27:0440(61)NG - AFGE Local 3477 and Commodity Futures Trading Commission -- 1987 FLRAdec NG
[ v27 p440 ]
27:0440(61)NG
The decision of the Authority follows:
27 FLRA No. 61
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, AFL-CIO, LOCAL 3477
Union
and
COMMODITY FUTURES TRADING
COMMISSION
Agency
Case No. 0-NG-681
(21 FLRA No. 18)
DECISION AND ORDER ON REMAND
I. Statement of the Case
This case is before the Authority pursuant to a remand at our request
from the United States of Court of Appeals for the District of Columbia
Circuit. The question involved is whether the following proposal,
seeking to establish a range of percentages of salary to be used in
determining cash awards for outstanding and superior performance, is
rendered nonnegotiable by section 7106(a)(1) of the Federal Service
Labor-Management Relations Statute (the Statute) and other applicable
laws:
Proposal 1 /1/
Percentage of award based on the employee's salary shall range
as follows:
Annual Performance Rating and Range
Outstanding 10% to 15%
Superior 5% to 10%
II. Background
In a previous decision in this case, American Federation of
Government Employees, AFL-CIO, Local 3477 and Commodity Futures Trading
Commission, 21 FLRA No. 18 (1986), the Authority held that Proposal 1
was nonnegotiable because it was to the same effect as Proposal 5 held
to be nonnegotiable in National Treasury Employees Union and Internal
Revenue Service, 14 FLRA 463 (1984). The Union appealed the Authority's
decision on Proposal 1 in Commodity Futures Trading Commission, to the
U.S. Court of Appeals for the D.C. Circuit.
An appeal of the Authority's decision in Internal Revenue Service was
pending in the D.C. Circuit when the Authority issued Commodity Futures
Trading Commission. In its decision on the appeal of Internal Revenue
Service, the D.C. Circuit rejected the Authority's reasoning in that
case that management's right to assign work to employees encompassed the
authority to reward superior performance of work assigned.
Consequently, the court vacated the Authority's decision and remanded
the case for consideration of arguments not previously addressed by the
Authority. National Treasury Employees Union v. FLRA, 793 F.2d 371
(D.C. Cir. 1986).
Because the decision that Proposal 1 was nonnegotiable in Commodity
Futures Trading Commission was based on the Internal Revenue Service
decision, the Authority sought and was granted a remand of Commodity
Futures Trading Commission.
A. Positions of the Parties /2/
The Agency contends that the proposal is nonnegotiable because it
conflicts with management's right to determine its budget under section
7106(a)(1) of the Statute. The Agency also argues that the proposal is
inconsistent with 5 U.S.C. Sections 4502 and 4503 because, in its view,
those sections establish that the head of each agency determines the
amount of each incentive award, and negotiation of the award amounts
would be contrary to those statutory requirements.
The Union contends that the proposal is not inconsistent with
management's right to determine its budget. The Union also contends
that the proposal is not inconsistent with 5 U.S.C. Sections 4502 and
4503.
B. Analysis and Conclusion
1. Whether the Proposal Violates Management's Rights under Section
7106(a)(2)(A) and (B) to Direct Employees and to Assign Work
The Authority's original finding that Proposal 1 in this case was
nonnegotiable was based on the conclusion that it had "the same effect"
as Proposal 5 in Internal Revenue Service. The proposal in that case
was described as "a proposal that would establish the rate of a monetary
incentive for performance(.)" In Internal Revenue Service, the Authority
had concluded that because the right to assign work to employees
included the right to reward superior performance, Proposal 5 interfered
with management's rights under section 7106(a)(2)(A) and (B) to direct
employees and to assign work. In rejecting the Authority's reasoning
that Proposal 5 interfered with management's rights to direct employees
and to assign work the D.C. Circuit stated that "the level of incentive
pay awarded for the performance of agency work, even work that has been
'assigned' or 'directed', does not come within the nonbargainable
management rights to assign work and direct employees." National
Treasury Employees Union v. FLRA, 793 F.2d at 375.
In our Decision and Order on Remand in Internal Revenue Service, 27
FLRA No. 25 (1987) we adopted the court's holding that determining the
level of incentive pay to be awarded for performance of assigned work
was not an exercise of the rights to direct employees and to assign work
under section 7106(a)(2)(A) and (B) of the Statute. Thus, we find that
Proposal 1 in this case which also seeks to determine the level of
incentive pay for above-normal performance of assigned work does not
violate management's rights to direct employees and to assign work.
2. Whether Proposal 1 is Inconsistent with 5 U.S.C. Sections 4502
and 4503
In the previous decision in Commodity Futures Trading Commission, the
Authority determined with respect to Proposals 2 and 3 in that case that
the cited sections of law specifically provided an agency with
discretion to decide the conditions under which it would award incentive
money to employees and the discretion as to the amount which could be
paid. Based on that reasoning the Authority concluded that Proposal 1
also was not inconsistent with 5 U.S.C. Sections 4502 and 4503. We
reached the same conclusion in our decision on remand in Internal
Revenue Service. For the reasons more fully expressed with respect to
Proposals 2 and 3 in the previous decision in Commodity Futures Trading
Commission, as well as in the decision on remand in Internal Revenue
Service, we find that Proposal 1 is not inconsistent with 5 U.S.C.
Sections 4502 and 4503.
3. Whether Proposal 1 Interferes with Management's Right to
Determine its Budget under Section 7106(a)(1) of the Statute
In our decision on remand in Internal Revenue Service we held that
Proposal 5 in that case, which sought to establish the rate of incentive
pay, did not interfere with management's right to determine its budget.
We found that such a proposal does not prescribe a particular program or
operation or an amount of funds to be included in an agency's budget.
Further, in our decision on remand in Internal Revenue Service, we
found that the agency had not demonstrated that implementation of the
proposal would result in a significant and unavoidable increase in costs
which would not be offset by compensating benefits. In this connection,
we noted that, as the proposal linked the amount of incentive money to
be awarded to increases in an employee's productivity, the proposal
directly benefited the agency's objective of greater efficiency in
Government.
Proposal 1 in this case also links the amount of incentive money to
be awarded to an increase in an employee's productivity. Further, the
Agency in this case also failed to demonstrate that Proposal 1 either
prescribes a particular program or operation or an amount of funds to be
included in the Agency's budget or results in a significant and
unavoidable increase in costs which is not offset by compensating
benefits. Thus, based on the cases and reasons more fully stated in our
decision on remand in Internal Revenue Service, we find Proposal 1 in
this case does not interfere with management's right under section
7106(a)(1) of the Statute to determine its budget.
III. Order
The Agency must upon request, or as otherwise agreed to by the
parties, bargain concerning Proposal 1. /3/
Issued, Washington, D.C., June 16, 1987.
/s/ Jerry L. Calhoun, Chairman
/s/ Henry B. Frazier III, Member
/s/ Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY
--------------- FOOTNOTES$ ---------------
(1) In the original case, two other proposals were also in dispute.
The Authority's decision on those two proposals was not appealed and
will not be reconsidered here.
(2) The parties' positions are drawn directly from those set out in
21 FLRA No. 18.
(3) In finding this proposal to be within the duty to bargain, we
make no judgment as to its merits.