73 FLRA No. 174                                                                                                         

 

UNITED STATES

DEPARTMENT OF VETERANS AFFAIRS

JAMES A. HALEY

VETERANS HOSPITAL AND CLINICS

(Agency)

 

and

 

AMERICAN FEDERATION

OF GOVERNMENT EMPLOYEES

LOCAL 0547

(Union)

 

0‑AR‑5845

 

_____

 

DECISION

 

June 5, 2024

 

_____

 

Before the Authority:  Susan Tsui Grundmann, Chairman,

and Colleen Duffy Kiko, Member

(Member Kiko concurring)

 

I.    Statement of the Case

 

Arbitrator David V. Breen issued an award (1) finding a grievance concerning an employee’s (the grievant’s) performance appraisal procedurally arbitrable and (2) granting the grievance on the merits.  Specifically, the Arbitrator found that the Agency violated the article in the parties’ agreement governing performance appraisals (Article 27).  As a remedy, he directed the Agency to raise the grievant’s performance rating.  The Agency filed exceptions to the award on nonfact, essence, and contrary‑to‑law grounds.  In particular, the Agency argues that the award unlawfully interferes with its management rights to assign work and direct employees under § 7106(a)(2) of the Federal Service Labor-Management Relations Statute (the Statute).[1]  Because the Union demonstrates Article 27 – as interpreted and applied by the Arbitrator – is enforceable under § 7106(b)(2) of the Statute, and we find that the awarded remedy reasonably correlates to the Agency’s violation of Article 27, we deny the Agency’s management-rights exception.  For the reasons that follow, we also deny the remaining exceptions because they do not demonstrate the award is deficient.

 

II.     Background and Arbitrator’s Award

 

The grievant is an Advanced Medical Support Assistant (AMSA) at an Agency clinic, and assists patients with scheduling and other matters related to seeing medical‑care providers.  Before 2021, the Agency consistently rated the grievant’s performance as “[e]xceptional” in all elements, resulting in annual “overall” ratings of “[o]utstanding.”[2]  The grievant’s supervisor changed and, on November 18, 2021, the new supervisor rated the grievant as “[f]ully [s]uccessful” for the “Scheduling Process and Procedures” element (the scheduling element), which resulted in an overall rating of fully successful.[3]  The appraisal contained no explanation for the rating.

 

On December 16, 2021, the grievant emailed her supervisor and several others in her supervisory chain, requesting an explanation for the scheduling element’s rating.  When the grievant received no response, she contacted her supervisor again on December 21, 2021.  The grievant’s supervisor responded she would provide the results of an audit of the grievant’s work on which the rating was based (the scheduling audit).  On December 21, 2021, the Union filed a grievance, alleging the Agency failed to provide “any counseling or direction” to the grievant “for a mark down on the critical element,” and seeking to have the grievant’s overall rating “upgraded” to “outstanding.”[4]  The matter proceeded to arbitration.

 

The parties did not stipulate to an issue, and the Arbitrator did not expressly frame one.  However, as the Arbitrator described, the parties disputed both the grievance’s timeliness and its merits.

 

As to timeliness, the Arbitrator cited Article 43, Section 7 of the parties’ agreement (Article 43).  Article 43 states an employee or the Union must present a formal grievance “to the immediate or acting supervisor, in writing, within [thirty] calendar days of the date that the employee or Union became aware, or should have become aware, of the act or occurrence; or anytime if the act or occurrence is of a continuing nature.”[5]  The Arbitrator found that, for the reasons he stated in his merits analysis (discussed further below), the Agency “violated Article 27, Performance Appraisal of the Master Agreement [(Article 27)] . . . during the 2021 performance[-]appraisal year and thereafter.”[6]  Relying on the grievant’s December 2021 communications with her supervisor, the Arbitrator determined the grievance was timely because it was filed when the grievant knew “the Agency was not going to rectify promptly its ongoing . . . violations” of Article 27.[7]

On the merits, the Agency argued it had implemented a rule requiring AMSAs to enter certain scheduling information in a comment field (scheduling rule), and that a failure to do so constituted an error.  According to the Agency, the grievant’s failure to follow the scheduling rule resulted in scheduling-audit errors that lowered her accuracy rate to 83.78 percent – below the ninety percent threshold required for an exceptional rating in the scheduling element.[8]  Although the Agency argued the scheduling rule was contained within a 2016 Agency directive, the Arbitrator found there was no evidence the Agency directive included the scheduling rule.[9]  He also noted the supervisor’s admission that she did not know whether there was an actual rule, but that she considered the scheduling rule to be “common sense.”[10]  The Arbitrator found the Agency produced no evidence supporting the supervisor’s assertions that she instructed the grievant about the scheduling rule or that AMSAs received training on the rule.   

 

The Arbitrator credited the grievant’s testimony that her previous supervisor never informed her of the scheduling rule; that she was never cited during any previous audits for failing to follow the rule; and that the first time she even became aware of the rule was during the arbitration hearing.  The Arbitrator noted that, nevertheless, the Agency charged the grievant for violating the rule in the scheduling audit at issue.[11]

 

The Arbitrator concluded the Agency never trained the grievant on the scheduling rule or told her that “she must abide” by it and that failure to follow it would affect her rating on the scheduling element.[12] 

 

The Arbitrator also “adopted,” as his own findings, arguments from the Union’s post‑hearing brief concerning the Agency’s violations of Article 27.[13]  In doing so, he cited Section 1, which states the parties’ “interest in improving” performance is achieved by “providing employees with frequent feedback” and identifying areas and action “for improved performance.”[14]  The Arbitrator further found that Section 2 requires performance appraisals be “fair and objective” and “measure actual work performance,”[15] and that Section 3 requires that performance appraisals be “fair, equitable, and strictly related to job performance.”[16]  Additionally, he cited Sections 4 and 9, which require the Agency to provide “on-going” feedback to “improv[e] employee performance” through progress reviews and informal, “candid, forthright dialogues between the supervisor and employee(s) aimed at improving the work product.”[17]  The Arbitrator also noted that Section 6 requires the Agency to communicate any change in the performance standards to employees.  He adopted the Union’s argument that Article 27 requires that “employees understand how their job performance relates to the criteria being measured.”[18]  The Arbitrator further cited Section 5’s requirement that, in addition to providing employees their performance plans, the agency provide “[a]dditional information regarding performance expectations . . . sufficient to assist the employee in achieving the ‘[e]xceptional’ level.”[19]

 

The Arbitrator found the grievant “did not get any of th[e] benefit” of the communication those provisions require, because “[s]he received no ongoing feedback and no guidance” about the scheduling rule and therefore, her rating “came to her as a complete surprise.”[20]  The Arbitrator also found the grievant “was met with silence and stonewalling” when she sought “clarification” about her lower rating on the scheduling element.[21]  In this regard, the Arbitrator credited the Union’s assertion that “when [the grievant] appeared at her [a]rbitration in this matter – seven months after she received her performance review – she still did not know why her scheduling accuracy [rating] was suddenly so much lower than before or what she could do to improve it.”[22]  Based on the foregoing findings, the Arbitrator concluded the Agency “violated Article 27.”[23]

 

As remedies, the Arbitrator directed the Agency to change the grievant’s rating in the scheduling element to exceptional, raise her overall rating to outstanding, and make her whole “for any loss of earnings that may have resulted had she been rated properly.”[24]

 

On November 21, 2022, the Agency filed exceptions to the award.  On April 27, 2023, the Union filed an opposition to the Agency’s exceptions.[25]

 

III.    Analysis and Conclusions

 

A.           The Agency does not demonstrate the award is based on nonfacts.

 

The Agency alleges the award is based on several nonfacts.[26]  To establish that an award is based on a nonfact, the excepting party must establish that a central fact underlying the award is clearly erroneous, but for which the arbitrator would have reached a different result.^[27]  However, the Authority will not find an award deficient where the parties disputed the alleged nonfact before the arbitrator,^[28] and disagreement with an arbitrator’s evaluation of evidence, including the weight to be accorded such evidence, does not establish that an award is based on a nonfact.^[29]  The Authority also rejects nonfact exceptions that challenge alleged findings that an arbitrator did not actually make.[30]  Additionally, an arbitrator’s contractual interpretations cannot be challenged as nonfacts.^[31]

 

First, the Agency claims the Arbitrator’s timeliness determination was based on his erroneous finding that the grievance “challenged an ongoing violation rather [than] a discrete act or occurrence.”^[32]  According to the Agency, the grievance challenged only the grievant’s November 18, 2021 performance appraisal, and therefore needed to be filed within thirty days of the appraisal date in order to be timely.[33]  However, Article 43 requires grievances be filed “within [thirty] calendar days of the date that the employee or Union became aware” of the challenged act or occurrence.[34]  The Arbitrator concluded the Agency’s violations of Article 27 included actions it took after issuing the performance appraisal,[35] and that the grievant timely filed once she became aware that the Agency was not going to “rectify promptly” its ongoing violations.[36]  The Agency’s argument merely challenges the Arbitrator’s interpretation of the parties’ agreement and evaluation of the evidence, neither of which provides a basis for finding the award based on a nonfact.[37]

 

Next, the Agency argues the award is based on nonfacts “to the extent the [a]ward may be construed to assert that the Agency violated all seven sections of Article 27.”[38]  Specifically, the Agency asserts that record evidence contradicts any finding that it violated Article 27, Sections 2, 5, 6, and 9, and the Arbitrator’s findings that the Agency violated those sections are based on facts which “evidence conclusively refutes” or the “Arbitrator found to be false.”[39]  The Agency further alleges the Arbitrator ignored “overwhelming evidence” that the grievant’s scheduling-audit score was “accurate,” thereby undermining the Arbitrator’s finding that the Agency violated Article 27, Section 2’s requirement that performance appraisals measure “actual work performance.”[40] 

 

To support these arguments, the Agency relies on portions of the award in which the Arbitrator summarized the Agency’s arguments, and a page in the hearing transcript where, it argues, the Arbitrator accepted that the grievant’s accuracy score was below the required threshold for a higher rating.[41]  However, the Arbitrator did not adopt the facts alleged in the Agency’s arguments.  Therefore, the Agency’s arguments do not identify any specific findings the Arbitrator actually made.[42] 

The Agency also contends the Arbitrator “refused to hear further evidence” showing that the grievant’s accuracy rate on the scheduling audit fell below ninety percent because he found it to be “cumulative” insofar as the grievant’s deficiency had already been established.[43]  However, in the portion of the hearing transcript the Agency cites to support this assertion, the Arbitrator – in the course of rejecting the Agency’s proffered testimony concerning the audit findings – stated that “[i]t’s already been established” that “the Agency defines” the error rate at ninety percent.[44]  Moreover, the record indicates the Arbitrator excluded the testimony based on the Union’s objection that the Agency had “with[eld] [the audit findings] until the last minute.”[45] 

 

Because the Agency’s arguments challenge the Arbitrator’s weighing of the evidence, or allege findings that the Arbitrator did not make, they do not demonstrate the award is based on a nonfact.[46]  Further, to the extent the Agency’s argument challenges the Arbitrator’s interpretation of Article 27, as stated above, such challenges provide no basis for finding an award deficient on nonfact grounds.[47]

 

We deny the Agency’s nonfact exception.

 

B.           The Agency does not demonstrate the award fails to draw its essence from the parties’ agreement.

 

The Agency argues the Arbitrator’s timeliness determination fails to draw its essence from Article 43.[48]  The Authority will find an award is deficient as failing to draw its essence from a collective-bargaining agreement when the appealing party establishes the award:  (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purposes of the agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement.[49]  Mere disagreement with an arbitrator’s interpretation and application of an agreement does not provide a basis for finding an award deficient.[50]

 

As noted above, Article 43 states an employee or the Union must present a formal grievance “to the immediate or acting supervisor, in writing, within [thirty] calendar days of the date that the employee or Union became aware, or should have become aware, of the act or occurrence; or anytime if the act or occurrence is of a continuing nature.”[51]  Again, the Agency argues that the grievance challenged only the November 18 performance appraisal, and that, therefore, Article 43 required the Union to file the grievance within thirty days of November 18, 2021.  The grievance alleged the Agency failed to provide “any counseling or direction” to the grievant “for a mark down on the critical element,”[52] and the Arbitrator interpreted this as challenging Agency actions beyond just the appraisal.  Specifically, the Arbitrator found the December 21 grievance timely because:  (1) the Agency’s violations of Article 27 spanned beyond the appraisal period, including when the supervisor failed to respond to the grievant’s questions about her rating; and (2) December 21, 2021, was the date upon which “the [g]rievant knew that the Agency was not going to rectify promptly its ongoing . . . violations.”[53]  The Agency merely argues for its preferred interpretation and application of Article 43, but provides no basis for finding the award is irrational, unfounded, implausible, or in manifest disregard of the parties’ agreement.  As such, we reject the Agency’s essence argument.[54]

 

C.           The award does not violate management’s rights to assign work or direct employees.

 

              The Agency asserts the Arbitrator’s finding that it violated Article 27,[55] and the remedy directing the Agency to raise the grievant’s rating,[56] are contrary to law because they violate management’s rights to assign work and direct employees under § 7106(a)(2) of the Statute, and “do[] not enforce a contract provision negotiated under § 7106(b)” of the Statute.[57]  When resolving a contrary‑to‑law exception, the Authority reviews any question of law raised by the exception and the award de novo.[58]  Applying a de novo standard of review, the Authority assesses whether the arbitrator’s legal conclusions are consistent with the applicable standard of law.[59]  In making that assessment, the Authority defers to the arbitrator’s underlying factual findings unless the excepting party establishes they are nonfacts.[60]

 

After the Agency filed its exceptions, the Authority issued an order permitting the parties to file supplemental briefs addressing the Authority’s revised test for resolving management-rights exceptions, articulated in Consumer Financial Protection Bureau (CFPB).[61]  Both parties filed timely briefs.

 

Under the four‑part CFPB framework, the first question is whether the excepting party establishes that the arbitrator’s interpretation and application of the parties’ agreement, and/or the awarded remedy, affects a management right.^[62]  If the answer to that question is yes, then the Authority will move to the second question under CFPB.  That question asks whether the arbitrator correctly found, or the opposing party demonstrates, that the pertinent contract language – as interpreted and applied by the arbitrator – is enforceable under § 7106(b).^[63]  However, in CFPB, the Authority noted that “if it is clear that the [contract provision] is enforceable under § 7106(b), then the Authority may assume, without deciding, that the interpretation and application of the [provision] and/or the awarded remedy ‘affects’ a management right.”[64] 

 

As discussed previously, the Arbitrator based his awarded remedy upon his finding that the Agency violated several subsections of Article 27.  We assume, without deciding, that the Arbitrator’s interpretation and application of Article 27 affects management’s rights to direct employees and assign work.[65]  However, for the following reasons, we find Article 27 – as interpreted and applied by the Arbitrator – is enforceable under § 7106(b) of the Statute.

 

As an initial matter, the Agency asserts the award does not enforce a provision negotiated under § 7106(b), because the Arbitrator did not “identify, with reasonable specificity, which contract provisions [the Agency] . . . violated and how.”[66]  However, the Authority considers an arbitrator’s award and the record as a whole when determining whether an award is contrary to law,[67] and has applied this principle to reject similar specificity arguments.[68]  Therefore, the Agency’s assertion that the award lacked the requisite specificity does not, by itself, demonstrate that the award fails to enforce a provision negotiated under § 7106(b).[69] 

 

Further, the Arbitrator found Article 27, Sections 1, 4, and 5 require the Agency to communicate performance standards and provide employees “continuing” feedback for improving performance, including information on how to achieve an “exceptional” rating.[70]  Additionally, the Arbitrator found Section 3 requires appraisals to be “fair” and “equitable.”[71]  The Arbitrator concluded the grievant did not get the benefit of these provisions, because the Agency never trained her on the scheduling rule, never told her that she needed to follow it, and never told her that failure to follow the rule would result in her being charged with errors that would lower her rating in the scheduling element.[72]

 

The Union asserts these Article 27 requirements are enforceable procedures under § 7106(b)(2).[73]  In its exceptions, the Agency states that it “is not disputing that Article 27 . . . correctly interpreted, includes provisions negotiated under [§] 7106(b).”[74]  Moreover, the Agency does not argue that the award fails to draw its essence from Article 27.[75]  In its supplemental brief – relying solely on the specificity argument we have rejected above – the Agency asserts that the Union cannot demonstrate that the award enforces a provision negotiated under § 7106(b).[76]  However, for the following reasons, we find the Union demonstrates that the provisions on which the Arbitrator relied are – as interpreted and applied by the Arbitrator – enforceable exceptions to management’s rights.

 

The Union argues that Article 27, as interpreted and applied by the Arbitrator, concerns procedures management officials will observe during the performance‑evaluation process, but does not infringe on management’s rights to set performance standards or evaluate performance under those standards.[77]  When determining whether a contract provision involving performance discussions constitutes a procedure under § 7106(b)(2), the Authority has noted that agencies have a statutory duty to bargain over “procedures which management officials will observe in the development and implementation of performance standards.”[78]  Consistent with this principle, the Union correctly asserts[79] that the Authority has found provisions requiring an agency to conduct performance discussions with employees, including communicating expectations and problems, are enforceable procedures.[80] 

 

It is undisputed that the Agency used the scheduling rule to measure the grievant’s performance.[81]  Thus, the Arbitrator’s interpretation and application of Article 27 – requiring the Agency to inform the grievant of, and train her on, the scheduling rule before using it to measure her performance – is similar to proposals and provisions the Authority has previously found to constitute procedures under § 7106(b)(2).[82]  Moreover, as noted previously, the Agency does not argue that the award fails to draw its essence from Article 27.[83]  Accordingly, we find the Union has demonstrated that Article 27, as interpreted and applied by the Arbitrator, is enforceable under § 7106(b)(2).[84]  As such, the answer to the second CFPB question is yes.[85]

 

The third CFPB question is whether the excepting party challenges the remedy separate and apart from the underlying contract violation.[86]  The Agency asserts that the remedy directing it to raise the grievant’s rating is contrary to its management rights because it does not reflect the grievant’s actual performance or relate to any contract violation.[87]  Therefore, the answer to the third CFPB question is yes.

 

The fourth CFPB question is whether the Agency demonstrates the remedy fails to reasonably correlate to the enforced provision, as interpreted and applied by the Arbitrator.[88]  Based on his findings, the Arbitrator directed the Agency to change the grievant’s rating on the scheduling element from “[f]ully [s]uccessful” to “[e]xceptional,” and – consequently – to upgrade the grievant’s overall rating to “[o]utstanding.”[89] 

 

The Agency argues this remedy does not reasonably correlate to Article 27, claiming the Arbitrator “strongly suggested” the grievant’s actual work did not warrant the higher rating.[90]  However, as discussed previously, the Arbitrator made no finding to that effect.  The parties do not dispute either (1) that the Agency charged the grievant with audit errors for failing to follow the scheduling rule; or (2) that the grievant’s rating in the scheduling element was derived directly from her scheduling audit accuracy rate.[91]  At arbitration, the Agency asserted that the grievant’s failure to follow the scheduling rule brought her accuracy rate below the threshold accuracy rate for the higher rating in the scheduling element.[92]  However, the Arbitrator concluded that the grievant should not have been charged with those audit errors, because the Agency’s use of the scheduling rule to rate her performance violated Article 27.[93]  Taken as a whole, the Arbitrator’s findings support a conclusion that, but for the Agency’s improper reliance upon the scheduling rule to rate the grievant, she would have received an exceptional rating in the scheduling element.[94]

 

Based on these findings, we find the Arbitrator’s directions that the Agency change the grievant’s rating on the scheduling element – and, consequently, to upgrade the grievant’s overall rating to “[o]utstanding” – reasonably correlate to his conclusion that the Agency violated Article 27.  Therefore, the answer to the fourth CFPB question is no.

 

We find the Agency does not demonstrate that the award violates the cited management rights.  Therefore, we deny the Agency’s contrary-to-law exception.

             

IV.     Decision

 

We deny the Agency’s exceptions.

 

 

Member Kiko, concurring:

 

I agree with the decision in all respects.  In challenging the lawfulness of the Arbitrator’s remedy, I note that the Agency cites1 U.S. Department of the Treasury, Office of the Comptroller of the Currency (Comptroller).2  In Comptroller, the Authority found that an award directing a higher performance rating violated management rights where the arbitrator expressly rejected the notion that his rating remedy was based on evidence of the grievant’s performance.3  In contrast, here, the Arbitrator’s findings demonstrate that because the grievant consistently received an exceptional rating in the scheduling element in prior years, and the grievant’s scheduling audit accuracy rate would have earned her an exceptional rating if she were not charged with errors for violating the scheduling rule of which she was unaware, the Arbitrator’s rating remedy is supported by evidence of the grievant’s performance.  Accordingly, Comptroller is distinguishable.4   

 

Generally, I believe that supervisors – not arbitrators – should have the final say on an employee’s performance rating.  Having assigned the employee duties, communicated performance expectations, and observed the employee’s performance for an entire performance period, supervisors are best qualified to rate employee performance.  Moreover, the Authority has repeatedly held that evaluating employee performance is an exercise of management’s rights to direct employees and assign work.5  Thus, in some performance-rating arbitration cases, the only appropriate remedy will be to remand the matter to the agency to reassess the employee in a manner that complies with the parties’ agreement, as interpreted and applied by the arbitrator.  However, in rare situations like this, where the arbitrator has sufficient evidence of the grievant’s performance to make a specific finding, an arbitrator’s designation of a particular performance rating to remedy a contract violation does not violate § 7106 of the Federal Service Labor-Management Relations Statute.6