The main, substantive question before us is whether the award is contrary to various provisions of law because no law authorizes or requires the Agency to pay retroactive transit subsidies. Because the Federal Employees Clean Air Incentives Act (the Incentives Act)^[1] and the Back Pay Act (the BPA)^[2] support the award, we find that the answer is no.

 

                Under the Incentives Act, Congress authorized all federal agencies to establish transit-subsidy programs.^[3] The Incentives Act provides for cash reimbursements to employees if transit passes are not “readily available for direct distribution by the agency.”^[4]  Executive Order 13,150 requires all federal agencies in the national capital area to implement transit-subsidy programs,^[5] and also requires that those agencies provide transit benefits to qualified employees in amounts equal to their commuting costs, not to exceed the maximum non-taxable amount allowed by 26 U.S.C. § 132(f)(2), which is part of the Internal Revenue Code.^[6]

 

                Before the enactment of the American Taxpayer Relief Act of 2012 (ATRA),^[7]the maximum non-taxable amount allowed by § 132(f)(2)(A) in 2012 was           $125 per month. On January 2, 2013, ATRA amended § 132(f)(2)(A) to retroactively increase the maximum amount of non-taxable transit benefits from $125 to    $240 per month for 2012, and, as relevant here, increased the maximum amount of non-taxable transit benefits for January 2013 to $245.

 

 

 

The Arbitrator found that in Article 53, Section 2 of the parties’ agreement, the Agency committed to “offer a monthly benefit to employees equal to their actual qualifying monthly commuting costs, but not to exceed the maximum amount authorized by applicable laws, [e]xecutive [o]rders[,] and regulations governing public[-]transportation benefits for federal employees.”^[8] As relevant here, she reasoned that, once ATRA amended § 132(f)(2)(A) to retroactively increase the maximum non-taxable subsidy amounts, the Agency was obligated to reimburse employees who had incurred eligible transit expenses above the previous, maximum non-taxable amount of $125. To support her interpretation of ATRA, the Arbitrator cited a report by the Joint Committee on Taxation that “sets forth a general explanation of tax legislation enacted in the [112th] Congress.”^[9] Specifically, she set forth the following wording from that report:

 

 

 

Additionally, the Agency argued that it lacked authority under § 203 of ATRA, the Purpose Statute,^[11] the bona‑fide‑needs rule (described in Section IV. below),^[12] and the Antideficiency Act^[13] to make retroactive payments. In response, the Arbitrator stated that “[t]o say that applicable law(s) a, b, and c do not expressly authorize said retroactive payments does not prove that there are no other applicable laws, rules[,] or regulations that do authorize them.”^[14] She also stated that “to say that applicable law(s) a, b, and c do not expressly authorize retroactive payments for prior fiscal years does not prove that they do not impliedly authorize them.”^[15]

Further, the Arbitrator noted that in               U.S. Department of HHS (HHS),^[16] the Authority held that an arbitration award ordering an agency to pay retroactive transit subsidies was not contrary to the BPA and, in so holding, found that transit benefits are pay, allowances, or differentials within the meaning of the BPA.^[17] Additionally, the Arbitrator found that cash reimbursements for improperly denied transit subsidies are consistent with, and authorized by, the BPA.^[18]

 

The Arbitrator concluded that the Agency violated the parties’ agreement,^[19] and she sustained the grievance in pertinent part. As a remedy, she directed the Agency to make affected employees whole, including interest, by establishing a claims process through which individual employees may certify eligible expenses incurred and receive cash reimbursements.

 

 

 

The Agency argues that cash reimbursements for transit expenses are not authorized by law and that, consequently, the award is contrary to law.^[20] The Union contends that the Authority should dismiss these arguments under § 2429.5 of the Authority’s Regulations because the Agency failed to raise them before the Arbitrator.^[21]

 

Under §§ 2425.4(c) and 2429.5 of the Authority’s Regulations, the Authority will not consider any arguments that could have been, but were not, presented to the arbitrator.^[22] At arbitration, the Agency argued that it had no authority to make retroactive payments under applicable law.^[23] Thus, we find that      §§ 2425.4(c) and 2429.5 do not bar the Agency’s arguments.

 

 

 

                As stated previously, the Agency argues that the award is contrary to law.^[24] According to the Agency, the award “misinterprets the Appropriations Clause” of the U.S. Constitution (the Appropriations Clause)^[25] and the rule that payment of money from the U.S. Treasury must be authorized by a statute.^[26] In this connection, the Agency contends that there is no authority for federal agencies to provide employees with retroactive cash reimbursements for transit subsidies.^[27] The Agency discusses three statutory provisions in this regard.

                First, the Agency claims that § 132(f)(2)(A), as amended by ATRA, governs the calculation of federal income taxes, but “does not provide legal authority for any federal agency to provide public[-]transportation subsidies to its employees.”^[28] And the Agency contends that the Joint Committee on Taxation’s report “does not constitute congressional authority to spend funds from the U.S. Treasury.”^[29]

                Third, the Agency claims that the BPA provides no authority for retroactive cash reimbursements “because it is not applicable to this situation.”^[31] In this regard, the Agency asserts that it is undisputed that from January 2012 to January 2013, the Agency had no authority to pay over $125 per month.^[32] Thus, the Agency claims, “there was no violation of Article 53 that . . . resulted in withdrawal or reduction of pay or benefits at that time that would have invoked the [BPA].”^[33] According to the Agency, the BPA “could only be invoked later[,] once it was found by an appropriate authority that an unjustified or unwarranted personnel action occurred; however, the Agency was never authorized to issue retroactive cash reimbursements.”^[34] The Agency also argues that, because the BPA does not apply, and no other statute waives the government’s sovereign immunity in this case, the award of retroactive cash reimbursements is contrary to the doctrine that the federal government is immune from suits for money damages unless a federal statute waives that immunity (the doctrine of sovereign immunity).^[35]

 

                Additionally, the Agency challenges the Arbitrator’s assertion that the parties’ agreement provides explicit authorization authority for retroactive cash reimbursements.^[36] In particular, the Agency contends that, under the Appropriations Clause and the Purpose Statute, only a statute – not a collective-bargaining agreement – can authorize the payment of funds from the U.S. Treasury.^[37] 

 

                Finally, citing the Antideficiency Act, the Purpose Statute, and the bona-fide-needs rule, the Agency asserts that appropriations, or funds available for obligation, during one fiscal year may not be used to cover obligations incurred in previous or subsequent fiscal years.^[38] According to the Agency, the Arbitrator erred in finding that the Agency was “contractually mandated to pay the reimbursements in [f]iscal [y]ear 2013 regardless of in which particular fiscal year the expenses arose.”^[39] The Agency alleges that, under the Arbitrator’s reasoning, “Congress, by enacting the amendment to [§ 132(f)(2)(A)], legally committed the United States to make cash payments to all federal employees to cover the additional amount of expenses [that] they may exclude from their taxable income” – an alleged result that the Agency contends is “illogical” and “contrary to law.”^[40]

                When an exception involves an award’s consistency with law, the Authority reviews any question of law de novo.^[41] In conducting de novo review, the Authority assesses whether the arbitrator’s legal conclusion – not his or her underlying reasoning – is consistent with the relevant legal standard.^[42]

 

Any disbursement of appropriated funds must be authorized by statute.^[43] In this regard, the Appropriations Clause provides that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”^[44]  And the Purpose Statute provides that “[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.”^[45] 

 

Further, the bona-fide-needs rule provides that federal agencies may obligate annual and multi-year appropriations only to meet legitimate or bona fide needs that arise during the time when the appropriations are available for obligation.^[46] And the Antideficiency Act precludes an agency from expending funds: (1) in excess of those appropriated for the fiscal year in which the expenditure is made; and (2) prior to their appropriation.^[47]

 

                In HHS, the Authority held that the Incentives Act “constitutes explicit [c]ongressional authorization for agencies to provide funds for transit subsidies.”^[48] In this connection, the Authority stated that the Incentives Act “permits agencies to subsidize personal commuting expenses,” and that “[o]ptions under the subsidy program include transit passes, including cash reimbursements.”^[49] These holdings are consistent with multiple Comptroller General decisions that have found that the Incentives Act authorizes agencies to provide employees transit subsidies and reimbursements for commuting via public transportation.^[50]  

 

Moreover, although the Incentives Act states that cash reimbursements are authorized only when vouchers or similar items that may be exchanged for transit passes are not “readily available,”^[51] the Authority has held that cash reimbursements are permissible to remedy “subsidies already foregone.”^[52] And there is no prohibition on agencies using money in one fiscal year to reimburse employees for transit subsidies that were unpaid in a previous fiscal year. In this regard, the Comptroller General has stated, as relevant here:

 

Thus, under Comptroller General precedent, the Incentives Act itself provides the necessary authorization for the Agency to pay transit expenses on an ongoing basis, and it was unnecessary for the Arbitrator to rely on any other authority for finding such authorization. We note that decisions of the Comptroller General are not binding on the Authority,^[54] but that the Authority has stated that those opinions serve as “expert opinion[s] that should be prudently considered.”^[55] There is no apparent basis for declining to rely on the Comptroller General’s opinion on this issue, particularly as it is consistent with the Arbitrator’s award and not challenged by the parties. Thus, we find that the Incentives Act provides a sufficient basis for the Arbitrator’s conclusion that the Agency was authorized to pay retroactive transit subsidies.

 

                With regard to whether the Agency was required to provide transit subsidies, the Arbitrator found that the Agency was contractually obligated to do so.^[56] Under the BPA, an award of backpay is authorized when an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action resulted in the withdrawal or reduction of the employee’s pay, allowances, or differentials.^[57] A violation of a  collective-bargaining agreement is an unjustified or unwarranted personnel action under the BPA.^[58] Here, the Arbitrator found such a violation,^[59] and the Agency has not argued that this finding fails to draw its essence from the agreement. Thus, the first requirement of the BPA is met.

 

With regard to the second BPA requirement, the Arbitrator found that “impacted employees were adversely affected by” the contract violation “in that the Agency failed to reimburse said employees for qualifying transit expenses as required by” Article 53 of the parties’ agreement.^[60] And, as the Arbitrator noted,^[61] in HHS, the Authority held that transit subsidies are pay, allowances, or differentials within the meaning of – and thus recoverable under – the BPA.^[62] Accordingly, the second requirement of the BPA is met, and the BPA supports the Arbitrator’s finding that the Agency is required to pay the grievants backpay.

 

                Further, the Agency argues that the award is contrary to the doctrine of sovereign immunity.^[63] But the BPA is a waiver of sovereign immunity,^[64] and as the award satisfies the requirements of the BPA, it is not contrary to the doctrine of sovereign immunity.

 

 

                The Agency challenges the Arbitrator’s reliance on § 132(f)(2)(A), as amended by ATRA,^[65] and her statement that the parties’ agreement provides explicit authorization for retroactive transit subsidies.^[66] As stated previously, in conducting de novo review, the Authority assesses whether the arbitrator’s legal conclusion – not his or her underlying reasoning – is consistent with the relevant legal standard.^[67] As the Incentives Act and the BPA support the Arbitrator’s conclusion, the Arbitrator’s other reasoning – even if deficient – provides no basis for finding the award deficient. Accordingly, we find it unnecessary to determine whether the Arbitrator’s other reasoning is deficient.

 

 

 

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