The main question is whether the award is contrary to the Back Pay Act (BPA),^[2] and Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 (the Balanced Budget Act).^[3] Because the Arbitrator specifically did not find a statutory or contractual violation, the BPA does not provide a basis for her award of backpay. Further, the Arbitrator did not find, and the Union does not argue, that another statute waives sovereign immunity in this case. Therefore, the award is contrary to the BPA, and we do not reach the question as to the other cited statutory provisions argued by the Agency.

The Budget Control Act of 2011^[4] required Congress to pass a budget-reduction plan by November 2011; however, Congress was unable to pass a        budget-reduction plan, triggering a process known as “sequestration,” which required across-the-board cuts to the federal discretionary budget.^[5]  In response to sequestration, the Agency implemented spending restrictions for FY 2013. With regard to its employee awards for FY 2013, the Agency proposed a process whereby employees would receive recognition for exceptional performance and contributions, but the Agency would hold in abeyance any monetary amount attached to those awards, pending the release of funding by Congress. Of the three unions who represent employees that would be affected by the Agency’s decision to implement spending restrictions, two unions reached agreement with the Agency. The third union submitted this grievance, alleging that the Agency was violating the parties’ agreement, Agency policy, regulation, and law when it suspended the          employee-awards program for FY 2013.

 

 

The Arbitrator found that the Agency did not violate the parties’ agreement when it suspended the employee-awards program due to the sequestration order. The Arbitrator also found:  “sequestration was not a normal set of circumstances and could not be ignored by the [Agency].”^[6]   Despite such, the Arbitrator ordered:  (1) that those who received outstanding performance appraisals who would have received some monetary award be “recognized” by having “such documentation” placed in their personnel records;^[7] and (2) backpay, in the form of quality-step increases, for those who were given outstanding performance appraisals for FY 2013.

 

 

 

Under §§ 2425.4(c) and 2429.5 of the Authority’s Regulations, the Authority will not consider any evidence or arguments that could have been, but were not, presented to the arbitrator.^[9] 

 

The Agency contends that the award is contrary to the BPA, and so, violates the doctrine of sovereign immunity.^[10] Though the Agency did not raise to the Arbitrator the principle of sovereign immunity, a sovereign immunity objection may be raised to the Authority without regard to whether it was raised to the Arbitrator.^[11] Accordingly, we resolve the sovereign immunity claim on the merits.

 

 

 

 

 

 

 

 

In resolving an exception claiming that an award is contrary to law, the Authority reviews any question of law raised by the exception and the award de novo.^[12] In applying a de novo standard of review, the Authority assesses whether the arbitrator’s legal conclusions are consistent with the applicable standard of law and does not assess his or her underlying reasoning.^[13]  In making that assessment, the Authority defers to the arbitrator’s underlying factual findings.^[14] To the extent that the Agency challenges the Arbitrator’s reasoning, that challenge provides no basis for finding the award contrary to law.^[15]

 

The Agency argues that the Arbitrator failed to find that the Agency violated a statutory provision or a provision of the parties’ agreement.^[16] Without such a finding, the Agency contends that it is contrary to law and in violation of the doctrine of sovereign immunity for the Arbitrator to award backpay.^[17] The Agency argues, to the contrary, that the Arbitrator explicitly found that the Agency did not violate the parties’ agreement, and remained silent on whether there was a statutory violation.^[18]

 

The Union, however, contends that the Arbitrator found that the Agency committed an unjustified or unwarranted personnel action that resulted in the reduction of the employees’ pay, allowances, or differentials.^[19] Specifically, the Union cites to the portion of the award that states:  “[I]t is the [A]rbitrator’s decision that employees in the [b]argaining unit who were given outstanding performance appraisal[s] during FY 2013[,] and were eligible for [q]uality[-s]tep [i]ncreases and had not received for that period, be awarded them.”^[20] Thus, the Union argues that the Arbitrator’s award of backpay was consistent with the BPA.^[21]

 

                An award of backpay is authorized under the BPA only when an arbitrator finds that:  (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action directly resulted in the withdrawal or the reduction of an employee’s pay, allowances, or differentials.^[22] With respect to the first requirement, the necessary element of an unjustified or unwarranted personnel action can be satisfied by a violation of applicable law,^[23] a governing agency regulation,^[24] or the parties’ agreement.^[25] 

 

                Here, the Arbitrator quoted from Office of Management and Budget (OMB) Memorandum 13-11, and invoked OMB Memorandum 13-05, in the award’s summary of the memoranda’s references to quality-step increases. However, the Arbitrator did not reach a conclusion or make any finding that the quality-step increases at issue before her were themselves mandatory.^[26] The Arbitrator then found that: “the sequestration was not a normal set of circumstances and could not be ignored by the [Agency].”^[27] Next, the Arbitrator awarded backpay for “any quality[-]step increases not [already] granted,” despite the Arbitrator’s decision that “the Agency did not violate the [parties’] [a]greement when it suspended the [employee-]awards program because of the sequestration order.”^[28] 

 

                Because the Arbitrator specifically found that the Agency did not violate the parties’ agreement and did not find that the Agency violated a law or a governing Agency regulation, the award does not include a finding that the Agency committed an unjustified or unwarranted personnel action as required by the BPA.^[29] Therefore, the Arbitrator did not have any basis under the BPA to award backpay.^[30] Further, the Arbitrator did not find, and the Union does not argue, that any law other than the BPA waives sovereign immunity in this case. Accordingly, we find the award contrary to law and grant the Agency’s exception.

 

                The Agency also argues that the award is contrary to the Balanced Budget Act, is contrary to 5 C.F.R. § 550.111, and is based on nonfact.^[31] As we set aside the award as contrary to the BPA, it is unnecessary to resolve the Agency’s remaining exceptions.^[32]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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