must be applied to determine whether the award is deficient.
Under prong I, we examine whether the award provides a remedy for the violation of a contract provision negotiated pursuant to § 7106(b) of the Statute. Article 8 of the parties' collective bargaining agreement is similar to the contract provision in Warfare Ctr. that the Authority determined was negotiated pursuant to § 7106(b)(2) of the Statute. Both provisions require that management must distribute overtime work fairly and equitably and that management must "`keep score' of who has been offered overtime and when." Id. at 600. The Authority advised in Warfare Ctr. that to constitute a procedure within the meaning of § 7106(b)(2), the enforcement of the contract provision must permit management to determine who is and who is not qualified to do the overtime work that is needed. See id. In this case, the Arbitrator interpreted Article 8 to allow management to determine who is qualified prior to assigning overtime, and there is no question that management had determined that the grievant possessed the necessary qualifications to perform the disputed work. Accordingly, prong I is satisfied. See id. (because the arbitrator had interpreted the contract provision to allow management to determine who is qualified prior to awarding overtime work, prong I was satisfied).
In NLRB, Washington, D.C., 61 FLRA 154, 161 (2005) (Member Armendariz dissenting as to other matters), the Authority ruled that because the award satisfied prong I of BEP and because "the [a]gency does not otherwise argue that the award violates prong II of BEP, the award is not contrary to law." Similarly, in United States Dep't of Justice, Fed. Bureau of Prisons, Fed. Transfer Ctr., Oklahoma City, Okla., 57 FLRA 158, 160 (2001) (Chairman Cabaniss dissenting as to other matters), the Authority ruled that "[t]he [a]gency does not argue that the award fails to satisfy prong II of BEP. Consequently, we do not address prong II." In this case, the Agency does not argue that the award fails to satisfy prong II. Consequently, we do not address prong II, and we deny the Agency's exception because the award is not contrary to § 7106(a)(2)(B) of the Statute. [n2]
B. The Agency's § 7106(a)(1) exception is barred.
The Agency contends that the award is contrary to management's right to determine its organization under § 7106(a)(1) by rejecting the management policy of shop 06 that an employee assigned to a work group is not part of shop 06 for purposes of volunteering for overtime under Article 8 of the parties' collective bargaining agreement.
Section 2429.5 of the Authority's Regulations bars Authority consideration of any issue that could have been, but was not, presented to the arbitrator. See, e.g., AFGE Local 1546, 59 FLRA 126, 128 (2003). There is no indication in the record that the Agency argued to the Arbitrator that to permit the grievant to be considered for the overtime assignment while temporarily assigned to a work group would implicate management's right to determine its organization within the meaning of § 7106(a)(1). Clearly, this argument could have been presented to the Arbitrator. Instead, the extent of the Agency's argument was that the grievant was not considered because the shop 06 supervisor did not have supervisory authority over her. The lack of citation to § 7106(a)(1) or argument in terms of agency organization is in contrast to the Agency's approach to the control over overtime assignments where the Agency specifically cited § 7106(a)(2)(B) and made assignment-of-work arguments to the Arbitrator.
As the issue should have been, but was not, raised to the Arbitrator, the exception is barred by § 2429.5, and we dismiss the exception. See id.; see also United [ v62 p7 ] States Dep't of Transportation, Fed. Aviation Admin., 60 FLRA 159, 164 n.5 (2004) (concurring opinion of Chairman Cabaniss) (the agency's argument based on management's right to determine its organization could, and should, have been presented to the arbitrator).
C. The award is not contrary to regulation.
In contending that the backpay remedy is deficient, the Agency concedes that "this kind of application of the Back Pay Act by [a]rbitrators has been approved in earlier FLRA decisions[.]" Exceptions at 8-9. Nevertheless, the Agency requests that the Authority take a "fresh look" at the Back Pay Act and rule that the Act does not authorize payment for overtime that was not actually worked because such payment is inconsistent with overtime regulations. Id. at 9. [n3] In addition, the Agency argues that this is not the usual backpay case because the remedy of backpay is "[n]ot required" and is "[u]nnecessary to make the employee whole[.]" Id. at 9-10. The Agency also notes that the Authority has held that there is nothing in the Back Pay Act that requires a monetary remedy for every unjustified or unwarranted personnel action. See id. at 9 n.10 (citing AFGE Local 916, 57 FLRA 715 (2002)). Finally, the Agency suggests that the violation of Article 8 is not an unjustified or unwarranted personnel action because Article 8 does not mandate payment to employees for hours they did not work. For the reasons that follow, we deny the Agency's exception.
The Agency is correct in conceding that its arguments have been rejected by the Authority. For example, in FEMTC, 39 FLRA 3, 9 (1991), the Authority explicitly rejected "the [a]gency's contention that the award is contrary to 5 U.S.C. §§ 5542(a) and 5544(a) by ordering backpay for overtime not worked." The Authority explained that it had previously "found awards of overtime compensation to be warranted in cases where employees did not actually perform overtime work." Id. (citations omitted). The Authority emphasized that
[i]n each of those cases, the fact that employees did not actually work overtime did not render a remedy of overtime compensation unlawful. Rather, the employees would have worked overtime had the agency not engaged in improper conduct and, therefore, they suffered the loss of pay because of that conduct. Where it is established that employees are entitled to overtime under collective bargaining agreements and do not receive that overtime because of a violation of the agreement by the agency, those employees can be found to be entitled to compensation for the lost overtime.
Id. at 9-10.
In IAMAW Lodge 2261, 47 FLRA 427, 436 (1993), the Authority reiterated that "the fact that employees did not actually work overtime did not render a remedy of overtime compensation unlawful." The Authority explained that the remedy was not unlawful "because the employees would have worked the overtime had the agency not engaged in improper conduct and, therefore, the employees suffered a loss of pay because of that conduct." Id. Accordingly, the Authority explicitly ruled that there was "no basis on which to conclude that the award of overtime pay is inconsistent with 5 C.F.R. §§ 550.111 and 551.501." Id. In United States Dep't of the Navy, Supervisor of Shipbuilding Conversion and Repair, Pascagoula, Miss., 57 FLRA 744, 746-47 (2002), the Authority viewed it "well-settled that an employee may be awarded overtime compensation for overtime hours that were not worked because of a violation of a contract." See also Soc. Sec. Admin., Baltimore, Md., 57 FLRA 538, 542 (2001) (citing approvingly 54 Comp. Gen. 1071 (1975), in which the Comptroller General confirmed that the "no work, no pay" rule no longer applies to preclude an award of backpay to remedy the violation of a mandatory provision in a collective bargaining agreement that causes an employee to lose pay).
In view of the repeated reaffirmation that the Back Pay Act permits compensation to remedy the loss of overtime pay resulting from an unwarranted denial of the opportunity to work, we decline the Agency's invitation to take a "fresh look" at the Back Pay Act. In addition, the Agency's reliance on AFGE Local 916, and the proposition that there is nothing in the Back Pay Act that requires a monetary remedy for every unjustified or unwarranted personnel action, is misplaced.
The Agency is correct that in AFGE Local 916, the Authority did generally note that "[t]here is nothing in the Back Pay Act that requires a monetary award for every unjustified or unwarranted personnel action." 57 FLRA at 717 n.7. However, what the Agency overlooks is that the Authority ruled that the arbitrator's denial of backpay was not contrary to the Act because the arbitrator "found that the [u]nion failed to offer any proof that the grievant `actually suffered a monetary loss.'" Id. at 717. Consequently, the Act's requirement of a causal connection was not satisfied, and there could be no award of backpay under the Act. [ v62 p8 ]
The Authority also noted in AFGE Local 916 that the union's exception touched upon the arbitrator's chosen remedy for a contract violation and that the Authority's consistent practice is to grant arbitrators great latitude in fashioning remedies. With the Agency conceding that the Back Pay Act allows the remedy of backpay, the Agency's argument is nothing more than disagreement with the Arbitrator's choice of remedy and an attempt to have make-up overtime substituted for the Arbitrator's chosen remedy of backpay. Such disagreement provides no basis for finding an award deficient. See id.
Moreover, in our view, NTEU Chapter 98, 60 FLRA 448 (2004) (Chairman Cabaniss dissenting), likewise offers no support to the Agency. As in AFGE Local 916, the arbitrator in NTEU Chapter 98 determined that the agency violated the collective bargaining agreement when it denied certain employees the opportunity to work overtime, but also determined that the union failed to sustain its burden that backpay was the appropriate remedy. In concluding that the arbitrator's denial of backpay was not deficient, the majority emphasized, as it had in AFGE Local 916, that because the arbitrator did not find that the violation of the collective bargaining agreement had resulted in a loss of pay, the denial of backpay was not contrary to the Back Pay Act. [n4]
What the Agency overlooks in relying on AFGE Local 916 is that the expression of the view that arbitrators are not required to automatically award backpay has involved cases in which arbitrators failed or refused to award backpay and unions filed exceptions contending that an award of backpay was mandated under the Back Pay Act. None of the cases involved the circumstances of this case: an award of backpay by the Arbitrator who made all of the requisite findings under the Back Pay with the Agency contending in exceptions that backpay was not required. In addition, rejection of the Agency's position is consistent with Authority precedent quoting the Back Pay Act as entitling an employee, on correction of the personnel action, to receive, for the period during which the personnel action was in effect, "an amount equal to all or any part of the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred . . . ." See, e.g., United States Dep't of the Navy, Naval Air Depot, Cherry Point, N.C., 61 FLRA 38, 40 (2005) (quoting § 5596(b)(1)(A)(i)).
Finally, the Agency's argument that the violation of Article 8 does not constitute an unjustified or unwarranted personnel action within the meaning of the Back Pay Act because it does not mandate payment to employees for hours they did not work provides no basis for finding the award deficient. As the Authority has repeatedly held, a violation of a collective bargaining agreement constitutes an unjustified or unwarranted personnel action under the Act. See, e.g., NLRB, Washington, D.C., 61 FLRA at 162 (Member Armendariz dissenting on other grounds).
V. Decision
The exceptions are denied, in part, and dismissed, in part. [ v62 p9 ]
Appendix
Article 8 of the parties' collective bargaining agreement pertinently provides:
801. Policy
Assignments to overtime shall be distributed as fairly and equitably as practicable annually under the following conditions:
a. In order to effectively and efficiently accomplish the tasks of the shipyard, the employer shall determine the numbers, job ratings, and qualifications required to meet its overtime requirements, and identify the employees who meet those requirements.
b. However, in the interest of equitable distribution, employee morale, job continuity and economy of operations, when making overtime assignments, first selection may be made from those employees currently assigned to the job on that shift. Selection shall next be made from those employees assigned to the crew, then project, then the applicable shop volunteer overtime list. Under this article, equitable shall be defined as each employee having the same opportunity to have worked the overtime and then distributed among the employees in question. Work assignments will be made, to the extent practicable, toward the fair and equitable distribution of overtime. It is the intention of both parties that nonselection shall be a rare occurrence and must be substantiated and communicated to the employee on request. It is the intent of the parties to reduce such imbalances to the extent practicable consistent with the provisions of this article.
Award at 5-6.
Footnote # 1 for 62 FLRA No. 2 - Authority's Decision
The relevant provisions of Article 8 are set forth in an appendix to this decision.
Footnote # 2 for 62 FLRA No. 2 - Authority's Decision
In contending that the award is contrary to law, the Agency argues that the award eliminates "management's right to level work assignments on an annual basis as explicitly set forth in the agreement." Exception at 6. However, this challenges the Arbitrator's interpretation and application of Article 8 and not whether the award conflicts with § 7106(a)(2)(B). Consequently, the argument provides no basis for finding the award contrary to § 7106(a)(2)(B). See, e.g., United States Dep't of Justice, Fed. Bur. of Prisons, Fed. Transfer Ctr., Oklahoma City, Okla., 58 FLRA 109, 110 (2002) (Chairman Cabaniss and Member Armendariz concurring; Member Pope concurring as to result) (in conducting a contrary-to-law analysis, the Authority examines the provision of the agreement "as interpreted and applied by the arbitrator").
Footnote # 3 for 62 FLRA No. 2 - Authority's Decision
In footnotes, the Agency cites to provisions in 5 C.F.R. parts 550 and 551.
Footnote # 4 for 62 FLRA No. 2 - Authority's Decision
The Authority also discussed the meaning of decisions in which the Federal Circuit had determined that arbitrators are authorized to deny backpay when they mitigate disciplinary actions, but find fault on the part of the employee. The majority concluded, as follows:
In the present case, involving an alleged lost opportunity to work overtime rather than a disciplinary action, it is unclear whether or how the Federal Circuit's reasoning would apply. Nevertheless, as set forth above, the [a]rbitrator in th[is] case now before us found that the [u]ion failed to sustain its burden of establishing that backpay was a required remedy. Thus, we leave for another day, in a case where the issue is presented and addressed, the question whether the Authority should reconsider its precedent on this point.
60 FLRA at 451 (discussing AFGE Local 2718 v. Dep't of Justice, 768 F.2d 348 (Fed. Cir. 1985) and Ollett v. Dep't of the Air Force, 253 F.3d 692 (Fed. Cir. 2001)).