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

[ v63 p70 ]

63 FLRA No. 24

NATIONAL TREASURY
EMPLOYEES UNION
(Union)

and

UNITED STATES
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C.
(Agency)

0-AR-4089

_____

DECISION

January 21, 2009

_____

Before the Authority: Thomas M. Beck, Chairman, and
Carol Waller Pope, Member

I.     Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Roger I. Abrams filed by the Union under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and Part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exceptions.

      The Arbitrator found that the Agency's use of crediting plans in merit promotion actions was not improper. For the following reasons, we deny the Union's exceptions.

II.     Background and Arbitrator's Award

      The Union filed a grievance claiming that the Agency's use of crediting plans in merit promotion actions violated the parties' agreement, statutes, and regulations. When the grievance was not resolved, it was submitted to arbitration, where the parties stipulated to the following issues for the Arbitrator to resolve: "Does the Agency's use of crediting plans violate the contract provision, statutes and regulations cited in the grievance . . . ? If so, what shall be the remedy?" Award at 2-3. [n1] 

      As relevant here, the Arbitrator found that nothing in Article 13 of the parties' agreement expressly allows or prohibits the use of crediting plans. In this regard, based on testimony and documents concerning the parties' bargaining history, the Arbitrator determined that Article 13, Section 5A. [n2]  pertains to the Agency's attempt to use "category ratings." [n3]  Award at 24-25. The Arbitrator also found that the Agency had used crediting plans since at least 1986 -- both before and after the negotiation of Article 13, Section 5A. -- and that there was no evidence to the contrary in the record about the negotiations or the origin of this sentence. Based on the record, the Arbitrator concluded that Article 13, Section 5A. did not prohibit the Agency's continued use of crediting plans. Accordingly, he found that the Agency had not violated the parties' agreement.

      As to the Union's claim that the Agency violated law or regulation in using crediting plans, the Arbitrator rejected the Union's assertion that the Agency had failed to bargain over an alleged unilateral change that had occurred at least twenty years earlier. In this regard, the Arbitrator found that, because the procedure had been in operation for so long, "[i]t would not be equitable" to sustain the claim. Id. at 28. The Arbitrator further found that the Agency's use of crediting plans is consistent with law and regulation. In this regard, the Arbitrator determined, based on the Agency's personnel psychologist's testimony, that the crediting plans were "professionally developed using experts in the job[.]" Id. at 29. He further found that the Agency "examine[s] the duties, responsibilities, knowledge, skills and abilities needed to perform each job," as required by applicable statutes and regulations. Id. at 28-29. In addition, the Arbitrator determined that there was no allegation or finding of an adverse impact on a minority group that would trigger the application of non-discrimination regulations. See id. at 29.

      Based on the foregoing, the Arbitrator denied the grievance. [ v63 p71 ]

III.     Positions of the Parties

A.     Union's Exceptions

      The Union contends that the award is contrary to 5 C.F.R. Parts 300 and 335, and the Uniform Guidelines on Employee Selection Procedures, 29 C.F.R. Part 1607 (Uniform Guidelines), because: (1) crediting plans constitute an employment practice, and all employment practices must be professionally developed and rationally related to the position to be filled; (2) the Agency did not professionally validate the crediting plans; and (3) the Agency failed to demonstrate that the crediting plans are based solely on job-related criteria as required by 5 C.F.R. § 335.103(b). [n4]  Additionally, the Union maintains that § 335.103(b)(1) requires an agency to disclose established merit promotion procedures to employees and that the Agency has never done so with respect to the crediting plans. The Union argues that, as the Agency's use of crediting plans violates the Uniform Guidelines and 5 C.F.R. §§ 300 and 335, the Agency's conduct constitutes a prohibited personnel practice and the Arbitrator's failure to address these allegations renders the award contrary to law.

      Further, the Union claims that the award is contrary to § 7116 (a)(1) and (5) of the Statute because the Agency committed unfair labor practices (ULPs) by failing to bargain in good faith prior to implementing the crediting plans. [n5]  The Union also contends that the Agency's use of crediting plans constitutes a "patent breach" of the parties' agreement, Exceptions at 28, because Article 47 sets forth the agreed-upon procedure for changing working conditions and the Agency did not comply with that procedure. [n6]  The Union claims that the Agency should have informed it of the use of creditingplans and the Agency's breach of its duty to notify the Union constitutes a ULP. According to the Union, the Arbitrator permitted this breach of the parties' agreement to continue simply because it had been ongoing for twenty years.

      The Union also asserts that the award also fails to draw its essence from the parties' agreement. In particular, the Union contends that Article 13 of the parties' agreement sets forth a detailed merit promotion procedure that does not refer to "crediting plans." Exceptions at 11. Additionally, the Union maintains that the parties agreed that Article 13 would provide the "sole and exclusive mechanism" through which bargaining unit employees could be rated, ranked, and ultimately promoted. Id. at 12. The Union argues that the Arbitrator improperly examined the bargaining history of Article 13 and considered an Agency witness' testimony regarding the meaning of that provision. The Union asserts that, to the extent that Article 13, Section 5A. is ambiguous, the ambiguity should be construed against the Agency because the Agency drafted that provision.

      Additionally, the Union also argues that the award fails to draw its essence from Article 43 of the parties' agreement. [n7]  In this connection, the Union contends that, in a previous case, the Arbitrator held that the procedures in Article 13 are "exclusive" and precluded the use of "good potential" factors to rank candidates in the merit promotion process. Id. at 17, 16. According to the Union, under Article 43, the Arbitrator was bound by that finding in the present case and should have found that the use of crediting plans here was similarly precluded. Id. at 17.

      Finally, the Union claims that the Arbitrator failed to conduct a fair hearing. In this regard, the Union asserts that it had filed a Motion to Compel Disclosure of the crediting plans, which the Arbitrator failed to address. The Union contends that the Arbitrator's failure to address its motion affected the fairness of the proceeding as a whole because the Union could not review the crediting plans and determine whether they were related to the position to be filled. [ v63 p72 ]

B.     Agency's Opposition

      The Agency contends that the award is not contrary to law. In this connection, the Agency states that it satisfied the regulatory requirements for establishing the crediting plans and that, in the absence of evidence of adverse impact on qualified applicants for vacant positions, it was not required to professionally develop its plans or to perform adverse impact studies. See Opposition at 17 (citation omitted). In response to the Union's contention that the Agency improperly failed to release crediting plans to job applicants, the Agency maintains that it was not required to do so. As for the Union's claims that the Agency violated the Statute, the Agency states that it did not violate § 7116 of the Statute or bargain in bad faith because it had been using the crediting plans since the 1980s, and the Union never sought to bargain over their use. Further, the Agency argues that its use of crediting plans could not constitute a patent breach of the parties' agreement because that agreement does not mention crediting plans.

      As for the Union's essence claim, the Agency asserts that the Arbitrator properly determined that the Agency had been using crediting plans since at least 1986 and that Article 13, Section 5A. was only intended to preclude the use of category ratings, not the use of crediting plans. As to the Union's argument that the Arbitrator should not have admitted testimony regarding the bargaining history of Article 13, Section 5A., the Agency contends that it was the Union that raised testimony regarding that history, and that § 2429.5 of the Authority's Regulations precludes the Union from making this argument because the Union did not object to the admission of this testimony at the hearing. [n8] 

      In response to the Union's argument regarding a previous arbitration, the Agency asserts that the previous arbitration never considered the use of crediting plans and, thus, was not binding on the Arbitrator under Article 43 of the parties' agreement.

      Finally, the Agency argues that the Union's fair hearing claim is raised for the first time on exceptions and, therefore, is not properly before the Authority pursuant to § 2429.5 of the Authority's Regulations. In particular, the Agency claims that, before the hearing closed, the Arbitrator asked the Union whether it needed to resolve the question of whether the crediting plans must be disclosed to the Union and the Union answered "no" to that question. Opposition at 27 (citing Tr. at 92-93). The Agency further asserts that the Union did not raise its fair hearing claim in its post-hearing brief to the Arbitrator.

IV.     Analysis and Conclusions

A.     The award is not contrary to law and regulation.

      When an exception challenges an award's consistency with law, the Authority reviews the question of law raised by the exception and the arbitrator's award de novo. See NTEU, Chapter 24, 50 FLRA 330 332 (1995) (citing United States Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir 1994)). In applying a standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. See NFFE, Local 1437, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings.

1.     5 C.F.R. Part 300

      Generally, 5 C.F.R. Part 300 governs the employment practices of the Federal Government and of individual agencies affecting the recruitment, measurement, ranking, and selection of individuals for initial appointment and competitive promotion. The Union contends that these regulations require that a crediting plan be professionally developed and rationally related to the position to be filled. In applying this regulation, the Arbitrator relied on the unrefuted testimony of the Agency's personnel psychologist and other witnesses, as well as the parties' bargaining history, and made factual findings that the Agency's crediting plans had been professionally developed and that they were rationally related to the position to be filled. See Award at 28-29. In this regard, the Arbitrator found that the crediting plans were "professionally developed using experts in the job[.]" Id. at 29. He further found that the Agency "examine[s] the duties, responsibilities, knowledge, skills and abilities needed to perform each job," as required by applicable statutes and regulations. Id. at 28-29.

      The Union has not filed an exception challenging the Arbitrator's factual findings. Accordingly, in applying a standard of de novo review, the Authority defers to the Arbitrator's factual findings that the crediting plans were professionally developed, rationally related to the position to be filled, and based solely on job-related criteria. See NFFE, Local 1437, 53 FLRA at 1710. Consistent with these findings, we have no basis on which to conclude that the crediting plans fail to meet the requirements of Part 300. Accordingly, we deny this exception. [ v63 p73 ]

2.     The Uniform Guidelines, 29 C.F.R. Part 1607

      As relevant here, the Uniform Guidelines, 29 C.F.R. Part 1607, require that federal agencies "validate[]" crediting plans that have an adverse impact on any race, sex, or ethnic group. NTEU, 61 FLRA 618, 623 (2006) (quoting 29 C.F.R. § 1607.3A.). [n9]  Acceptable types of validity studies include "criterion-related validity studies, content validity studies or construct validity studies . . . ." 29 C.F.R. § 1607.5A. The Uniform Guidelines "do not require a user to conduct validity studies of selection procedures where no adverse impact results." 29 C.F.R. § 1607.1B. Applying these regulations, the Arbitrator determined that the crediting plans were properly validated and that there was no "allegation or finding of adverse impact on a minority group" that would have triggered application of the Uniform Guidelines. Award at 29. In particular, the Arbitrator found that the Agency examines the duties, responsibilities, knowledge, skills and abilities needed to perform each job. Additionally, the studies are professionally developed and have "content validity[.]" See id.

      The Union has not filed an exception challenging the Arbitrator's factual findings. Accordingly, upon de novo review, we defer to the Arbitrator's factual findings that, in the absence of an allegation or showing of adverse impact on a minority group, the crediting plans were properly validated. Consistent with these findings, we have no basis on which to conclude that the crediting plans fail to meet the requirements of the Uniform Guidelines. We note, in this regard, that the Uniform Guidelines do not apply by their terms "where no adverse impact results." 29 C.F.R. § 1607.1.B. In these circumstances, the Union has not demonstrated that the award is contrary to the Uniform Guidelines and we deny this exception.

3.     5 C.F.R. Part 335

      5 C.F.R. Part 335 requires an agency to demonstrate that the crediting plans are based solely on job-related criteria. See, e.g., 5 C.F.R. § 335.103(b) ("Actions under a promotion plan . . . shall be based solely on job-related criteria."). In his award, the Arbitrator found that the Agency examines the duties, responsibilities, knowledge, skills, and abilities needed to perform each job, as required. See Award at 28-29.

      The Union has not filed an exception challenging the Arbitrator's factual findings. Upon de novo review, we defer to the Arbitrator's factual findings that the Agency's crediting plans are based on job-related criteria. Consistent with these findings, we have no basis on which to conclude that the crediting plans fail to meet the requirements of 5 C.F.R. Part 335. Accordingly, we deny this exception.

4.     5 U.S.C. § 7116

      The Union also asserts that the award violates § 7116(a)(1) and (5) of the Statute because the Agency refused to negotiate over the use of crediting plans and implemented their use without bargaining with the Union. However, the Arbitrator found the record "devoid of any evidence that the Agency made any changes regarding crediting plans during the term of the Agreement or any of the agreements going back at least to 1986." Award at 27. According to the Arbitrator, the Union is "complaining about a failure to bargain about an alleged unilateral change that occurred at least two decades ago." Id. In these circumstances, the Arbitrator concluded that the Agency had no duty to bargain because it had not changed the way it used crediting plans in many years and that, as a result, it would "not be equitable to allow this statutory claim[.]" Id. at 28.

      Though the Union claims that the Agency unilaterally implemented a change requiring bargaining, it does not dispute the Arbitrator's finding that any such change occurred over twenty years ago. The Union also provides no support for concluding that in these circumstances, the Arbitrator erred as a matter of law in refusing to find a violation of § 7116(a)(1) and (5). In this regard, the Union's reliance on United States Air Force, Air Force Logistics Command, Aerospace Guidance & Metrology Center, Newark, Ohio, 4 FLRA 512 (1980), is misplaced. The issue in that case was whether a union representative's attendance at a meeting where a change in conditions of employment was announced constituted sufficient notice to the union. See id. at 513. Here, by contrast, the issue is whether the Arbitrator erred in refusing to find an unfair labor practice where no change has occurred for over twenty years.

      [ v63 p74 ] Based on the foregoing, we find that the Union has failed to demonstrate that the award is contrary to the Statute and we deny this exception.

      As to the Union's contention that the Agency repudiated the parties' agreement, the Arbitrator found that there had been no breach of the parties' agreement. A necessary element of an unlawful repudiation is a clear and patent breach of an agreement. See, e.g., NAGE, Local R3-32, 61 FLRA 127, 131 (2005). Consistent with our finding below that the award does not fail to draw its essence from the agreement, the award finding no breach of the parties' agreement compels a conclusion that there was no repudiation. Accordingly, the Union has failed to demonstrate that the award is contrary to the Statute and we deny this exception.

B.     The award does not fail to draw its essence from the parties' agreement.

      To demonstrate that an award fails to draw its essence from a collective bargaining agreement, a party must show that the award: (1) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; or (2) does not represent a plausible interpretation of the agreement; or (3) cannot in any rational way be derived from the agreement; or (4) evidences a manifest disregard of the agreement. See United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990).

      As an initial matter, the Union argues that the Arbitrator improperly examined the bargaining history of Article 13 and considered witness testimony regarding the meaning of that provision. Under § 2429.5 of the Authority's Regulations, arguments that could have been raised to the Arbitrator, but were not, may not be raised for the first time in proceedings before the Authority. In this case, the Agency's claim that the Union did not raise this argument before the Arbitrator or in its closing brief is supported by the record. Accordingly, as the Union did not raise, but could have raised, this argument before the Arbitrator, we find that § 2429.5 bars the Union's argument[n10]  Therefore, we dismiss this exception. [n11] 

      Article 13, Section 5A. of the parties' agreement provides that Article 13 is to be the "exclusive merit promotion procedure." Exceptions, Attach. 4 at 46. As discussed above, the Arbitrator found that this provision relates only to the use of category ratings and does not apply to crediting plans. In so finding, he relied on the fact that nothing in the Article precludes the Agency from using crediting plans in a merit promotion action and the parties' practice under their agreement, specifically the fact that crediting plans had been in place since 1986. The Union has not demonstrated that, based on the Arbitrator's interpretation of the parties' agreement, the award is unfounded, implausible, irrational, or in manifest disregard of that agreement. Accordingly, the Union has not demonstrated that the award fails to draw its essence from Article 13 of the parties' agreement and we deny this exception.

      Article 43, Section 4 A.8. provides that "[t]he arbitrator's decision shall be final, binding and, except for expedited or streamlined awards, precedential . . . ." Exceptions, Attach. 4 at 123. As discussed above, the Union claims that the award fails to draw its essence from this provision because the Arbitrator failed to follow his decision in a previous case here. In the previous case, the Arbitrator held that Article 13 precluded the Agency from instituting a new step in the promotion process (i.e., the use of "good potential" factors) following the implementation of Article 13. Id. (citation omitted). Here, the Arbitrator found that crediting plans had been in use before and after Article 13 was negotiated, and, as such, their use was not precluded by Article 13. Thus, the Union has not demonstrated that, based on the Arbitrator's interpretation of the parties' agreement, the award is unfounded, implausible, irrational, or in manifest disregard of that agreement. Accordingly, we find that the Union has not demonstrated that the award fails to draw its essence from Article 43 of the parties' agreement and deny the exception.

C.     The Union was not denied a fair hearing.

      An award will be found deficient on the ground that an arbitrator failed to provide a fair hearing where a party demonstrates that the arbitrator refused to hear or consider pertinent and material evidence, or that other actions in conducting the proceeding so prejudiced a party as to affect the fairness of the proceeding as a whole. See AFGE, Local 1668, 50 FLRA 124, 126 (1995); United States Dep't of the Air Force, Hill Air Force Base, Utah, 39 FLRA 103, 105-07 (1991).

      [ v63 p75 ] At the close of the hearing, the Union indicated that the crediting plan information was not needed until the remedy portion of the proceedings. See Award at 2, 29 n.12. Thus, before the Arbitrator, the Union effectively conceded that it was unnecessary for the Arbitrator to rule on its Motion to Compel Disclosure unless a violation was found. In these circumstances, as no violation was found, and as we have upheld the Arbitrator's award, no remedy is available to the Union. Accordingly, the Union has not established that the Arbitrator failed to provide a fair hearing by failing to compel disclosure of the crediting plans. Consequently, we deny this exception.

V.     Decision

      The exceptions are denied.



Footnote # 1 for 63 FLRA No. 24 - Authority's Decision

   In resolving these issues, the Arbitrator adopted the Union's definition of "crediting plan" as "a measurement device that consists of a set of evaluation criteria which reflects the specific knowledges, skills, abilities, and other characteristics deemed necessary for the successful performance of a particular job." Award at 5.


Footnote # 2 for 63 FLRA No. 24 - Authority's Decision

   Article 13, Section 5A. of the parties' agreement provides: "No other procedures will be used to rate and rank bargaining unit employees for bargaining unit positions unless the [Agency] has made the details, criteria, and other characteristics of the process fully known to the Union in advance, in accordance with Article 47." Award at 3 (citing Attach. 4 at 46).


Footnote # 3 for 63 FLRA No. 24 - Authority's Decision

   The record does not define the term "category ratings."


Footnote # 4 for 63 FLRA No. 24 - Authority's Decision

   Title 5, Part 300 addresses employment, generally, and Part 335 addresses promotion and internal placement. As relevant here, 5 C.F.R. § 335.103(b)(1) provides that "[e]ach agency must establish procedures for promoting employees which are based on merit . . . . Actions under a promotion plan . . . shall be based solely on job-related criteria." Title 29, Part 1607 sets forth the Uniform Guidelines.


Footnote # 5 for 63 FLRA No. 24 - Authority's Decision

   5 U.S.C. § 7116(a)(1) and (5) provide:

(a) For the purpose of this chapter, it shall be an unfair labor practice for an agency--
     (1) to interfere with, restrain, or coerce any employee in the exercise by the employee of any right under this chapter;
. . . .
     (5) to refuse to consult or negotiate in good faith with a labor organization as required by this chapter[.]

Footnote # 6 for 63 FLRA No. 24 - Authority's Decision

   As relevant here, Article 47, Section 2 of the parties' agreement provides for quarterly notice to the Union of proposed changes, requests by the Union for briefing or negotiation, and the commencement of bargaining within 15 days. See Exceptions, Attach. 4 at 130.


Footnote # 7 for 63 FLRA No. 24 - Authority's Decision

   As relevant here, Article 43, Section 4 A.8. provides that "[t]he arbitrator's decision shall be final, binding and, except for expedited or streamlined awards, precedential . . . ." Exceptions, Attach. 4 at 123.


Footnote # 8 for 63 FLRA No. 24 - Authority's Decision

   Section 2429.5 of the Authority's Regulations provides that "[t]he Authority will not consider evidence offered by a party, or any issue, which was not presented in the proceedings before the . . . arbitrator."


Footnote # 9 for 63 FLRA No. 24 - Authority's Decision

   The Uniform Guidelines further provide that if an agency's records demonstrate "that the total selection process for a job has an adverse impact, the individual components of the selection process should be evaluated for adverse impact." NTEU, 61 FLRA at 623 (quoting 29 C.F.R. § 1607.4C). However, if the records demonstrate "that the total selection process does not have an adverse impact, the Federal enforcement agencies, in the exercise of their administrative and prosecutorial discretion, in usual circumstances, will not expect a user to evaluate the individual components for adverse impact, or to validate such individual components, and will not take enforcement action based upon adverse imp