14:0598(84)NG - NTEU Chapter 207 and FDIC, Washington, DC -- 1984 FLRAdec NG
[ v14 p598 ]
14:0598(84)NG
The decision of the Authority follows:
14 FLRA No. 84
NATIONAL TREASURY EMPLOYEES
UNION, CHAPTER 207
Union
and
FEDERAL DEPOSIT INSURANCE
CORPORATION, WASHINGTON, D.C.
Agency
Case No. O-NG-446
DECISION AND ORDER ON NEGOTIABILITY ISSUES
The petition for review in this case comes before the Authority
pursuant to section 7105(a)(2)(D) and (E) of the Federal Service
Labor-Management Relations Statute (the Statute) and presents issues as
to the negotiability of five Union proposals.
Union Proposal 1
Article 12, Section 11C - Merit Promotion
The selection official has thirty (30) calendar days from the
date of issuance of the Roster in which to make a selection.
After selection has been made, all applicants will be notified of
their nonselection and the name of the selectee. (Only the
underscored language is in dispute.)
Question Before the Authority
The question is whether, as alleged by the Agency, the Union's
proposal is outside the duty to bargain under section 7117(a)(2) of the
Statute because it is inconsistent with an Agency regulation for which a
compelling need exists. /1/
Opinion
Conclusion and Order: The Union's proposal is not inconsistent with
an Agency regulation for which a compelling need exists. Rather, the
proposal establishes a negotiable procedure under section 7106(b)(2) of
the Statute. Accordingly, pursuant to section 2424.10 of the
Authority's Rules and Regulations, IT IS ORDERED that the Agency shall
upon request (or as otherwise agreed to by the parties) bargain
concerning Union Proposal 1.
Reasons: The Agency contends that the Union's proposal is
inconsistent with an Agency regulation for which a compelling need
exists. According to the Agency, the regulation meets the Authority's
criterion set forth in 5 CFR 2424.11(a), which provides:
Sec. 2424.11 Illustrative criteria.
A compelling need exists for an agency rule or regulation
concerning any condition of employment when the agency
demonstrates that the rule or regulation meets one or more of the
following illustrative criteria:
(a) The rule or regulation is essential, as distinguished from
helpful or desirable, to the accomplishment of the mission or the
execution of functions of the agency or primary national
subdivision in a manner which is consistent with the requirements
of an effective and efficient government.
Under section 7117(a)(2) and 5 CFR 2424.11 of the Authority's Rules
and Regulations, an agency has the burden of coming forward with
affirmative support for assertions that its regulations bar negotiation
on conflicting proposals because of the existence of a compelling need.
/2/ The compelling need provisions of the Statute are meant to insure
that bargaining proposals concerning conditions of employment of
bargaining unit employees, which are otherwise within the duty to
bargain, are barred from negotiation due to a conflict with agency rules
or regulations only if the agency involved demonstrates and justifies,
under criteria established by the Authority, an overriding need for the
policies reflected in the rules or regulations to be uniformly applied
throughout the agency. /3/ Hence, the Authority's illustrative
criterion for determining compelling need in 5 CFR 2424.11(a) of the
Rules and Regulations requires an agency to demonstrate that the rules
or regulation upon which it relies as a bar to negotiation on a
conflicting union proposal is "essential as distinguished from helpful
or desirable" to achieve certain ends. This standard of essentiality is
the measure under the Statute and the Authority's Rules and Regulations
of whether the necessity claimed for an agency regulation to bar
negotiations on a conflicting union proposal rises to the level of a
compelling need. /4/
While the Agency contends that the proposed 30 day period, as
contrasted with the 60 day period provided in its regulation, is an
inadequate amount of time to allow for a selection from a best qualified
list, the Agency has not demonstrated that the regulation is "essential
as distinguished from helpful or desirable" to achieve the result
desired under its Merit Promotion Plan. In this regard, the Agency has
not shown that a selecting official cannot insure the selection of the
best qualified candidate in less than 60 days. Therefore, the Agency
has not demonstrated a compelling need for its regulation to bar
negotiations on this conflicting Union proposal.
The proposal would establish a time limit for the Agency's exercise
of its rights pursuant to section 7106(a)(2)(C) of the Statute to fill a
position by making a selection from a particular certificate of
candidates. Based on the record, the proposal only would apply where
management has chosen a certificate as the source from which it wishes
to consider candidates and make a selection; it would not have the
effect of preventing the Agency from considering and selecting a
candidate from any other appropriate source. Moreover, the proposal
would not prevent the Agency from obtaining additional certificates in
the event that no selection is made within the time limit. Therefore,
the proposal does not prescribe substantive matters with regard to
selections. Rather, it concerns the "procedures which management
officials of the agency will observe" in exercising their right to
select from a certificate and is negotiable under section 7106(b)(2) of
the Statute. /5/
Union Proposal 2
Article 19 - Suggestion Awards
A. An employee will receive as an award for an accepted
suggestion 10% of the value of the benefit to the Corporation for
suggestion benefits of up to $10,000 i; value.
B. For suggestions over $10,000 in value the above formula
will apply to the first $10,000 of value while the employee will
receive 5% of any value over $10,000.
C. Sections A and B apply to tangible benefits.
Questions Before the Authority
The questions are whether, as alleged by the Agency, the Union's
proposal is outside the duty to bargain under section 7117(a) of the
Statute because of inconsistency with Federal law, Government-wide
regulation and Agency regulation for which a compelling need exists.
Opinion
Conclusion and Order: Union Proposal 2 is not inconsistent with
Federal law, Government-wide regulation or Agency regulation for which a
compelling need exists, as claimed by the Agency. Accordingly, pursuant
to section 2424.10 of the Authority's Rules and Regulations, IT IS
ORDERED that the Agency shall upon request (or as otherwise agreed to by
the parties) bargain concerning Union Proposal 2.
Reasons: According to the Agency, the FDIC has not been specifically
excluded from the scope of 5 U.S.C. 4501 (concerning the government
employees incentive awards program) and the regulations promulgated to
carry out the agency awards program in Part 451 of title 5 of the Code
of Federal Regulations and therefore is subject to these provisions.
/6/ Therefore, contrary to the Union's contention, that the FDIC is not
subject to these provisions, /7/ the regulation set forth at 5 CFR
451.205 applies to the Agency which, as a Government corporation, /8/ is
included within the definition of "Executive Agency" for purposes of
this section of the Code of Federal Regulations. /9/ However, the
proposal's plain language is not inconsistent with that section, /10/
nor has the Agency shown how the proposal would interfere with its
ability to carry out its responsibilities thereunder as it claims. The
proposal merely establishes a formula for determining the amount of an
award that an employee whose suggestion results in tangible benefits to
the Agency will received, a matter not prescribed by the regulations in
question. Thus, even assuming that 5 CFR 451.205 is a Government-wide
regulation, it is not a bar to negotiation of this proposal.
As to the Agency's internal regulation for which it alleges a
compelling need because it meets the criteria set forth at 5 CFR
2424.11(a) and (c), that regulation itself, the Federal Deposit
Insurance Corporation Incentive Awards Program, Subchapter 3. Suggestion
Program at 3-3. Determining Amount of Cash Awards for Tangible Benefits,
provides that exceptions to the amounts the Agency has established can
be granted. Consequently, the Agency's contention that the regulation
is essential, as opposed to merely helpful or desirable, to maintain
uniformity within its awards program cannot be sustained. Thus, the
Agency has not demonstrated that its regulation meets the Authority's
compelling need criterion at 5 CFR 2424.11(a). Similarly, there is not
a compelling need under 5 CFR 2424.11(c). /11/ The Agency has offered
no support for its contention that its regulation is mandated by 5 CFR
451.205(a), previously discussed, so that it has no discretion to
negotiate matters related to its suggestion awards program. On the
contrary, while 5 CFR 451.205 requires the Agency to establish an
incentive awards program, it mandates neither a formula for determining
suggestion award amounts nor a standard for uniformity which is
essentially nondiscretionary in nature. Therefore, the Agency has not
demonstrated a compelling need for its regulation to bar negotiations on
the Union's proposal under section 7117(a)(2) of the Statute.
Finally, contrary to the contention of the Agency, the proposal would
not conflict with 5 U.S.C. 4501 and implementing regulations in 5 CFR
451.205(c)(1) which require the Agency to transmit all award
recommendations over $10,000 to OPM. In this regard, the Union
acknowledges its intent that employee awards in excess of $10,000 would
be subject to OPM approval under this proposal, /12/ and the language of
the proposal itself would not require otherwise. Hence, this Agency
contention does not provide a basis for finding the proposal to be
outside the duty to bargain. Cf. American Federation of Government
Employees, AFL-CIO, Local 32 and Office of Personnel Management,
Washington, D.C., 3 FLRA 784 (1980) (proposal which was silent as to
matters covered by Government-wide regulations was not inconsistent with
those regulations).
Thus, the proposal has not been shown to be inconsistent with Federal
law, Government-wide regulation, or Agency regulation for which a
compelling need exists and is within the Agency's duty to bargain. /13/
Union Proposal 3
Article 35 - Outside Employment
Employees are permitted to engage in outside employment without
the prior approval of the EMPLOYER. However, if the employee does
submit a request for prior approval, it will be acted on in five
days by the Corporation. (This decision, like all made in
connection with employee requests for outside employment will be
made only for fair and objective reasons. No one will be denied
the opportunity to engage in outside employment except for just
cause.) If prior approval is given, at no time may the EMPLOYER
issue a Notice of Adverse Action to the employee for improper
outside employment unless thirty days prior to the Notice it
informs the employee in writing of its desire that the employee
cease the outside employment. All reasons and supporting evidence
will accompany this written notice. With the permission of the
UNION, the employee may go directly to expedited arbitration on
this decision by invoking this right within ten (10) calendar days
of the written notice.
Questions Before the Authority
The questions are whether, as alleged by the Agency, the Union's
proposal is outside the duty to bargain under section 7117(a) of the
Statute because it is inconsistent with Federal law, Government-wide
regulation and Agency regulation for which a compelling need exists.
Opinion
Conclusion and Order: The Union's proposal is not inconsistent with
Federal law, Government-wide regulation or Agency regulation for which a
compelling need exists but, instead, establishes a negotiable procedure
under section 7106(b)(2) of the Statute. Accordingly, pursuant to
section 2424.10 of the Authority's Rules and Regulations, IT IS ORDERED
that the Agency shall upon request (or as otherwise agreed to by the
parties) bargain concerning Union Proposal 3.
Reasons: The Agency does not require an FDIC employee to seek
approval prior to engaging in outside employment. /14/ The Union states
that the proposal is intended to protect employees who nevertheless
request and are granted approval by the Agency from having the Agency
initiate adverse action proceedings, if it subsequently disapproves of
the outside employment, without advance notice to the employee. /15/
The language of the proposal is consistent with this interpretation and
it is adopted for purposes of this decision.
The Agency argues that, once it determines that an employee's outside
employment constitutes a conflict of interest situation, the proposal
would improperly prevent it from taking immediate disciplinary or other
remedial action to end the conflict as it is required to do by title 5
of the Code of Federal Regulations at section 735.107 /16/ and by its
own regulations issued pursuant to 5 CFR 735.104. /17/
Assuming that the proposal would prevent the Agency from immediately
initiating the adverse action procedures against an employee who had
received its approval prior to engaging in outside employment, the
Agency's contention that the proposal thereby is rendered inconsistent
with 5 CFR 735.107 and implementing FDIC regulations cannot be sustained
on that basis. Both section 735.107 of the Code of Federal Regulations
and the Agency's regulation provide that the agency, once it decides
remedial action is required, must take immediate action to end a
conflict or appearance of a conflict of interest. Both regulations
specify certain actions that the Agency may take (see note 15, supra),
but those specified are not all "adverse actions" under Chapter 75 of
title 5 of the United States Code. Furthermore, the Agency is not
limited to the specified actions. Therefore, as nothing in the proposal
would prevent the Agency from taking some of the specified actions
against an employee immediately upon determining that a conflict of
interest exists and, further, as nothing in the regulations requires the
Agency to immediately initiate adverse action procedures upon such a
determination, the proposal is not inconsistent with 5 CFR 735.107 or
with Part 336 of the FDIC Rules and Regulations.
The Agency also claims that the proposal conflicts with the intent of
section 7121(e) of the Statute, which states in part:
Matters covered under sections 4303 and 7512 of this title
which also fall within the coverage of the negotiated grievance
procedure may, in the discretion of the aggrieved employee, be
raised either under the appellate procedures of section 7701 of
this title or under the negotiated grievance procedure, but not
both.
With respect to this contention, the proposal provides that an
employee can grieve an Agency disapproval of a request to engage in
outside employment. Such an Agency disapproval does not fall within the
actions covered in section 7512, i.e., adverse actions, and, therefore,
cannot be raised under the appellate procedures of section 7701 of title
5 of the United States Code. Consequently, an Agency disapproval of an
outside employment request is not a matter covered both under section
7512 and a negotiated grievance procedure. Thus, this Agency contention
that the proposal violates the intent of section 7121(e) is inapposite.
Further, the Agency's initiation of an adverse action against an
employee is distinct from its disapproval of an outside employment
request. Therefore, contrary to the Agency's claim, an arbitrator's
decision on a grievance of such disapproval would not prejudice the
Agency's position in a subsequent grievance of an adverse action taken
against that employee to remedy a conflict of interest situation.
Moreover, consistent with section 7121(e)(1) of the Statute, if the
Agency does take an adverse action, the employee would still be entitled
to choose between an appeal through a negotiated grievance procedure or
through the appellate procedures of section 7701 because the employee's
choice to grieve the matter of the Agency's disapproval, as provided
under the proposal, does not involve a choice with respect to a matter
covered by section 7512, as already mentioned.
Thus, based on the record before the Authority, the proposal does not
prevent the Agency from taking immediate action to remedy a conflict of
interest situation and is not otherwise inconsistent with Federal law.
Rather, the proposal would only require that the Agency give 30 days
notice, to any employee who had received Agency approval for engaging in
outside employment, before initiating the adverse action procedures
against the employee. In American Federation of Government Employees,
AFL-CIO, Local 1999 and Army-Air Force Exchange Service, Dix-McGuire
Exchange, Fort Dix, New Jersey, 2 FLRA 152, 155 (1979), enforced sub
nom. Department of Defense v. Federal Labor Relations Authority, 659
F.2d 1140 (D.C. Cir. 1981), cert. denied sub nom. AFGE v. FLRA, 455 U.S.
945, 102 S.Ct. 1443 (1982), the Authority stated that section 7106(b)(2)
of the Statute "is intended to authorize an exclusive representative to
negotiate fully on procedures, except to the extent that such
negotiations would prevent agency management from acting at all." It has
not been shown that Union Proposal 3 would prevent the Agency from
acting at all with respect to its reserved rights. Hence, the proposed
procedure is negotiable under section 7106(b)(2) of the Statute. /18/
Union Proposal 4
Article 41, Section 3 - Travel
A. All employees will be reimbursed for mileage expenses
consistent with the FDIC or GSA regulations, whichever is greater.
B. All employees will be granted reimbursement under the
Lodgings-Plus formula of the FDIC regulations. In no case will
the reimbursement be less than what would be permitted under GSA
Travel Regulations, including that for high rate cities.
Question Before the Authority
The question is whether, as alleged by the Agency, the Union's
proposal is outside the duty to bargain under section 7117(a)(2) of the
Statute because it is inconsistent with Agency regulations for which a
compelling need exists.
Opinion
Conclusion and Order: The Union's proposal is not barred by Agency
regulations for which a compelling need exists. Accordingly, pursuant
to section 2424.10 of the Authority's Rules and Regulations, IT IS
ORDERED that the Agency shall upon request (or as otherwise agreed to by
the parties) bargain concerning Union Proposal 4.
Reasons: Based on the record, the Agency is not subject to the
Federal Travel Regulations promulgated by the General Services
Administration and, thus, it has promulgated its own FDIC General Travel
Regulations (GTR's). /19/ The Agency contends that the proposal is
inconsistent with such Agency regulations for which it claims a
compelling need. In this connection, the Agency claims the regulations
meet the Authority's criterion at 5 CFR 2424.11(a). Specifically, the
Agency contends that Section A and the last sentence of Section B of the
proposal impose dual regulatory requirements which would be unmanageable
from an administrative standpoint. Similarly, with respect to the first
sentence of Section B, the Agency claims that adoption of the proposal
would result in increased costs and administrative problems.
Assuming that the proposal is inconsistent with the GTR's, the Agency
has not supported a finding of compelling need for those regulations to
bar negotiations. As mentioned with respect to Union Proposal 1, an
agency has the burden of coming forward with affirmative support for
assertions of compelling need. /20/ As to the present dispute, however,
the Agency's claims relate only to the merits or desirability of the
proposal. Consequently, the Agency has not demonstrated under section
7117(a)(2) of the Statute and 5 CFR 2424.11 of the Authority's Rules and
Regulations that a compelling need exists for the CTR's to bar
negotiations on the proposal. Thus, the proposal is within the duty to
bargain. /21/
Union Proposal 5
Article 59 - Salary Section 1
The salary structure, that is the grades and steps of the
schedule, being used by the FDIC will be maintained. Hereafter,
all employees will have their current salaries adjusted for the
cost-of-living/comparability factor. The adjustment will be equal
to the statistical adjustment recommended to the President by the
Pay Advisory Council. (After October 1980 the adjustment factor
developed by the Council will be modified to account for the
different comparability positions between FDIC and those employees
under the General Schedule. Beginning in January 1981 the parties
will meet to seek agreement on a modification formula.) This
adjustment will become effective the beginning of the first pay
period following the announcement of it by the council or other
appropriate sources. It will be unaffected by Presidential or
Congressional actions.
Section 2
NTEU agrees to establish with the EMPLOYER a productivity
committee that will monitor the impact of the new salary
adjustment system and seek reasonable ways to increase the
productivity of the EMPLOYER, e.g., decrease employee turnover,
remove work obstacles, improve upon available machinery and
procedures, raise employee morale, etc.
Question Before the Authority
The question is whether, as alleged by the Agency, the Union's
proposal is outside the duty to bargain because it is inconsistent with
an Agency regulation for which a compelling need exists.
Opinion
Conclusion and Order: The Union's proposal is inconsistent with an
Agency regulation for which a compelling need exists under section
7117(a)(2). Accordingly, pursuant to section 2424.10 of the Authority's
Rules and Regulations, IT IS ORDERED that the Union's petition for
review as to Proposal 5 be, and it hereby is, dismissed.
Reasons: The parties stipulate that the Union represents
approximately 650 headquarters employees out of the 3,449 employees of
the Agency; the Agency is a Government corporation and is not subject
to the pay and allowance provisions of Chapter 51 of title 5 of the
United States Code; /22/ the compensation paid to its employees is not
limited by the restrictions applicable to the "General Schedule"; and
the Agency's Board of Directors, in its discretion, regularly has
adopted resolutions pursuant to which the Agency pays its general graded
and wage graded employees at the same rates of pay as are paid to
Federal employees who are subject to Chapter 51 of title 5 of the U.S.
Code. The Union's proposal would, in Section 1, establish a salary
adjustment system for bargaining unit employees different from that
established under the Board resolutions. Section 2 would establish a
committee to monitor the impact of this negotiated salary adjustment
system. It is not disputed that the Union's proposal conflicts with the
Board resolutions /23/ and that the Board resolutions constitute agency
rules or regulations which could bar negotiation of conflicting
proposals if supported by a compelling need.
The Agency claims that there is a compelling need for these
regulations within the meaning of section 7117(a)(2) because they
maintain pay equity by means of a uniform salary structure throughout
the Agency. According to the Agency, maintaining the objective of pay
equity is essential to the accomplishment of its mission and the
execution of its functions in a manner consistent with the requirements
of an effective and efficient government so as to meet the Authority's
criterion at 5 CFR 2424.11(a) for demonstrating a compelling need for
its regulations. See notes 2, 3 and 4 and accompanying test, supra.
In support, the Agency argues that payment of a disparate, higher
wage rate to those bargaining unit employees in the Washington
headquarters office would be "highly disruptive" to the mission and
functions of the Agency which is comprised of employees in 14 regional
offices across the country as well as bargaining unit and nonbargaining
unit employees in the Washington headquarters. This disruption,
according to the Agency, would be the inevitable effect of morale and
motivation problems resulting from compensating employees classified at
the same grade level at different rates of pay. Additionally, the
Agency asserts that problems relating to its entire promotion structure
would result from a situation wherein higher graded employees could be
paid less than lower graded employees and supervisors and managers could
be paid less than the employees they supervise under the proposed salary
adjustments.
The Union argues that the Agency has not demonstrated the
essentiality of its regulations to maintain a uniform salary structure
within the Agency. However, the Union concedes that, since it is not
empowered to negotiate for employees beyond the bargaining unit,
implementation of the proposal could result in different pay rates for
bargaining unit and nonbargaining unit employees. Thus, although the
Union argues that, under its proposed salary adjustment, compensating
benefits to management and bargaining unit employees would result, it
does not controvert the Agency's arguments that implementation of the
Union proposal would result in pay inequity, morale problems, and
problems relating to promotion system structure, throughout the Agency.
Based upon the parties' contentions, the Agency herein has
demonstrated an overriding need for the policies reflected in its
regulations in question such that the necessity it claims rises to the
level of a compelling need. The Agency has demonstrated that the need
for uniformity in its pay system is an integral aspect of the Agency's
stated objective of pay equity. /24/ The Agency's need for uniformity
is thus not one of mere administrative convenience, as our colleague
suggests in dissent. /25/ In this regard, the Agency has shown that in
the pay setting area, under the circumstances presented, lack of
uniformity would result in pay inequity which in turn would result in
disruption inimical to the accomplishment of the Agency's mission and
execution of its functions in a manner consistent with an effective and
efficient government. Thus, in the circumstances in this case, we are
persuaded that there is an overriding need for a uniform pay setting
system throughout the Agency in order to operate effectively and
efficiently to accomplish its mission.
Further, there is no indication in the record that the Agency could
achieve its objective of pay equity by any means except implementing the
Union's proposal for all Agency employees. While it appears that the
Agency has discretion to implement the Union's proposal for all Agency
employees, such action would require revising the salary structure for
the more than 80% of the Agency's employees who are not in the
bargaining unit. Thus, in the circumstances herein, where less than 20%
of the Agency's employees are in the bargaining unit, the Authority
finds that it would be consistent with an effective and efficient
Government for the Agency's regulations to bar negotiation of the
Union's proposal.
Our colleague, who today dissents from this finding, among other
things, sees the issue as one best left to the collective bargaining
process, as it would be if the matter had arisen in the private sector
context. However, it should be clear by now, over 5 years having passed
since the enactment of the Statute, that the legal framework which
governs our decision today was "designed to meet the special needs and
requirements of government." /26/ Part of the legal framework which
governs our decision today is section 7117(a)(2) which provides that a
matter is not within the duty to bargain if the Authority has determined
that a compelling need exists for a conflicting agency regulation.
Thus, the Statute clearly contemplates that an agency regulation may,
under certain limited circumstances, serve as a bar to a proposal which
may be otherwise negotiable. Our colleague favors "free" collective
bargaining. We favor collective bargaining within the statutory
framework. Therefore, the Authority finds that Proposal 5 is outside
the duty to bargain under section 7117(a)(2). /27/ Issued, Washington,
D.C., May 11, 1984
Barbara J. Mahone, Chairman
Henry B. Frazier III, Member
FEDERAL LABOR RELATIONS AUTHORITY
Member Haughton concurring in part, dissenting in part:
In this case the Authority holds that Union Proposals 1 through 4 are
within the duty to bargain. I concur in those dispositions. As to
Union Proposal 5, the majority has decided that it is outside the duty
to bargain under section 7117(a)(2). I respectfully dissent from this
part of the decision.
As noted by the majority, the record shows that the Agency as a
Government corporation is not subject to the pay and allowance
provisions of Chapter 51 of title 5 of the United States Code; that the
compensation paid to its employees is not limited by the restrictions
applicable to the "General Schedule"; that the Agency's Board of
Directors has adopted a resolution pursuant to which it pays its general
graded and wage graded employees the same rates of pay as are paid to
Federal employees who are subject to Chapter 51 of title 5 of the United
States Code; and that these resolutions constitute Agency regulations.
The Agency argues that providing a uniform salary schedule is essential
to the mission and function of the FDIC, and that a compelling need
exists for the regulations that establish the current system.
In support of its claim, the Agency first contends that the proposal
would result in two co-existing pay systems which would be unmanageable
to administer. It further argues, and the majority implicitly agrees,
that inequities would result from paying bargaining unit employees at
different and higher salary rates than all other employees that that
this would be disruptive to the mission and function of the Agency. The
decision holds that the Agency's resolutions are "essential, as
distinguished from helpful or desirable, to the accomplishment of the
mission or the execution of functions of the agency . . . in a manner
which is consistent with the requirements of an effective and efficient
government," as provided under section 2424.11(a) of the Authority's
Rules and Regulations (5 CFR 2424.11(a)).
I find that the Agency has failed to demonstrate the essentiality of
these resolutions. FLRA Regulation No. 2424.11(a) cites an illustrative
criterion for establishing a compelling need for an agency rule or
regulation which is on point. Subsection (a) reads:
The rule or regulation is essential, as distinguished from
helpful or desirable, to the accomplishment of the mission or the
execution of functions of the agency or primary national
subdivision in a manner which is consistent with the requirements
of an effective and efficient government.
Citations to Authority decisions making it clear that the burden is
on an agency to establish essentiality and overriding need for policies
reflected in rules or regulations are contained in notes 2, 3 and 4 and
accompanying text, supra.
Reference to the specific language of FDIC Regulations 31207, 3166,
and 3677, relied upon by the Agency, supports the Union's claim that
compelling need is not justified, but that the Agency's action as to pay
rates for bargaining unit employees is based on "desirability,"
"tradition," and "speculation." /28/ FDIC Resolution 31207 simply deems
it "desirable to extend to the personnel of the Corporation compensation
rates comparable to those of most other Federal employees . . . "
Resolution 3167 notes, in part, that "the corporation has traditionally
adopted" the basic Federal compensation schedule for Civil Service
employees throughout the Metropolitan Washington, D.C. area, and that
"it is believed to be appropriate to continue this practice." Resolution
3166 contains similar provisions applicable to FDIC's lithographic and
printing positions other than those involved in wage board work.
The fact is, the language "deemed desirable," "traditional," and
"believed to be appropriate" contained in the Board's Resolutions and
relied upon by FDIC belies essentiality. Finding that such resolutions
are essential despite such language is speculative. By the language of
FLRA Regulation 2424.11(a) this does not establish compelling need.
Furthermore, while the resolutions set forth a uniform policy, they
do not express and therefore do not support a need for uniformity. In
any event, the Agency has not supported a finding that uniformity of pay
scale is essential, as found by my colleagues. The Agency contentions
merely indicate that it does not wish to change the pay policy that it
has adopted for all employees because it does not want to have to
administer different pay schedules for bargaining unit employees and
nonbargaining unit employees. These contentions relate to the
helpfulness or desirability of the Agency's resolutions but do not
demonstrate that they are essential as specified by section 2424.11(a)
of the Authority's rules. Thus, the Agency has not demonstrated that
its resolutions are a bar to negotiations on the Union's proposal.
The foregoing goes to the legal basis of why I believe that Proposal
5 is negotiable. My dissent also has roots in my basic commitment to
the institution of free collective bargaining.
Because the FDIC is a Government corporation that is not subject to
the pay and allowance provisions of Chapter 51 of title 5 of the United
States Code, and because the compensation paid to its employees is not
limited by the restrictions applicable to the "General Schedule," we are
now presented with a rare opportunity in an area of the Federal sector
for real collective bargaining on a gut issue.
The decision of the majority would stop this process by finding a
compelling need which has the effect of supporting the Agency's position
on the merits of an issue with respect to which no law or
government-wide regulation restricts collective bargaining. My position
is that, absent specific statutory proscriptions, the parties should
take their lumps and bargain on the merits of the issue. /29/ The
Agency's argument that there is a compelling need is really no more than
what it no doubt believes is its strongest position on the merits. If
during the collective bargaining process the parties arrive at an
impasse, the Federal Service Impasses Panel is available to decide the
issue in a fair and equitable manner.
The possibility of a disruption of an established tandem wage
relationship surfaces in collective bargaining in both the private and
public sectors. The arguments over "wage parity" between police and
fire bargaining units are well known. It has been an issue in the
automobile industry, which I know so well. The General Motors
Corporation's bargaining relationships with the United Auto Workers
Union and with the smaller International Union of Electrical Workers
come to mind. In those situations it has been up to General Motors to
make every effort to ensure that the tail does not wag the dog. I
cannot believe that the FDIC would be any less competent in this
delicate area of collective bargaining. The simple assertion of
compelling need should not serve to block the normal collective
bargaining process. Issued, Washington, D.C., May 11, 1984
Ronald W. Haughton, Member
FEDERAL LABOR RELATIONS AUTHORITY
--------------- FOOTNOTES$ ---------------
/1/ Section 7117(a)(2) provides:
Sec. 7117. Duty to bargain in good faith; compelling need;
duty to consult
. . . .
(a)(2) The duty to bargain in good faith shall, to the extent
not inconsistent with Federal law or any Government-wide rule or
regulation, extend to matters which are the subject of any agency
rule or regulation referred to in paragraph (3) of this subsection
only if the Authority has determined under subsection (b) of this
section that no compelling need (as determined under regulations
prescribed by the Authority) exists for the rule or regulation.
/2/ American Federation of Government Employees, AFL-CIO, Local 1928
and Department of the Navy, Naval Air Development Center, Warminster,
Pennsylvania, 2 FLRA 451, 454 (1980).
/3/ American Federation of Government Employees, AFL-CIO, Local 3804
and Federal Deposit Insurance Corporation, Chicago Region, Illinois, 7
FLRA 217, 220 (1981).
/4/ American Federation of Government Employees, AFL-CIO, Local 2875
and Department of Commerce, National Oceanic and Atmospheric
Administration, National Marine Fisheries Service, Southeast Fisheries
Center, Miami Laboratory, Florida, 5 FLRA 441, 447 (1981).
/5/ In deciding that the proposal is within the duty to bargain, the
Authority makes no judgment as to its merits.
/6/ Agency Statement of Position at 6.
/7/ Union Reply Brief at 3-4.
/8/ See American Federation of Government Employees, AFL-CIO, Local
3804 and Federal Deposit Insurance Corporation, Chicago Region,
Illinois, 7 FLRA 217 (1981).
/9/ See 5 U.S.C. Secs. 103, 105 and 4501.
/10/ 5 CFR 451.205(a) provides in relevant part:
Sec. 451.205 Agency responsibilities.
(a) The head of each agency shall give personal leadership to
the agency's incentive awards program and seek to gain maximum
benefits for the Government through improved employee motivation
and productivity by providing for:
(1) Equal opportunity for all employees to earn awards by
training employees on how they may earn awards, and further
training for supervisors and managers on the effective use of
incentive awards to improve individual and organizational
performance;
(2) Integrity of the program by reviewing agency program
results to assure that awards are granted equitably, on the basis
of merit, and that, when merited, action is taken to grant awards;
and that information is made available concerning persons who
have received awards and the reason(s) why each award is
granted(.)
/11/ In this regard, 5 CFR 2424.11(c) provides:
Sec. 2424.11 Illustrative criteria.
A compelling need exists for an agency rule or regulation
concerning any condition of employment when the agency
demonstrates that the rule or regulation meets one or more of the
following illustrative criteria:
. . . .
(c) The rule or regulation implements a mandate to the agency
or primary national subdivision under law or other outside
authority, which implementation is essentially nondiscretionary in
nature.
/12/ Union Reply Brief at 4.
/13/ In deciding that this proposal is within the Agency's duty to
bargain, the Authority makes no judgment as to its merits. Furthermore,
it is noted that the incentive awards with which this proposal is
concerned are not incentives for superior performance of job
requirements so that determination of them would be subject to
management's reserved authority under sections 7106(a)(2)(A) and (B) of
the Statute. See National Treasury Employees Union and Internal Revenue
Service, 14 FLRA No. 77 (1984).
/14/ Agency Statement of Position at 3.
/15/ Union Reply Brief at 2.
/16/ 5 CFR 735.107 provides:
Sec. 735.107 Disciplinary and other remedial action.
(a) Agency regulations issued under this part shall provide
that a violation of the agency regulations by an employee or
special Government employee may be cause for appropriate
disciplinary action which may be in addition to any penalty
prescribed by law.
(b) When, after consideration of the explanation of the
employee or special Government employee provided by Sec. 735.106,
the agency head decides that remedial action is required, he shall
take immediate action to end the conflicts or appearance of
conflicts of interest. Remedial action may include, but is not
limited to:
(1) Changes in assigned duties;
(2) Divestment by the employee or special Government employee
of his conflicting interest;
(3) Disciplinary action; or
(4) Disqualification for a particular assignment.
Remedial action, whether disciplinary or otherwise, shall be
effected in accordance with any applicable laws, Executive orders,
and regulations.
/17/ Part 336 of the Federal Deposit Insurance Corporation (FDIC)
Rules and Regulations provides:
When, after consideration of the explanation of the employee or
special Corporation employee provided by Sec. 336.735-41, the
Chairman of the Board decides that remedial action is required, he
shall take immediate action to end the conflicts or appearance of
conflicts of interest. Remedial action includes, but is not
limited to:
(1) Changes in assigned duties;
(2) Divestment by the employee or special Corporation employee
of his conflicting interest;
(3) Disciplinary action; or
(4) Disqualification for a particular assignment.
Remedial action, whether disciplinary or otherwise shall be
effected in accordance with any applicable law, Executive orders
and regulations. (12 C.F.R. 336.735-42.)
/18/ In deciding that Union Proposal 3 is within the duty to bargain,
the Authority makes no judgment as to its merits.
/19/ Agency Statement of Position at 4.
/20/ See note 2, supra.
/21/ In deciding that both sections of this proposal are within the
duty to bargain, the Authority makes no judgment as to the merits
thereof.
/22/ See 5 U.S.C. 5102 and 5 CFR 511.201.
/23/ Insofar as appears in the record, Section 2 of the Union's
proposal is contingent upon the negotiation of the salary adjustment
system pursuant to Section 1. The Union did not request that we rule on
this section separately, and we find it unnecessary to do so.
/24/ Cf. AFGE Local 2875 and Southwest Fisheries Center, Miami
Laboratory, Florida, 5 FLRA 441 (1981) (wherein the Authority held with
respect to Proposal 4 that the uniform application of an agency
regulation requiring charges to leave in hourly increments was not
demonstrated essential to an agency's stated objective of effective and
efficient pay and leave administration); American Federation of
Government Employees, AFL-CIO, Local 2670 and Army and Air Force
Exchange Service, Keesler Air Force Base Exchange, Mississippi and
American Federation of Government Employees, AFL-CIO, Local 1504 and
Departments of the Army and Air Force, Army and Air Force Exchange
Service, Northwest Area Exchange, Ft. Lewis, Washington, 10 FLRA 71
(1982) (wherein the Authority held that an agency regulation requiring
uniform value for a free meal was not demonstrated essential to an
agency's stated objective of preparation and maintenance of accurate
payroll and tax records).
/25/ We would note that the language in the numbered Board
resolutions cited by Member Haughton for the premise that the Agency's
regulation is merely desirable as opposed to essential relates to the
Agency's use of the title 5 pay model, and not to the more basic need
for a uniform pay system.
/26/ 5 U.S.C. 7101(b).
/27/ In view of the decision herein, we find it unnecessary to rule
upon the Agency's additional contentions, which include the Agency
contention that the proposal would interfere with its right to determine
its budget under section 7106(a)(1) of the Statute.
/28/ See Union Response to Agency Statement, pages 5 and 6.
/29/ The following quotation from pages 2-3 of the Union's Response
to Agency Statement on Proposal 5 addresses the matter of Congressional
intent regarding negotiability issues:
NTEU submits that the drafters of the Civil Service Reform Act
(CSRA) intended that the agency prove beyond a reasonable doubt
that a union proposal was non-negotiable. Representative Udall
articulated this intent, to establish the highest standard of
proof in negotiability appeals, when explaining his substitute
language which was adopted into law, to the full House:
Section 7106. Management Rights. Four changes increase the
number of rights reserved to management. This substitute
strengthens the 'management rights' Section reported by the
Committee, but it is still to be read narrowly as an exception to
the general obligation to bargain over conditions of employment.
Congressional Record, September 13, 1978, p. H. 9634.
Representative Ford testified succinctly on this burden which
agencies have to show exceptions to the general obligation to
bargain:
"A principal goal in revising the management rights clause is
to change the current situation and, wherever possible, encourage
both the parties to work out their differences in negotiations . .
. In retaining a management right clause in our original draft of
Title VII, Mr. Clay and I, as well as the Committee intended,
however that this Section be read very narrowly. In agreeing to
the Udall Compromise of adding several more portions to this
Section, we fully intend that the Committee's original position go
unchanged and that this Section be narrowly construed."
Congressional Record, September 13, 1978, p. H. 9649.
Representative Ford related the principle of narrow
construction of exception to negotiability to the standard of
proof required to sustain an agency allegation of nonnegotiability
as follows:
The Committee equally intended that the listed management
rights were to be narrowly construed exceptions to the general
obligation to bargain in good faith over conditions of employment
and that Section 7106 be read to favor collective bargaining
whenever there is doubt as to the negotiability of a subject or
proposal.
Congressional Record, September 13, 1978, p. H. 9634.