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 19 FLRA No. 5
 
 VETERANS ADMINISTRATION MEDICAL CENTER, 
 LINCOLN, NEBRASKA
 Activity
 
 and
 
 AMERICAN FEDERATION OF GOVERNMENT
 EMPLOYEES, LOCAL NO. 2219
 Union
 
                                            Case No. O-AR-924
 
                                 DECISION
 
    This matter is before the Authority on an exception to the award of
 Arbitrator Russell C. Neas filed by the Activity under section 7122(a)
 of the Federal Service Labor-Management Relations Statute and part 2425
 of the Authority's Rules and Regulations.
 
    The parties submitted several issues to arbitration, one of which the
 Arbitrator framed as whether management violated the parties' collective
 bargaining agreement by refusing to negotiate over changes in the
 incentive award system.  The Arbitrator determined that the criteria
 governing incentive awards is a mandatory subject of bargaining and that
 consequently the Activity violated the parties' agreement when it
 refused to bargain over modifications or substitutions of criteria
 governing incentive awards.  Accordingly, the Arbitrator awarded, in
 pertinent part, as follows:
 
          Management violated the Contract by refusing to negotiate with
       the Union over changes in the Incentive Awards System.  Management
       is hereby directed, upon request by the Union, to bargain in good
       faith concerning any proposed changes or changes implemented since
       March 19, 1984.
 
    In one of its exceptions, the Activity contends that the award is
 contrary to section 7106(a) of the Statute.  Specifically, the Agency
 maintains on the basis of Louis A. Johnson Veterans Administration
 Medical Center, Clarksburg, West Virginia and American Federation of
 Government Employees, Local 2384, 15 FLRA No. 74 (1984), that the award
 is deficient as contrary to section 7106(a)(2)(A) and (B) of the
 Statute.  The Authority agrees.
 
    In Louis A. Johnson Veterans Administration Medical Center the
 Authority found deficient an arbitration award ordering the activity to
 negotiate with the union concerning the decision of the activity to
 modify the criteria governing incentive awards.  In this respect the
 Authority explained that an integral aspect of management's exercise of
 its right to direct employees under section 7106(a)(2)(A) and to assign
 work under section 7106(a)(2)(B) is to prescribe the standards which an
 employee must attain in order to be eligible for a reward for superior
 performance.  Id. at 5 (citing National Treasury Employees Union and
 Internal Revenue Service, 14 FLRA 463 (1984) (proposals 1-2)).  Thus,
 the Authority ruled that the arbitration award was deficient as contrary
 to section 7106(a) to the extent that it subjected the activity's
 decision to modify the criteria governing incentive awards to
 negotiation and the Authority modified the award accordingly.  In terms
 of this case, the award is likewise deficient as contrary to section
 7106(a) to the extent it subjects the Activity's decision to modify or
 substitute criteria governing incentive awards to negotiation.
 
    Accordingly, the award as to this issue is modified to provide as
 follows:  /1/
 
          Management is hereby directed, upon request by the Union, to
       bargain in good faith concerning procedures and appropriate
       arrangements for employees adversely affected by any proposed
       changes or changes concerning the modification or substitution of
       criteria governing incentive awards since March 19, 1984.
 
 See id. at 5-6.  Issued, Washington, D.C., July 11, 1985
                                       Henry B. Frazier III, Acting
                                       Chairman
                                       William J. McGinnis, Jr., Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ In view of this decision, it is not necessary to address the
 other exception to the award. 
 
 
 

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