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 30 FLRA NO. 129
 30 FLRA 1170

   28 JAN 1988


ASSIGN WORK APPLICATION OF MGT'S RIGHT
   AWARD PROGRAM


NATIONAL TREASURY EMPLOYEES
UNION

                     Union

      and

INTERNAL REVENUE SERVICE,
INDIANAPOLIS DISTRICT

                     Agency

Case No. O-NG-1412

DECISION AND ORDER ON NEGOTIABILITY ISSUE

     I. Statement of the Case

     This case is before the Authority because of a negotiability
appeal filed under section 7105(a)(2)(E) of the Federal Service
Labor - Management Relations Statute (the Statute). It concerns
the negotiability of a proposal submitted in response to the
Agency's notification that it intended to implement a
"Supervisor's Appreciation Award" in the amount of $100 to
recognize and reward employees for special contributions to
quality service and quality work products. For the reasons which
follow, we find that the Union's proposal does not conflict with
the Agency's rights to direct employees and assign work and is
within the duty to bargain.

     II. Union Proposal

     The accomplishment of the following shall automatically
entitle a bargaining-unit employee to a Supervisor's Appreciation
Award:

     A. Any bargaining-unit employee who receives an
overall-average rating of four (4) or more on any one (1)
evaluation.

     B. Any bargaining-unit employee who has served as many as
thirty days on special assignments or details during a fiscal
year and has been rated as having satisfactorily performed the
assignments or details.

     III. Positions of the Parties

     The Agency contends that this proposal conflicts with
management's rights to direct employees and assign work under
section 7106(a)(2)(A) and (B) of the Statute because it would
"establish performance standards and require the issuance of a
Supervisor's Achievement Award if those standards are met."
Agency Statement of Position at 3.

     The Union contends that its proposal does not interfere with
the Agency's rights to direct employees and assign work. It
denies that the proposal prescribes the content of performance
standards. Union Petition for Review at 1. it claims that the
proposal concerns the application of "standards established
unilaterally by the Agency." Union Response at 4.

     IV. Analysis and Conclusion

     The proposal sets forth circumstances when an employee will
be entitled to receive the Supervisor's Appreciation Award of
$100 established by the Agency. An employee automatically
receives an award under the proposal if that employee (1)
receives "an overall average rating of four (4) or more on any
one (1) evaluation" and/or (2) has served an aggregate of at
least 30  days on special assignments or details during a fiscal
year and was "rated as having satisfactorily performed the
assignments or details."

     The Agency argues that in American Federation of State,
County, and Municipal Employees, AFL - CIO, Locals, 2477 and 2910
and Library of Congress, 17 FLRA  786, 788-89 (1985) (Union
Proposals 2 and 3), the Authority held proposals like the one at
issue here to be nonnegotiable. Those proposals prescribed the
levels of achievement under the Agency's performance appraisal
system which would entitle an employee to an award. The Authority
held that the proposals were nonnegotiable because they
interfered with management's rights to direct employees and
assign work through the establishment of rewards for employee
performance. The Authority relied on its previous decision in
National Treasury Employees Union and Internal Revenue Service,
14 FLRA  463 (1984) (Proposals 5 and 6).

     We find, as explained below, that the basis for the
Authority's decision in Library of Congress has been overruled,
and the Agency has not supported its claim that the proposal
interferes with management's rights to assign work and direct
employees.

     In NTEU v. FLRA,  793 F.2d 371, 374 (D.C. Cir. 1986), the
court ruled that the management right to assign work does not
include a right to reward superior performance of work which has
been assigned and remanded the case for further proceedings.
Subsequently, based on its decision in NTEU v. FLRA,  the court,
in an unpublished memorandum decision, reversed and remanded the
Authority's decision in Department of the Navy, Northern
Division, Naval Facilities Engineering Command and National
Federation of Federal Employees, Local 1430, 19 FLRA  705 (1985).
NFFE, Local 1430 v. FLRA,  No. 85-1648 (D.C. Cir. Nov. 6, 1986).
In Naval Facilities Engineering Command, the Authority had
determined that the agency did not commit an unfair labor
practice by unilaterally changing the functions of the incentive
awards committee on which the union had a role as an observer. In
reaching that outcome, the Authority had found that the
determination of "whether certain performance warranted an
incentive award" is within management's authority to assign work
and direct employees. Id. at 707. The court reversed the
Authority's decision, stating that the basis for it had been
rejected by the court in its decision in NTEU v. FLRA. 

     Based on these two decisions of the D.C. Circuit Court of
Appeals, in American Federation of Government employees, AFL -
CIO, Local 1815 and Army Aviation Center, Fort Rucker, Alabama,
28 FLRA  1172, 1180-81 (1987), we decided that Provision 9, which
required the Agency to select an employee to serve as the union's
representative on the Incentive Awards Committee, was within the
duty to bargain. We rejected the agency's argument that
management's rights to direct employees and assign work under
section 7106(a)(2)(A) and (B) of the Statute encompass
determinations as to whether the performance of particular
employees warrants granting an award.

     In this case, the Agency established an award program and
the amount of the award. The continuation of this program is
solely at the discretion of the Agency and, as the Union notes,
its proposal does not require that this program be continued
indefinitely. Union Response at 1. Moreover, as indicated by the
record, the Agency sets the performance standards used to
determine eligibility for an award and also evaluates employee
performance in light of these standards. Consequently, the
proposal constitutes a procedure by which the awards are
granted.

     Based on the foregoing, we conclude that (1) the decision
concerning union Proposals 2 and 3 in Library of 
Congress, relied on by the Agency, is not consistent with present
case law and will no longer be followed; (2) the Agency has not
established that the Union's proposal involves management's
rights to direct employees and assign work; and (3) the proposal
is within the duty to bargain.

     V. Order

     The Agency must negotiate upon request or as otherwise
agreed to by the parties concerning the disputed proposal. 1

     Issued, Washington, D.C., January 28, 1988.

     Jerry L. Calhoun, Chairman

     Jean McKee, Member

     FEDERAL LABOR RELATIONS AUTHORITY 


FOOTNOTES

     Footnote 1 In deciding that the proposal in dispute is
within the   duty to bargain, we make no judgment as to its
merits.

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