U.S. Federal Labor Relations Authority

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United States of America


In the Matter of






Case No. 93 FSIP 168



    The Department of the Treasury, Internal Revenue Service, Washington, D.C. (Employer or IRS) filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119, between it and the National Treasury Employees Union (Union).

    After investigation of the request for assistance, the Panel determined that the impasse should be resolved through an informal conference between a Panel representative and the parties. If no settlement were reached, the Panel representative was to notify the Panel of the status of the dispute; the notification would include the final offers of the parties and the representative's recommendations for resolving the matter. Following consideration of this information, the Panel would take whatever action it deemed appropriate to resolve the impasse, including the issuance of a binding decision.

    Pursuant to the Panel's determination, Panel Member N. Victor Goodman met with the parties on August 23, 1993, at the Panel's offices in Washington, D.C. At that meeting, the parties were unable to reach agreement on the outstanding issues. Member Goodman has reported to the Panel, and it has now considered the entire record.


    The Employer's mission is to administer the Federal tax laws. The Union represents approximately 110,000 employees in 2 separate bargaining units who work in a variety of administrative and clerical positions. The parties have entered into two separate collective-bargaining agreements (NORD III and NCA III) which are due to expire in November 1993. Impasse was reached following negotiations over the implementation of the Employer's proposed Managers' Guide to Penalty Determinations (Guide). In this regard, the IRS Office of Ethics and Business Conduct prepared the Employer's proposed Guide in response to allegations by the Union that there have been inconsistencies within the agency in administering conduct-related discipline.


    In essence, the parties disagree over the following principles: (1) whether the Guide should be implemented as a pilot program in select offices or on a nationwide basis; (2) the length of the pilot program; (3) what the Guide should contain in the way of stated objectives; (4) how the Guide's effectiveness should be assessed; (5) whether the Guide should be rescinded if it does not accomplish the stated objective; and (6) the amount of official time employees should have to review the Guide.


1. The Employer's Position

    The Employer proposes the following:

1. The Managers' Guide to Penalty Determinations (Guide) will automatically expire 36 months after the date of its issuance unless the Employer reissues it or disseminates a modified Guide before that time. The Guide will state that the Employer's goal in establishing it is to enhance the consistent treatment of employees in the disciplinary process and to emphasize to employees what the consequences of misconduct will be.

2. No earlier than 24 months after the Guide has been issued, the Employer will collect and assess data concerning disciplinary and adverse actions effected since the issuance of the Guide and will solicit the views of the Union regarding the Guide and its application. The Employer will determine the impact the Guide has had and whether the Guide is in need of revision.

3. The Guide will state that it is intended to assist managers in determining appropriate discipline and does not require that specific discipline be imposed in response to a particular incidence of misconduct.

4. The Guide will also contain a statement that, with respect to bargaining unit employees, the provisions of Articles 38 (Disciplinary Actions) and 39 (Adverse Actions) in NORD III and NCA III continue to apply.

5. A copy of the Guide will be distributed to all IRS bargaining unit employees. The Employer will allow each employee 20 minutes official time to review the Guide.

6. When assessing the effect of the Guide, the Employer will use the ALERTS system to review all disciplinary actions taken in the 24 month period following issuance of the Guide. The Employer will give special attention to disciplinary actions which do not conform to the Guide and will focus on the type of misconduct and the involved employee's position/grade. Inadequate ALERTS data will be supplemented by information from the employing office. If the number of disciplinary actions which are not in conformance with the Guide with respect to any key penalty factor exceeds 25, a random sample of 25 actions involving that factor will be reviewed. An overall evaluation of the consistency of actions reviewed in each area of misconduct will be compiled. The report will also include any feedback obtained from the Union.

7. The Employer's report on the use of the Guide will be provided to the Ethics Program Executive and the Union.

8. The report will not be used by either the Employer or the Union to support or oppose disciplinary actions on appeal.

9. This agreement will become effective thirty-one (31) days from the date of execution.

Nationwide implementation for a 36-month period is necessary to avoid the problem of inconsistent treatment which the Guide was designed to resolve; conversely, a test which involves only a limited number of IRS offices would continue the problem of disparity in the meting out of discipline. In its view, 36 months is an appropriate introductory period, as it would provide front-line managers sufficient time to understand and embrace the new program. In addition, a minimum 24-month evaluation period, with all disciplinary actions being reviewed, should establish a larger universe of adverse actions; this, in turn, should allow for a more accurate assessment of the Guide's effectiveness. A statement that the Employer's goal is to "enhance the consistent treatment of employees in the disciplinary process and to emphasize to employees what the consequences of misconduct will be" will provide employees with a clear understanding of the rationale for the change, and including a reference to Articles 38 and 39 of NORD III and NCA III should help avoid any confusion regarding the overlap between the Guide and the collective-bargaining agreements. Although the Employer would welcome input from the Union regarding modification of the Guide, complete termination at the end of 36 months is not likely to serve either party's interest, as it would only create confusion among front-line managers and employees. Finally, 20 minutes of official time per employee is sufficient for review and discussion of the Guide.

2. The Union's Position

    The Union's proposal is as follows:

1. The Employer's Guide to Penalty Determinations shall be implemented as a pilot program in not more than 2 appointing offices per region for a period of 24 months; or nationwide for a period of 12 months.

Upon implementation of such a pilot program, the IRS agrees to state, in writing, its goals for the establishment of such a Guide to Penalty Determinations.

During the pilot period, the Employer shall track the various types of misconduct listed in the Guide and the actions taken in each office to correct such misconduct. A status report will be shared with NTEU every 6 months for the duration of the pilot program. Each report shall discuss what impact the Guide has had on disciplinary and adverse actions throughout the Service and whether the Guide has accomplished its stated goals.

2. The Employer agrees that this Guide shall only be considered guidance and shall not be interpreted to require a particular action for a particular offense.

Furthermore, the Employer agrees to clearly state in its introduction to this Guide that it is not intended to require a penalty which would be more severe than that which would otherwise be applicable using the Douglas factors and in applying the terms of Articles 38 and 39 of NORD III or NCA III.

3. A copy of this Guide to Penalty Determinations shall be distributed to all IRS bargaining unit employees. Employees will be given not more than one hour of official time to review this Table and to meet with local chapter representatives to discuss issues and concerns regarding the implementation of this Guide as a pilot program.

4. At the conclusion of the pilot period, and prior to any expansion of this program, the parties agree to meet to discuss the results of the pilot program. At that time, NTEU reserves its right to reopen negotiations concerning the use of this Guide to Penalty Determinations.

Implementing the Guide in a limited number of offices for 24 months is preferable, as it would allow for a comparison between the test group and those offices which continue to operate under the present disciplinary system. As an alternative, nationwide implementation for a 12-month period would be acceptable, as this period would provide adequate data for purposes of assessing and revising the Guide. A requirement that the Employer provide a status report at each 6-month interval would allow for timely suggestions from the Union; in this regard, unanticipated problems should be discussed and corrected quickly so that the goal of developing a fair and objective plan for dealing with conduct-related problems may be achieved. Also, clearly stating that the penalties set forth in the Guide are consistent with the principles established in Douglas v. Veterans Administration, 5 MSPR 280 (1981),(*) as well as Articles 38 and 39 of NORD III or NCA III, should assure employees that the Guide is not a departure from Merit Systems Protection Board case law and the parties' collective-bargaining agreements. Under the Union's plan, a complete discussion and evaluation of the Guide would follow the pilot program, with complete termination being an option should the program not achieve the intended result. Finally, allowing each employee up to 1 hour to review the Guide and discuss it with Union officials is appropriate, given the length and complexity of the written document.


    Having reviewed the evidence and arguments in this case, we conclude that the dispute should be resolved on the basis of a modified version of the Employer's proposal. In our view, implementation of the Guide on anything other than a nationwide basis would only continue the problem of inconsistent treatment that the Guide was designed to correct. In addition, a 36-month test period, with an assessment of all adverse actions to occur no earlier than the 24-month mark, should allow for the development of enough data so that a credible evaluation can be undertaken. Given that the Employer's proposed scheme allows for revision of the Guide once it is assessed, we shall not require that the Employer terminate the Guide at the conclusion of the test period, as such an approach would likely cause confusion among both managers and unit employees. We note, however, that the Employer's approach requires that Union input be solicited during the assessment phase, and urge the Employer to take this commitment seriously and consider carefully any revisions that may be suggested by the Union. With respect to the amount of official time that each employee shall be allowed to review the Guide, we believe that 20 minutes per employee is sufficient, given the content of the document.

    Finally, we turn to the issue of what the Guide should contain in the way of additional statements. The Employer's goal, as set forth in paragraph 1 of its proposal, is a clear and concise statement of its intended objective. Paragraph 4 of the Employer's proposal, however, is deficient because it fails to explain that, in addition to the applicable provisions of the parties' collective-bargaining agreements, certain portions of the Internal Revenue Manual relating to disciplinary action will also continue to apply. More specifically, there is no reference to that portion of the Manual which describes the Douglas factors and their application, nor is there any reference to the supplemental guidance found in IRM 0751.16 which deals with the accountability of various positions. Stating affirmatively that certain contract provisions continue to apply, while failing to make the same affirmative statement regarding relevant portions of the Manual, could lead to confusion as to the continued applicability of the latter. For this reason, we shall modify paragraph 4 of the Employer's proposal to include such a reference.


    Pursuant to the authority vested in it by the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their dispute during the course of proceedings instituted pursuant to the Panel's regulations, 5 C.F.R. § 2471.6 (a)(2), the Federal Service Impasses Panel under § 2471.11(a) of its regulations hereby orders the following:

    The parties shall adopt the Employer's proposal, with paragraph 4 modified as follows:

4. The Guide will also contain a statement that, in deciding on a corrective action, all relevant factors, including those listed in IRM 0752.43(12)(4)(c), i.e., the "Douglas" factors, and the supplemental guidance in IRM 0751.16 dealing with the accountability of various positions, are to be considered, and, with respect to bargaining-unit employees, the provisions of Articles 38 (Disciplinary Actions) and 39 (Adverse Actions) in NORD III and NCA III continue to apply.


By direction of the Panel.

Linda A. Lafferty

Executive Director

October 28, 1993

Washington, D.C.


*/ Douglas requires, inter alia, that agency penalty tables should not be applied so inflexibly as to impair consideration of other factors relevant to an individual case. In this regard, an agency-imposed penalty may be excessive in a particular case, even if it is within the range permitted by statute or regulation. In reviewing an agency-imposed penalty, the MSPB standard is whether the penalty is "clearly excessive" or was "arbitrary, capricious, or unreasonable." See Douglas at 296-308.