American Federation of Government Employees, Local 933 (Union) and United States Department of Veterans Affairs Medical Center, Detroit, Michigan (Agency) 

64 FLRA No. 133                                                     














April 28, 2010



Before the Authority:  Carol Waller Pope, Chairman, and

Thomas M. Beck and Ernest DuBester, Members

I.          Statement of the Case

This matter is before the Authority on exceptions to an award of Arbitrator Marilyn H. Zuckerman 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 concluded that the Agency violated the parties’ collective bargaining agreement (CBA) by finding the grievant negligent for losing, and directing her to repay, money that she lost in the course of her duties.  For the reasons that follow, we deny the Agency’s exceptions.

II.        Background and Arbitrator’s Award

The grievant is a tax resolution representative who is responsible for converting cash received from taxpayers to money orders.  One day, she mistakenly exchanged $3,000 in cash for $2,000 in money orders, and she did not recover the remaining $1,000. The Agency proposed to reprimand her for “carelessness in performance of duty for failure to safeguard funds.”  Award at 5.  In resolution of the proposed reprimand, the Agency, the Union, and the grievant entered into an alternative discipline agreement (ADA) pursuant to the CBA.  Under the ADA, the grievant acknowledged that she had been careless, and the Agency placed a letter of counseling in her discipline file.  In addition, “Agency management told [the grievant] that the matter was over[,] that she would not have to repay the money lost and . . . that the [ADA] fully resolved the matter.”  Id. 

Subsequently, the Agency notified the grievant that she had been found negligent under the definition of “negligence in the Internal Revenue Manual [IRM.]”[1]  Id. at 6.  Accordingly, the Agency provided her with a notice and demand pursuant to 26 U.S.C. § 7804(c)[2] to repay the lost money with interest.  The grievant made several payments, but did not repay the entire amount.  Id. at 6-7.


The grievant filed a grievance over the demand, which the Agency denied on the basis that the IRM, not the CBA, governed determinations of negligence.  The grievance was not resolved and was submitted to arbitration, where the parties were unable to stipulate the issues.  The Arbitrator framed the issue, in pertinent part, as “[w]hat shall be the disposition of the grievance?”[3]  Id. at 8.

The Arbitrator found that the ADA precluded the Agency from recouping the lost funds.  Id. at 25.  In the Arbitrator’s view, the ADA determined that the grievant was “careless and not negligent,” and finally resolved all issues as to the grievant’s failure to safeguard funds.  Id. at 28.  She also determined that, in finding the grievant negligent under the IRM, the Agency failed to follow the procedures required by the CBA and improperly attempted to obtain “two bites at the apple.”  Id. at 26, 29.  She further found that, under the CBA, when provisions of the IRM are in “specific conflict” with the CBA, the CBA “govern[s].”  Id. at 23-24.  For these reasons, the Arbitrator concluded that the Agency’s finding of negligence under the IRM violated the CBA.  Id. at 25.   Accordingly, she sustained the grievance and ordered the Agency to rescind the finding of negligence and “repay the [g]rievant the total amount that she was forced to repay the Agency with interest.”  Id. at 25, 31.

III.       Positions of the Parties

A.                Agency’s Exceptions

The Agency contends that the award is based on a nonfact because the Arbitrator erred in finding that the CBA governs the determination of whether the grievant was negligent.  Exceptions at 9.  In this regard, the Agency asserts that there is no provision in the CBA that discusses the recoupment of funds under § 7804(c) and the standard to be applied.  Id.  Similarly, the Agency argues that the award is contrary to U.S. Department of the Army, Blue Grass Army Depot, Lexington, Kentucky, 41 FLRA 1206 (1991) (Blue Grass Army Depot).  Specifically, the Agency claims that Blue Grass Army Depot requires that a collective bargaining agreement must address recoupment for that agreement to govern over an agency regulation, and, in this case, the CBA does not address recoupment.  Id. at 11. 

The Agency also contends that the award is contrary to the IRM.  Id at 14.  The Agency reiterates its argument that the IRM negligence standard governs over the CBA and asserts that the Arbitrator’s determination that the grievant was not negligent is contrary to the IRM standard.  Id. at 15.

B.        Union’s Opposition

The Union contends that the exceptions should be dismissed for lack of jurisdiction because the award relates to a reduction in pay, which is a matter described in § 7121(f) of the Statute over which the Authority lacks jurisdiction under § 7122(a) of the Statute.  Opp’n at 14-15.

The Union also contends that the award is based on the Arbitrator’s interpretation of the CBA and that the Agency’s disagreement with that interpretation fails to establish that the award is based on a nonfact or conflicts with Blue Grass Army DepotId.

at 7-12.  The Union further argues that, as the Arbitrator interpreted the CBA to govern over the IRM, any alleged conflict of the award with the IRM does not provide a basis for finding the award deficient.  Id. at 14.

IV.       Analysis and Conclusions

            A.        The Authority has jurisdiction to resolve the exceptions. 

            Under § 7122(a) of the Statute, the Authority lacks jurisdiction to resolve exceptions to an award “relating to a matter described in § 7121(f)” of the Statute.  5 U.S.C. § 7122(a).  As relevant here, the matters described in § 7121(f) include matters covered under 5 U.S.C. § 7512.  In turn, § 7512 covers, as relevant here, “reduction[s] in pay[.]”[4]  5 U.S.C. § 7512(4).  For purposes of § 7512, “pay” is defined as “the rate of basic pay fixed by law or adminis