[ v31 p921 ]
31:0921(72)NG
The decision of the Authority follows:
31 FLRA NO. 72
31 FLRA 921
23 MAR 1988
FLRA CASE INFORMATION SHEET
AFGE, Local 3836 and Federal Emergency Management Agency
Washington, D.C., Case No. O-NG-1454 (Decided March 23, 1988)
SUBJECT MATTER INDEX ENTRIES
ASSIGN WORK
PERFORMANCE AWARDS
BUDGET
TEST FOR DETERMINING WHETHER A
PROPOSAL DIRECTLY INTERFERES WITH MGT'S RIGHT
DIRECT EMPLOYEES [ 7106(a)(2)(A)]
PERFORMANCE APPRAISAL SYSTEM
PERFORMANCE AWARDS
COMPELLING NEED
CRITERIA FOR DETERMINING COMPELLING NEED [5 C.F.R. 2424.11]
FAILURE TO ESTABLISH CONFLICT WITH AGENCY REGULATION
CODE OF FEDERAL REGULATIONS
5 C.F.R. 430.103, 430.506 [PERFORMANCE AWARDS PLANS]
CONDITIONS OF EMPLOYMENT
NON-BARGAINING UNIT EMPLOYEES
METHODS & MEANS OF PERFORMING WORK, MANAGEMENT RIGHT
PERFORMANCE APPRAISAL SYSTEM
NEGOTIABILITY PROCEDURE
TIMELINESS [7117(c)(2)]
PERFORMANCE APPRAISAL SYSTEM
AWARDS / REWARDS
UNION PARTICIPATION ON AWARDS COMMITTEE
UNITED STATES CODE
5 U.S.C. 4302(b)(4) [PERFORMANCE APPRAISAL SYSTEM]
STATUTE
7106(a)(2)(A) and (B)
7106(a)(1) and (2)
7106(b)(1)
DIGEST NOTES
This case concerns the negotiability of five proposals
submitted by the Union in response to the Agency's notification
that it intended to implement a "Performance Management System"
to recognize and reward employees for high levels of
performance.
Proposal 1 requires the Agency to allocate an amount of its
overall performance awards budget to the bargaining unit which is
not less than the Agency allocates to any other pay pool.
Proposal 2 defines the pool of employees eligible for performance
awards under the proposals as bargaining unit employees represented by AFGE, Local 3836. Proposal 3 precludes the
committee from making certain percentage determinations and from
considering promotions in determining awards. Proposal 4 requires
the performance award committee to include a member appointed
from a list submitted by the Union.
Proposals 1-4 are within the duty to bargain. Proposals 1-4:
(1) directly affect bargaining unit employees; (2) do not
interfere with management's rights to direct employees and to
determine the method and means of performing its work; and (3) do
not conflict with Agency regulations for which there is a
compelling need. In addition, Proposal 1 does not interfere with
management's right to determine its budget.
The Authority found also that the petition for review of the
Agency's allegation of nonnegotiability as to Proposal 5 was
untimely filed
31 FLRA No. 72
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, LOCAL 3836
Union
and
FEDERAL EMERGENCY MANAGEMENT AGENCY
WASHINGTON, D.C.
Agency
Case No. 0-NG-1454
DECISION AND ORDER ON NEGOTIABILITY ISSUES
I. Statement of the Case
This case is before the Authority because of a negotiability
appeal filed under section 7105(a)(2)(D) and (E) of the Federal
Service Labor - Management Relations Statute (the Statute). It
concerns the negotiability of five proposals submitted by the
Union in response to the Agency's notification that it intended
to implement a "Performance Management System" to recognize and
reward employees for high levels of performance.
We find that Proposals 1-4: (1) directly affect bargaining
unit employees; (2) do not interfere with management's rights to
direct employees and to determine the methods and means of
performing its work; and (3) do not conflict with Agency
regulations for which there is a compelling need. In addition,
Proposal 1 does not interfere with management's right to
determine its budget. Therefore, Proposals 1-4 are within the
duty to bargain. We find also that the petition for review of the
Agency's allegation of nonnegotiability as to Proposal 5 was
filed untimely.
II. Background
Under 5 U.S.C. 4302(b)(4), agencies are required to develop
performance appraisal systems which, among other things, provide
for "recognizing and rewarding employees whose performance so
warrants(.)" Regulations promulgated by the Office of
Personnel Management (OPM) require agencies to establish
performance awards plans within existing appropriated funds and
to submit these plans to OPM for review and approval. 5 C.F.R.
430.103, 430.506.
The Performance Management System (PMS) is an Agency-wide
regulation governing the issuance of performance-based awards and
was implemented pursuant to OPM regulations. Prior to
implementation of the PMS, the Agency requested the Union to
submit proposals on the implementation of the PMS. The parties
engaged in several negotiation sessions and on August 21, 19871
the Union submitted five counter-proposals.
III. Preliminary Issues
A. Timeliness of Petition for Review
On April 17, 1987, the Union submitted to the Agency, among
other proposals, a proposal which required that the performance
award committee have as a member a "PMS employee nominated by the
Union' and another proposal which required the parties to
"negotiate the (incentive award) percentages now." Union Reply to
Agency Statement of Position at 2. On July 8 and 9, 1987, the
parties met to discuss the proposals and, during the July 9
bargaining session, agreed in writing that the Agency would
"provide to the union a decision on the (PAAB) (Performance
Appraisal Advisory Board) issue and the negotiability of
performance awards percentages. If additional time (was) needed
the (Agency was to) notify the union.' Agency Statement of
Position at Exhibit 4. In a letter dated July 24, 1987, the
Agency advised the Union that (1) "(t)he Agency will offer one
(1) AFGE seat on the PAAB" and (2) the Union's "proposal relating
to negotiating the percentage of incentive awards is
nonnegotiable." Agency Statement of Position at Exhibit 5.
In a letter dated August 21, 1987, the Union submitted the
five counter-proposals which are the subject of this petition. It
noted that in the event the Agency considered the proposals to be
nonnegotiable, the Union's letter constituted an official request
for the Agency's allegations of nonnegotiability. The Agency did
not respond to this request and, on September 9, 1987, the Union
filed its petition of review.
1. Position of the Parties
The Agency argues that the petition for review is not
properly before the Authority because it was not timely
filed. The Agency asserts that it submitted allegations of
nonnegotiability to the union in its letter dated July 24, 1987,
in response to the Union's request. Accordingly, the Agency
argues that the Union's petition was filed outside the 15-day
time limit prescribed by section 2424.3 of our Regulations.
The Union argues that the July 9 agreement did not
constitute a request for a negotiability determination and that,
in any event, the allegation of nonnegotiability would not bar
the Union's petition for review in this case because the Union's
subsequent proposal is substantially different from the proposal
which the Agency alleged to be nonnegotiable.
2. Analysis and Conclusion
Under section 2424.3 of the Authority's Rules and
Regulations, a union must file a petition for review of an
allegation of nonnegotiability within 15-days of service of the
agency's written allegation. We have found that a memorandum of
understanding entered into by the parties in which they
acknowledged that the agency considered the proposed matter to be
nonnegotiable and in which the Union stated its intent to file a
petition for review constituted a written request for an
allegation and a written response to the request under section
2424.3 of our Regulations. Under such circumstances, we have held
that the petition for review must be filed within 15-days from
the date of the memorandum of understanding. American Federation
of Government Employees, AFL - CIO, National GSA Council and
General Services Administration, 21 FLRA 44 (1986); American
Federation of Government Employees, AFL - CIO, National GSA
Council and General Services Administration, 20 FLRA 448 (1985);
American Federation of Government Employees, AFL - CIO, Local
3790 and The Department of Interior, Bureau of Land Management, 7
FLRA 393 (1981).
Since Proposals 1-4 were not the subject of the Union's
written request for negotiability allegations in July, or the
Agency's written response dated July 24, 1987, there is no basis
for finding that these proposals are untimely. However, as
explained below, we find that the petition for review of Proposal
5 is untimely.
The parties agreed in writing that the Agency would provide
the Union with a decision on the "negotiability of
performance awards percentages." Agency Statement of Position at
Exhibit 4. The Agency complied with this agreement when it
forwarded a letter to the Union dated July 24, 1987, advising the
Union that its proposal concerning such percentages was
nonnegotiable. Agency Statement of Position at Exhibit 5. This
agreement-between the parties clearly constituted a written
request to advise the Union of the Agency's allegation as to the
negotiability of the proposal under section 2424.3 of our
Regulations, as in the General Service Administration cases, and
the Agency's July 24 letter constituted a written response under
our Regulations. Accordingly, the Union was required to file its
petition for review of the allegation of nonnegotiability of the
proposal alleged to be nonnegotiable within 15-days of the
Agency's July 24, 1987 letter.
Although the Union contends that its August proposal
concerning incentive award percentages is substantively different
from the proposal which the Agency alleged to be nonnegotiable in
its July letter, such a contention cannot be sustained. The
proposal set forth in the Union's letter dated August 21, 1987 is
merely a more particular restatement that does not differ
substantively from the original proposal, which the Agency had
declared nonnegotiable in its July 24 written response. While the
wording has changed, the two proposals are the same in effect.
The original proposal stated the general requirement that
the parties will cnegotiate award percentages. The proposal which
is the subject of this petition sets forth the particular
percentages which the Union seeks to negotiate and states that
failure to comply with this policy is grievable. The essence of
this proposal--to negotiate the percentages for the awards--is
the same as the proposal which the Agency alleged was
nonnegotiable. The addition of a new section concerning
grievability affected no change in the substance of the proposal.
The matter covered would be grievable in any event by operation
of the Statute's broad-scope grievance procedure, absent an
exclusion negotiated by the parties. American Federation of
Government Employees, AFL - CIO, National Council of EEOC Locals
and Equal Employment Opportunity Commission, 10 FLRA 3 (1982)
(Union Proposal 1), enforced sub nom. EEOC v. FLRA, 744 F.2d 842
(D.C. Cir. 1984), cert. dismissed, 54 U.S.L.W. 4408 (U.S. April
29, 1986) (No. 84-1728) (per curiam).
We find that the Union's petition as to Proposal 5 in this
case seeks review of the Agency's allegation of July 24, 1987,
that the percentage of incentive awards is nonnegotiable. See American Federation of Government Employees, AFL - CIO,
National Council and Genera Service Administration, 21 FLRA 44
(1986); and American Federation of Government Employees, AFL -
CIO, Local 2303 v. FLRA, 815 F.2d 718 (D.C. Cir. 1987) affirming
American Federation of Government Employees, AFL - CIO, Local
2303 and Metropolitan Washington Airports, Federal Aviation
Administration, U.S. Department of Transportation, 17 FLRA 17
(1985). Accordingly, under section 2424.3 off our Regulations,
the petition or review for Proposal 5 had to be filed within 15
days of that letter. The petition for review was not filed until
September 9, 1987. Therefore, the petition is untimely.
B. Proposals 3 and 4 Are Properly Before the Authority
The Agency argues that Proposals 3 and 4 are not properly
before us because the parties had already reached agreement on
the subject of the proposals. The Agency also claims that these
proposals are inconsistent with applicable law and regulations.
We reject the argument that these proposals are not properly
before us.
Where parties are in dispute as to whether a proposal is
inconsistent with law, rule or regulation the conditions for
review of negotiability issues have been met and a union is
entitled to a decision by the Authority as to whether the
proposal is negotiable under the Statute. This conclusion is not
altered by the existence of additional issues in the case, for
example, an alleged conflict between a proposal and a controlling
agreement. See American Federation of Government Employees, Local
2736 v. FLRA, 715 F.2d 627, 631 (D.C. Cir. 1983).
Accordingly, the Agency's allegation that a threshold duty
to bargain question exists does not preclude us from determining
whether these proposals, which are otherwise properly before us,
are within the scope of required bargaining. Issues regarding the
duty to bargain in the specific circumstances of this case should
be resolved in other appropriate proceedings such as the parties'
negotiated grievance procedure or the unfair labor practice
procedures under the Statute. See American Federation of
Government Employees, AFL - CIO, Local 2736 and Department of the
Air Force, Headquarters 379th Combat Support Group (SAC)
Wurtsmith Air Force Base, Michigan, 14 FLRA 302, 306 n.6 (1984).
IV. Proposals 1-4
Proposal 1:
i. Performance Award Budget The amount of money allocated by
the Agency for distribution as performance awards to employees in
the pool. The amount shall not be less than the highest
percentage allocated to any other pool.
Proposal 2:
m. Pool The PMS employees in the bargaining unit represented
by AFGE local 3836.
Proposal 3:
g. Incentive Awards Committee (IAC) will:
(2) Issue instructions on availability of funds and
mandatory funding levels as soon as possible but in any case not
later than June 30;
(3) Make recommendations to the Director, FEMA, for any
award amounts in excess of the percentage rate of basic pay
approved by the IAC, as stated in subparagraph 3-4b(l).
Recommendations must not exceed 20 percent of employee's base
salary.
Proposal 4:
h. Performance Appraisal Review Board (PAAB) The Board will
consist of at least six members, one of whom shall be appointed
from a list of nominees submitted by AFGE local 3836.
A. Positions of the Parties
The Agency contends that the proposals interfere with
management's rights to direct employees and to determine the
methods and means of performing work under section 7106(a)(2) and
(b)(1) of the Statute. The Agency further contends that the
proposals are outside the duty to bargain because they conflict
with Agency regulations for which there is a compelling need and
because they directly affect employees outside the bargaining
unit. The Agency also contends that Proposal 1
interferes with its right to determine its budget under section
7106(a)(1) of the Statute.
The Union contends that its proposals are limited to
payments made to bargaining unit employees and do not interfere
with management's rights. The Union also disputes the Agency's
claim that there is a compelling need for the Agency's
regulations.
B. Analysis and Conclusions
Proposal 1 requires the Agency to allocate an amount of its
overall performance awards budget to the bargaining unit which is
not less than the amount the Agency allocates to any other pay
pool. Proposal 2 defines the pool of employees eligible for
performance awards under the proposals as bargaining unit
employees represented by AFGE Local 3836. Proposal 3 precludes
the committee from making certain percentage determinations and
from considering promotions in determining awards. Proposal 4
requires the performance award committee to include a member
appointed from a list submitted by the Union.
1. The Proposals Do Not Directly Affect Non - Bargaining
Unit Employees
The Agency claims that during negotiations, the Union
attempted to negotiate incentive pay for both non-bargaining unit
and bargaining unit employees and, thus, its proposals are not
within the duty to bargain. The Union, however, states that
Proposal 2 is intended to limit the application of its proposals
to bargaining unit employees. Proposal 2 is consistent with the
Union's contention. The proposal specifically defines the pool of
employees eligible for performance awards under the proposals as
those employees in the bargaining unit represented by the Union.
Therefore, we find that Proposal 2 limits the application of the
proposals to bargaining unit employees.
The Agency further asserts that if it agreed to the
proposals, "it would be necessary to make the provisions
applicable to all PMS employees in the Region IV pay pool which
is comprised of bargaining and non-bargaining unit employees."
Agency Statement of Position at 8. We reject this assertion. The
Agency is not required to agree to these proposals, even if they
are within the duty to bargain. Moreover, while the Agency might
choose to apply the proposals to employees other than
those in the bargaining unit, the proposals do not require that
result. Accordingly, we find that the Agency has not supported
its claim that the proposals are outside the duty to bargain
because they directly affect the conditions of employment of
nonunit employees.
2. The Proposals Do Not Interfere with Management's Right to
Direct Employees
The Agency contends that its right to direct employees under
section 7106 (a) (2) (A) includes the right to motivate employees
and, thus, the right to establish incentive pay rates.
We find, as explained below, that the basis for the Agency's
claim has been rejected in our recent decisions, and that the
Agency has not established that the proposals involve
management's right to 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.
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),
remanded sub nom. 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 conclusion, 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 court decisions, 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.
Subsequently, we relied on the same reasoning in finding
negotiable a proposal concerning the circumstances when an
employee was entitled to receive a performance-based award. See
National Treasury Employees Union and Internal Revenue Service,
Indianapolis District, 30 FLRA 1170 (1988).
Similarly, the Agency has not established that the proposals
in this case affect the Agency's right to direct employees. The
proposals do not require the Agency to establish an awards
program or to continue the present program indefinitely.
Moreover, the Agency sets the performance standards used to
determine employee eligibility for an award and evaluates
employee performance in light of these standards. Consequently,
consistent with our decision in IRS, we find that the proposals
do not conflict with management's right to direct employees and
constitute negotiable procedures by which the awards are
granted.
3. The Proposals Do Not Interfere with Management's Right to
Determine the Methods and Means of Performing Its Work
The Agency asserts that the incentive pay system is a method
and means by which it motivates employees in the performance of
its personnel management work. We find that this argument is
analogous to one which we rejected in Federal Employees Metal
Trades Council, AFL - CIO, and Department of the Navy, Mare
Island Naval Shipyard, Vallejo, California, 25 FLRA 465 (1987)
on remand from Federal Employees Metal Trades Council v. FLRA,
778 F.2d 1429 (9th Cir. 1985), reversing Federal Employees Metal
Trades Council, AFL - CIO, and Department of the Navy, Mare
Island Naval Shipyard, Vallejo, California, 16 FLRA 619 (1984).
In our decision of remand, we found that a proposal which
concerned the manner in which paychecks are delivered to
employees did not interfere with management's right to determine
the methods and means of performing its work. We concluded that
the agency had not established the required nexus between
furthering the agency's mission and the matter of how paychecks
are delivered. We followed the reasoning of the U.S. Court of
Appeals for the Ninth Circuit that a contrary finding would lead
to the conclusion that because any benefit is a means of
retaining employees, all benefits constitute methods and means of
performing work. The court concluded that such a result would be
inconsistent with the Statute.
Here, the Agency has failed to establish the required nexus
between furthering the Agency's mission and the procedures which
it will use in granting performance-based awards. Consequently,
consistent with our decision in Mare Island Naval Shipyard, we
find that the Agency has failed to establish that the proposals
involve the methods and means of performing work within the
meaning of section 7106 (b) (1) of the Statute.
4. The Agency Has Not Established That the Proposals
Conflict with and Agency Regulation for Which There Is a
Compelling Need
In order to show that a proposal is nonnegotiable because it
conflicts with an agency regulation for which there is a
compelling need, an agency must (1) identify a specific
agency-wide regulation; (2) show that there is a conflict between
its regulation and the proposal; and (3) demonstrate that its
regulation is supported by a compelling need with reference to
the Authority's standards set forth in section 2424.11 of its
Regulations. Department of Health and Human Services, 21 FLRA
178, 180; American Federation of Government Employees, AFL - CIO,
Local 1928 and Department of the Navy, Naval Air Development
Center, Warminster, Pennsylvania, 2 FLRA 450, 454 (1980).
The Agency contends that pay equity is "essential to
employee morale, recruitment, employee mobility and retention"
which are necessary for the Agency to carry out its mission in an
effective and efficient manner. Agency Statement of Position at
11-12. However, the Agency fails to cite any provision of its
regulations with which the Union's proposals are in conflict.
In addition, the record otherwise fails to support a finding
that the proposals conflict with Agency regulations. The Agency
acknowledges that there are 16 separate PMS pay pools within the
Agency. Agency Statement of Position at 7-8. There is nothing in
the record to support a finding that Agency regulations require
the centralized, uniform granting of performance awards, or that
regional managers of the Agency who are responsible for issuing
performance awards must grant performance awards uniformly among
the 16 pay pools.
We find that the Agency has failed to support its allegation
that the proposals are barred from negotiations because
they conflict with internal Agency regulations for which there is
a compelling need.
5. Union Proposal 1 Does Not Interfere with Management's
Right to Determine Its Budget
In American Federation of Government Employees, AFL - CIO
and Air Force Logistics Command, Wright - Patterson Air Force
Base, Ohio, 2 FLRA 604 (1980), enforced as to other matters sub
nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir.
1981), cert. denied sub nom. AFGE v. FLRA, 455 U.S. 945 (1982),
the Authority stated that it would find a proposal inconsistent
with an agency's right to determine its budget if (1) the
proposal prescribed a particular program or an amount of funds to
be included in the agency's budget, or (2) the agency made a
substantial demonstration that the proposal would result in costs
which would not be offset by compensating benefits. The Agency
has not demonstrated that implementation of Proposal 1 would
directly interfere with management's right to determine its
budget under this test. See National Treasury Employees Union,
Chapter 245 and Department of Commerce, Patent and Trademark
Office, 30 FLRA 1219 (1988).
First, there is no showing that Proposal 1 prescribes a
particular program or operation, or an amount of funds to be
included in the Agency's budget. Under the proposal the Agency
retains the right to determine how much money is budgeted for
performance-based awards. Rather, Proposal 1 is concerned only
with the relative proportion of the total resources which the
Agency decides to devote to performance awards which will apply
to the bargaining unit.
Second, although the Agency claims that the proposal would
tend to "reduce the discretionary funds available for incentive
awards, particularly in periods of budgetary restraint," it
failed to explain, and it is not apparent from the record, how
such reduction in discretionary funds would interfere with
management's right to determine its budget. Accordingly, the
Agency has failed to establish that Proposal 1 interferes with
management's right to determine the budget under the Statute.
V. Order
The petition for review as it concerns Proposal 5 is
dismissed. Further, the Agency must negotiate upon request (or as otherwise agreed to by the parties) concerning
Proposals 1-4. 1
Issued, Washington, D.C., March 23, 1988.
Jerry L. Calhoun, Chairman
Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY
FOOTNOTES
Footnote 1 In deciding that Proposals 1-4 are within the
duty to bargain, we make no judgment as to their merits.