UNITED STATES
DEPARTMENT OF VETERANS AFFAIRS
VETERANS CANTEEN SERVICE
HOUSTON, TEXAS
(Agency)
and
AMERICAN FEDERATION
OF GOVERNMENT EMPLOYEES
LOCAL 1633
(Union)
0-AR-4818
_____
DECISION
September 10, 2012
_____
Before the Authority: Carol Waller Pope, Chairman, and
Ernest DuBester, Member
I. Statement of the Case
The Agency filed an exception to an award of Arbitrator Otis H. King under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority’s Regulations. The Union filed an opposition to the Agency’s exception. The Arbitrator found that the grievance concerning the removal of a Veterans Canteen Service (VCS) employee was arbitrable and that the grievant’s removal was not for just cause. For the reasons that follow, we grant the Agency’s exception and set aside the award.
II. Background and Arbitrator’s Award
The grievant, a non-preference eligible excepted service (NEES) employee, worked at the VCS. Award at 1. The Agency removed her from her position for being absent without leave and “having excessive absenteeism.” Id. at 3. The Union filed a grievance concerning the grievant’s removal. Id. The matter was unresolved and was submitted to arbitration. At the hearing, the Agency argued that the issue was not arbitrable because the grievant, a VCS employee appointed under 38 U.S.C. § 7802(e), had no right to challenge her removal under the negotiated grievance procedure of the parties’ agreement.[1] Id. at 4. The Agency did not present evidence or argument regarding the merits of the grievance. Id.
The Arbitrator found that the parties’ agreement, standing alone, provides VCS employees “the power to formally grieve issues, including termination, through the negotiated grievance procedure.” Id. at 9; see also id. at 8. But the Arbitrator determined that the case law on the issue was “conflicting.” Id. at 9.
The Arbitrator noted that the Agency’s General Counsel had determined that employees appointed under § 7802(e) cannot arbitrate their removals through the grievance process. Id. The Arbitrator found the General Counsel’s reasoning “strained and contradictory” because the opinion permitted VCS employees to appeal and arbitrate certain adverse actions,[2] including reductions in grade or pay and furloughs of thirty days or less, but did not permit VCS employees to appeal or arbitrate the “most serious adverse action of all,” their termination. Id. at 9-10. The Arbitrator also believed that the General Counsel had misinterpreted § 7802(e). Id. at 10. According to the Arbitrator, the term “personnel” in the second sentence of that provision refers to positions, not persons. Id. Thus, the Arbitrator found that the Agency may reduce the number of positions “without regard to the provisions of [T]itle 5,” but may not terminate individual “employees . . . without the availability of a mechanism to challenge the propriety of that action.” Id. at 10-11.
After noting that his decision was not dependent on this interpretation of § 7802(e), the Arbitrator summarized an administrative law judge’s decision in United States Department of Veterans Affairs, Veterans Canteen Service, Case No. BN‑CA‑08‑0183 (2011) and an arbitrator’s award in United States Department of Veterans Affairs, Veterans Canteen Service, Dayton, Ohio, Federal Mediation and Conciliation Service (FMCS) Case No. 110428‑02505‑6 (2012).[3] Id. at 11‑12. Although the Arbitrator noted that the Agency’s argument against “jurisdiction appear[ed] to be on point,” he found that much of the case law upon which the Agency relied involved an employee’s ability to appeal to the Merit Systems Protection Board (MSPB). Id. at 13. According to the Arbitrator, even assuming these cases applied to the grievance process, it would be “nonsensical” to allow VCS employees to grieve “every issue related to his or her employment except removal.” Id. Moreover, the Arbitrator stated, if Congress had intended to “absolutely prohibit VCS employees from grieving” their removals, then it could have clearly done so. Id. The Arbitrator found that, because the statute and case law are unclear, he was “compelled to rule that the [g]rievant may appeal through the negotiated grievance procedure.” Id. Addressing the merits, the Arbitrator found that the Agency had failed to establish that it had just cause for the grievant’s removal and sustained the grievance. Id. at 17.
III. Positions of the Parties
A. Agency’s Exception
The Agency maintains that the Arbitrator’s conclusion that he had jurisdiction to decide the merits of the grievant’s removal because VCS employees appointed pursuant to 38 U.S.C. § 7802 may grieve their removals is contrary to law. Exception at 7; see also id. at 6. In this regard, the Agency argues that, based on the language of § 7802, in conjunction with legislative history, VCS employees are prohibited from appealing their removals to the MSPB and thus similarly are precluded from grieving their removals. See, e.g., id. at 12‑15. Also, the Agency contends that, because the Supreme Court in Cornelius v. Nutt, 472 U.S. 648 (1985) (Nutt) held that arbitrators should apply the same substantive standards as the MSPB when adjudicating the merits of adverse actions, an arbitrator’s jurisdiction over such matters is dependent upon the MSPB’s jurisdiction. Id. at 8; see also id. at 15. Moreover, the Agency asserts that, because VCS employees are in the excepted service, the Arbitrator lacked jurisdiction to decide the merits of the grievant’s removal. Id. at 15‑16.
In addition, the Agency claims that, for purposes of § 7121(e), VCS employees are not part of an “other personnel system,” but, rather, are included in the general civil service (civil service). Id. at 17-22. Specifically, the Agency argues that it does not consider itself as part of an “other personnel system.” Id. at 19. The Agency asserts that “VCS field employees necessary for the transaction of the business at the canteens,” such as the grievant, “are subject to all personnel provisions of Title 5[,] . . . except for appointment, compensation[,] and removal” and are entitled to various benefits, such as disability compensation. Id. at 19 (emphasis omitted); see also id. at 21 (arguing also that § 7802 does not prevent VCS employees from grieving minor adverse actions or other conditions of employment). Moreover, the Agency contends that, while Congress allowed the Department of Veterans Affairs (VA) to create an “other personnel system” for Title 38 employees in the Veterans Health Administration (VHA), the exclusion in § 7802 is much narrower than “the laws applicable to many . . . Title 38 employees” in the VHA. Id. at 21. According to the Agency, unlike 38 U.S.C. § 7421, which grants the Secretary of the VA the right to prescribe by regulation the conditions of employment of many employees within the VHA, § 7802 contains no such language. Id. at 21.
B. Union’s Opposition
The Union argues that the grievance concerns the termination of a VCS employee, which constitutes either a matter covered under 5 U.S.C. § 7512 or a similar matter which arises under an “other personnel system.” Opp’n at 2-3. As a result, the Union claims that the Authority lacks jurisdiction under § 7121(f) of the Statute to consider the Agency’s exception. Id. at 2, 3.
However, the Union maintains that, if the Authority finds that it has jurisdiction, the award is not contrary to law. See id. at 3. Specifically, the Union contends that, because the grievant is an NEES employee within the meaning of § 7511(a)(1)(C) and an “employee” within the meaning of § 7103 of the Statute, the grievant is covered by the parties’ agreement. Id. at 8‑9. The Union also asserts that the Arbitrator properly relied on the decisions in Case No. BN-CA-08-0183 and FMCS Case No. 110428-02505-6 and that the Arbitrator’s decision is supported by United States Department of Veterans Affairs, Veterans Canteen Service, Martinsburg, West Virginia, 65 FLRA 224 (2010). Id. at 4-6. Moreover, the Union argues that Bennett was decided wrongly, id. at 10 n.8, but that, even if the Authority disagrees and finds that the grievant does not have appeal rights to the MSPB, VCS employees are in an “other personnel system” pursuant to § 7121(e), e.g., id. at 10 n.8, 15 n.13, and thus do not lack grievance rights, see, e.g., id. at 9-10.
In addition, the Union contends that the Agency’s reliance on Nutt is misplaced because the Supreme Court did not find that, if the MSPB lacks jurisdiction over an adverse action, an arbitrator also lacks jurisdiction over that action. E.g., id. at 11. Similarly, the Union contends that the Agency improperly relies on the Supreme Court’s decision in United States v. Fausto, 484 U.S. 439 (1988) (Fausto) and its progeny because the holdings in those cases were undercut when Congress amended the Civil Service Reform Act to give NEES employees MSPB appeal rights pursuant to § 7511(a)(1)(C). Id. at 13-14; see also id. at 13 n.10. Furthermore, the Union asserts that an Office of Personnel Management (OPM) regulation, 5 C.F.R. § 752.401(d)(12), is invalid and that the Authority owes it no deference. Id. at 15 n.14.
IV. Preliminary Matter: The Authority has jurisdiction to consider the Agency’s exception.
The Authority issued an Order to Show Cause (Order), directing the Agency to demonstrate why it should not dismiss its exception for lack of jurisdiction under § 7121(f) of the Statute. Order at 1-2. The Agency filed a response, asserting that the Authority has jurisdiction to resolve its exception because, based on precedent, “the claim involved . . . is not reviewable by the MSPB or the Federal Circuit.” Agency Response at 4; see also id. at 7. Conversely, as noted previously, the Union, in its opposition, claims that the Authority lacks jurisdiction over the Agency’s exception because the “grievance . . . clearly pertains to a [§] 7121(f) matter.” Opp’n at 3.
Under § 7122(a) of the Statute, the Authority lacks jurisdiction to review an arbitration award “relating to a matter described in § 7121(f)” of the Statute. U.S. Envtl. Prot. Agency, Narragansett, R.I., 59 FLRA 591, 592 (2004). The matters described in § 7121(f) “are those matters covered under 5 U.S.C. §§ 4303 and 7512 and similar matters that arise under other personnel systems.” Id. Moreover, in determining whether it lacks jurisdiction, the Authority looks not to the outcome of the award, but to whether the claim advanced in arbitration is one reviewable by the MSPB and, on appeal, by the Federal Circuit. See AFGE, Local 1013, 60 FLRA 712, 713 (2005).
Here, consistent with the Authority’s decision in United States Department of Veterans Affairs, Veterans Canteen Service, 66 FLRA 944 (2012) (VA, VCS), VCS employees appointed pursuant to § 7802(e) are excluded from the provisions of Chapter 75 of Title 5, including § 7512. See 5 C.F.R. § 752.401(d)(12) (stating that the requirements of Chapter 75 of Title 5 pertaining to adverse actions do not apply to “[a]n employee whose agency or position has been excluded from the appointing provisions of [T]itle 5 . . . by separate statutory authority in the absence of any provision to place the employee within the coverage of [C]hapter 75 of [T]itle 5”); see also Bennett, 635 F.3d at 1216, 1221 (concluding that VCS employees appointed under § 7802(e) are excluded from the provisions of Chapter 75 of Title 5 and thus are barred from appealing their removals to the MSPB). As a result, because the grievant is a VCS employee appointed under § 7802(e), her removal is not “covered under” § 7512. Bonner v. Dep’t of Veterans Affairs Pittsburgh Healthcare Sys., 477 F.3d 1343, 1346 (Fed. Cir. 2007) (concluding that the grievant’s removal was “not ‘covered under’ 5 U.S.C. § 7512 because . . . the provisions relating to adverse actions in [C]hapter 75 of [T]itle 5, including § 7512, d[id] not apply to him”); see also U.S. Dep’t of Def., Office of Dependents Sch., 45 FLRA 1411, 1414 (1992) (finding that, because the grievant was not an employee within the meaning of § 7511, her termination was not a matter covered under § 7512).
Moreover, as discussed further in VA, VCS, VCS employees appointed under § 7802(e) are not part of an “other personnel system,” but rather, are part of the personnel system which is applicable to civil service employees and is governed by Title 5. VA, VCS, 66 FLRA at 949‑50. Thus, the grievant’s removal is not a similar matter arising under an “other personnel system.” U.S. Small Bus. Admin., 33 FLRA 28, 36 (1988) (concluding that, because temporary employees are not part of an “other personnel system” within the meaning of § 7512(f), the grievant’s termination was not a similar matter arising under an “other personnel system,” and the Authority had jurisdiction to review the merits of the grievant’s termination). Accordingly, we find that the award concerning the grievant’s removal does not relate to a matter described in § 7121(f), and the Authority has jurisdiction to resolve the Agency’s exception to the award. See NTEU, Chapter 193, 65 FLRA 281, 283 (2010) (addressing the union’s exceptions because the removal of a probationary employee did not relate to a matter described in § 7121(f) of the Statute).
V. Analysis and Conclusion: The grievance concerning the removal of a VCS employee is not arbitrable as a matter of law.
When an exception involves an award’s consistency with law, the Authority reviews any question of law raised by the exception and the award de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing U.S. Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying the standard of de novo review, the Authority assesses whether an arbitrator’s legal conclusions are consistent with the applicable standard of law. See U.S. Dep’t of Def., Dep’ts of the Army & the Air Force, Ala. Nat’l Guard, Northport, Ala., 55 FLRA 37, 40 (1998). In making that assessment, the Authority defers to the arbitrator’s underlying factual findings. See id.
The Agency asserts that the Arbitrator’s determination that he had jurisdiction over a grievance concerning the removal of a VCS employee is contrary to law. Exception at 7. In this regard, the Agency claims that, because VCS employees cannot appeal their removals to the MSPB, they cannot grieve their removals pursuant to a negotiated grievance procedure. See id. at 7-17. The Agency also maintains that VCS employees appointed pursuant to § 7802(e) are not in an “other personnel system,” but, rather, are part of the civil service. See id. at 17-22. The Union disagrees, but contends that, even if the grievant does not have appeal rights to the MSPB, the grievant is in an “other personnel system” and thus does not lack grievance rights. See, e.g., Opp’n at 10 n.8.
These issues and arguments are identical to those raised in VA, VCS, 66 FLRA at 948‑49. As discussed in Section IV., supra, consistent with the Authority’s decision in VA, VCS, the 1982 amendments to the VCS Act, and the 1990 Amendments in conjunction with 5 C.F.R. § 752.401(d)(12), demonstrate that NEES employees appointed under § 7802(e) are not afforded appeal rights under Chapter 75 of Title 5. They are therefore precluded, by law, from appealing their removals to the MSPB. Id. at 949. Also, as the Authority determined, employees who are precluded from appealing adverse actions to the MSPB, such as VCS employees, are prohibited from grieving such actions under a negotiated grievance procedure. Id. Moreover, as the Authority held, VCS employees are not part of an “other personnel system” and § 7121(e) of the Statute does not, by itself, grant parties the right to grieve. Id. As a result, the Arbitrator, as a matter of law, lacked jurisdiction over the grievance concerning the removal of a VCS employee appointed under § 7802(e).
Therefore, consistent with our decision in VA, VCS, we conclude that the Arbitrator’s determination that he had jurisdiction, as a matter of law, over the grievance is contrary to law. See id.
VI. Decision
The Agency’s exception is granted, and the award is set aside.
APPENDIX
Section 7121(e) of the Statute states:
(e)(1) 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. Similar matters which arise under other personnel systems applicable to employees covered by this chapter may, in the discretion of the aggrieved employee, be raised either under the appellate procedures, if any, applicable to those matters, or under the negotiated grievance procedure, but not both. An employee shall be deemed to have exercised his option under this subsection to raise a matter either under the applicable appellate procedures or under the negotiated grievance procedure at such time as the employee timely files a notice of appeal under the applicable appellate procedures or timely files a grievance in writing in accordance with the provisions of the parties' negotiated grievance procedure, whichever event occurs first.
(2) In matters covered under sections 4303 and 7512 of this title which have been raised under the negotiated grievance procedure in accordance with this section, an arbitrator shall be governed by section 7701(c)(1) of this title, as applicable.
5 U.S.C. § 7121(f) states:
(f) In matters covered under sections 4303 and 7512 of this title which have been raised under the negotiated grievance procedure in accordance with this section, section 7703 of this title pertaining to judicial review shall apply to the award of an arbitrator in the same manner and under the same conditions as if the matter had been decided by the Board. In matters similar to those covered under sections 4303 and 7512 of this title which arise under other personnel systems and which an aggrieved employee has raised under the negotiated grievance procedure, judicial review of an arbitrators, award may be obtained in the same manner and on the same basis as could be obtained of a final decision in such matters raised under applicable appellate procedures.
5 U.S.C. § 7511 states, in pertinent part:
(a) For the purpose of this subchapter--
. . . .
(C) an individual in the excepted service (other than a preference
eligible)–
(i) who is not serving a probationary or trial period under an
initial appointment pending conversion to the competitive service; or
(ii) who has completed 2 years of current continuous service in
the same or similar positions in an Executive agency under other than a temporary appointment limited to 2 years or less[.]
. . . .
5 U.S.C. § 7512 states:
This subchapter applies to –
(2) a suspension for more than 14 days;
(5) a furlough of 30 days or less;
but does not apply to--
(A) a suspension or removal under section 7532 of this title,
(B) a reduction-in-force action under section 3502 of this title,
(C) the reduction in grade of a supervisor or manager who has not
completed the probationary period under section 3321(a)(2) of
this title if such reduction is to the grade held immediately before
becoming such a supervisor or manager,
(D) a reduction in grade or removal under section 4303 of this title,
or
(E) an action initiated under section 1215 or 7521 of this title.
38 U.S.C. § 7802(e) states:
(e) Personnel. – The Secretary shall employ such persons as are necessary for the establishment, maintenance, and operation of the Service, and pay the salaries, wages, and expenses of all such employees from the funds of the Service. Personnel necessary for the transaction of the business of the Service at canteens, warehouses, and storage depots shall be appointed, compensated from funds of the Service, and removed by the Secretary without regard to the provisions of title 5 governing appointments in the competitive service and chapter 51 and subchapter III of chapter 53 of title 5. Those employees are subject to the provisions of title 5 relating to a preference eligible described in section 2108(3) of title 5, subchapter I of chapter 81 of title 5, and subchapter III of chapter 83 of title 5. An employee appointed under this section may be considered for appointment to a Department position in the competitive service in the same manner that a Department employee in the competitive service is considered for transfer to such position. An employee of the Service who is appointed to a Department position in the competitive service under the authority of the preceding sentence may count toward the time-in-service requirement for a career appointment in such position any previous period of employment in the Service.
5 C.F.R. § 752.401 states, in pertinent part:
(a) Adverse actions covered. This subpart applies to the following actions:
(2) Suspensions for more than 14 days, including indefinite suspensions;
(5) Furloughs of 30 days or less.
. . . .
(d) Employees excluded. This subpart does not apply to:
. . . .
(12) An employee whose agency or position has been excluded from
the appointing provisions of title 5, United States Code, by
separate statutory authority in the absence of any provision to
place the employee within the coverage of chapter 75 of title 5,
United States Code[.]
. . . .
[1] The text of the relevant statutory and regulatory provisions is set forth in the appendix to this decision.
[2] For purposes of this decision, a “disciplinary action” is defined as a suspension of fourteen days or less, and an “adverse action” is defined as a removal, a suspension of more than fourteen days, a reduction in pay or grade, or a furlough of thirty calendar days or less. See 5 U.S.C. §§ 7502, 7512.
[3] The Authority recently issued decisions regarding these matters. See U.S. Dep’t of Veterans Affairs, Veterans Canteen Serv., Dayton, Ohio, 66 FLRA 983 (2012); U.S. Dep’t of Veterans Affairs, Veterans Canteen Serv., 66 FLRA 944 (2012).