United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

DECISION AND ORDER

    Local 1647, American Federation of Government Employees, AFL-CIO (Union), filed a request for assistance with the Federal Service Impasses Panel (Panel) pursuant to the Federal Employees Flexible and Compressed Work Schedules Act of 1982 (Act), 5 U.S.C. § 6120 et seq., to resolve an impasse arising from a decision by Department of the Army, Tobyhanna Army Depot, Tobyhanna, Pennsylvania (Employer, Depot, or TYAD), not to establish an alternative work schedule (AWS) program as proposed by the Union.

POSITIONS OF THE PARTIES

    The Panel should find that the evidence on which the Employer bases its determination not to implement the proposed AWS program establishes that the schedule is likely to cause an adverse agency impact, as defined under the Act. The proposed schedule, if implemented, would: (1) reduce the productivity of the Employer; (2) diminish the level of service provided to its customers; and (3) increase the costs of agency operations.

    As to a reduction in productivity and service, while military actions are ongoing, implementing a comprehensive AWS program at the Depot is not prudent. In particular, the schedule would slow the "throughput" of repaired and overhauled communication equipment, antennas, and other military gear supplied to the warfighter, the Depot’s main customer in, among other places, Iraq and Afghanistan. By contrast, under the current 5/8 schedule, where all employees work from 7:30 a.m. to 4 p.m., the Depot’s productivity level is considered high.^5/ One benefit of regular hours is that supervisors, who work the same schedule as employees, are present throughout employees’ workdays to ensure they receive the next project in a timely fashion.

    Among other related and potentially detrimental effects of the Union’s AWS proposal are reductions in staffing levels and misalignment of employees’ work schedules which would affect "the flow of work through each work center in process." The comprehensive menu of schedules that the Union proposes, "with 49 starting and quitting times, five lunch periods and numerous rest periods," would reduce to 1½ hours, or 12.5 percent of each workday, the current optimal overlap between employees’ schedules. None of the other Army depots have this sort of comprehensive AWS program. Although several offer a CWS, that schedule "has been identified by the Office of the Secretary of Defense as contributing to Anniston Army Depot’s poor productivity." Furthermore, staffing levels in general would not be optimal given that 15 to 25 percent of employees would be absent on their CWS off day. Other likely difficulties include an increase in service response times to internal customers under most efficient organization (MEO) contracts won by the Departments of Public Works and Information Technology over a year ago.^6/

    Turning to the issue of costs, as an Army Working Capital Fund installation "manufacturing and operating expenses must be recovered solely through revenue generated from the sale of our products and service." In this system, care must be taken to keep costs at the fixed price charged to the Depot’s customers. Overall, based on the results of the earlier of two employee surveys that found 84 percent of the workforce would select AWS, labor costs would rise significantly.^7/ These include the cost of: (1) non-productive holiday hours, with annual losses of $406,517 (5-4/9 CWS) and $1,413,034 (4/10 CWS) for paying employees working CWS for 4 or 8 more hours, respectively; (2) increased sick leave used during longer CWS workdays, with annual losses of $833,147 and $1,766,293 per schedule, respectively; (3) fatigue allowances, as set forth in DoD Manual 5010.15.1-M Standardization of Work Measurement (DoD Manual), with annual losses of $2,416,147 and $4,783,931 per CWS, respectively; (4) delay allowances, also detailed in the DoD Manual, with annual losses of $4,067,122 under either FWS, and $4,648,140 and $9,296,280 per CWS schedule, respectively; (5) early dismissals, with annual losses of $176,629 regardless of which CWS is selected; (6) force protection, with annual losses of $125,000 regardless of which AWS option is selected; (7) MEO (Public Works and Information Technology) annual losses of $2,600,600 per FWS, and $369,260 and $741,676 per CWS, respectively; (8) food service, with annual losses of $130,555 per FWS, and $115,000 and $230,000 per CWS, respectively; and (9) supervision, with annual losses of $833,916 per FWS, and $442,290 and $884,580 per CWS, respectively. In total, cost increases would range between $7.8 and $19.6 million under the various AWS options proposed by the Union. The consequences of productivity declines described in the preceding paragraph and the costs explained immediately above would be to raise contract costs and prolong repair times. Ultimately, these effects would diminish services to the Depot’s customers, thereby also contributing to an adverse agency impact.

    The Panel should find that the Employer has not met its burden under the Act with respect to the AWS program the Union is proposing. CWS, which is in place at three of the four other Army depots, is not causing an adverse agency impact. Therefore, such schedules should be expected to work equally well at TYAD.^8/ As to comparisons of productivity among the five depots, the Employer uses direct labor yield (DLY) ratings, which are a good measure of a depot’s productivity. In this respect, the DLY rating takes into account, among other things, that each depot works on different kinds of equipment (tanks versus radios, as one example). The Employer’s attempt to link TYAD’s higher productivity level to its not having any AWS schedules, however, should not be credited. To support its claim, the Employer compares the various depots’ DLY ratings. For FY 2002, for instance, the Employer lists TYAD’s DLY as 1625, and the other four depots’ DLYs as 1528, 1530, 1437, and 1577, respectively. The Employer, however, uses the DLY rating that TYAD actually achieved in FY 2002, but misrepresents the situation by comparing that with the FY 2002 DLY predictions for the other depots. When the actual FY 2002 results are considered, TYAD actually had the lowest DLY rating, 0.62 percent above its planned hours, meaning that its productivity is the lowest of the five depots. The extent to which each of the other depots, most of which are using CWS, exceeded their planned DLY hours is: 5.24 percent at Anniston, 1.96 percent at Corpus Christi, 10.86 percent at Letterkenny, and 2.35 percent at Red River. It should be noted that Letterkenny has "the most flexible and versatile AWS program in the depot system, whereas TYAD is the only depot without any sort of AWS program whatsoever." In light of the foregoing, the appropriate question is: "[S]houldn’t it be concluded that lack of an AWS program is keeping TYAD from being as good as the other depots?"

    The Employer’s "determination of adverse impact is not based on actual experience, feasibility studies, documented facts, and/or engineered back-up studies." Beside concerns about how the Employer presents DLY comparisons, its statement of adverse agency impact contains a number of other errors and misstatements. In this regard, the Employer has not substantiated any of the problems that it alludes to at the other depots concerning CWS. In particular, the problems at the Anniston Depot noted in an FY 2000 report are attributed to the "high heat index" in that locality, rather than the schedule.

    When determining what to charge its customers, the Employer considers add-on allowances based on DoD Manual 5010.15.1-M for employee inefficiencies related to fatigue, delay, and personal and clean-up time. The Employer’s projection of the cost related to the fatigue allowance under CWS is "wrong." Based on the directives in the DOD Manual, fatigue is "a constant non-cumulating percentage of the time spent working and applies to each and every hour of the workday, regardless of whether it’s the first, middle, last or CWS hours." For this reason, "fatigue cost over each bi-weekly pay period is exactly the same, regardless of the work schedule, as long as the same total number of hours are worked." Similarly, the Employer’s cost calculations relating to "delay" are based on unsubstantiated "assumptions" because no engineered studies have been undertaken, as required by the DoD Manual, to determine the extent to which a delay factor can be applied to adjust productivity levels for the 9^th and 10^th hours, respectively, of extended CWS workdays. In this regard, the DoD Manual, Appendix II, page A-II-9, paragraph 1 provides that: "Except for the above (1% and 2% standard allowance for delay), there will be no predetermined or generally used delay allowance percent that is applied without an engineered backup study."

    The Employer exaggerates the number of schedules likely to be in use at the Depot and fails to take into account the benefits that would flow from adopting the proposed AWS program. Such benefits likely would include a net gain of between $1,967,761.02 and $3,935,522.04 from reductions in use of personal time by employees during the workday (i.e., fewer workdays mean fewer lunches, start-up, break, and clean-up interruptions). Other savings should be expected from reductions in sick leave use because employees tend to schedule doctor appointments on their off days. Inexplicably, the Employer is predicting that sick leave will rise if AWS is adopted. Furthermore, regarding service to customers, since employees on CWS work longer days, they would be available to take calls from the Depot’s customers over a more extended period each day. Another positive outcome concerns the easing of traffic congestion. Currently, under the across-the-board 5/8 schedule, the entire workforce has to enter the facility at nearly the same time, causing serious tie-ups. As to winter weather conditions, under CWS, employees tasked with snow plowing could begin clearing the Depot’s roads earlier, saving the Employer overtime costs.

    Finally, advice issued by the Office of Personnel Management (OPM) and various studies support adoption of AWS as a way to increase productivity, help attract and retain employees, and ease family life strains. This advice is essentially confirmed in positive studies that support adopting AWS. They include those described in the Harvard Business Review, and some conducted by Rutgers and Pennsylvania State University. Moreover, the Hay Group Survey of all TYAD employees, conducted in 2004, recommends, among other things, consideration of "many requests for flex-time/alternate work schedules – employees would appreciate even just a little more flexibility in their work schedules."

    Under section 6131(c)(2) of the Act, the Panel is required to take final action in favor of the agency head’s (or delegatee’s) determination not to establish a CWS only if the findings on which it is based are supported by evidence that the schedule is likely to cause an "adverse agency impact." As its legislative history makes clear, Panel determinations under the Act are concerned solely with whether an employer has met its statutory burden.

    Upon thorough examination of the evidence presented, we are not persuaded that the Employer has demonstrated that an adverse agency impact would occur under the Union’s proposal. In this regard, the Employer has not established the degree to which employees’ work is coordinated, or the necessity for overlap between employees’ work schedules. Its contentions on these points are vague, as are its descriptions of potential equipment shortages. In our view, more specificity is required to satisfy the burden of proof requirements in a case under the Act. With respect to its cost data, the additional expense the Employer links to fatigue and delay factors are questionable. Fatigue, as the Union indicates, appears to be a constant regardless of the 80-hour biweekly schedule an employee works. As to delay, the Employer’s estimates are not supported by the engineered studies the DoD Manual requires for determining how this factor should be applied to schedules other than the 5/8. The additional cost of holiday hours is the only increase over which the parties concur. That increase, however, would arise at any location that implements a CWS and may be more than compensated for by the reduction in personal time (breaks, lunches, start-up and clean-up) that occurs when employees work fewer days under a CWS.

    In addition, the Employer has not sufficiently identified differences between the mission of TYAD and the other depots to substantiate why the schedules the Union is proposing would be unsuccessful. Among other things, the Employer’s comparison of DLY rates appears flawed for the reason provided by the Union. Furthermore, its fundamental assumptions concerning the number of different AWS schedules that might ultimately be adopted significantly overstate its case. Clearly, under the Union’s proposal, supervisors need only institute a single AWS. While we are sensitive to the concerns the Employer has raised regarding the potential impact of the Union’s proposal on its vital mission in support of the nation’s war efforts, our conclusion that the requirements of the Act have not been met, consistent with the Act’s legislative history, permits the Employer to raise those same concerns directly with the Union in negotiations.^9/ When they return to the bargaining table, we urge the parties to engage in a genuine dialogue concerning their legitimate interests to arrive at an AWS program tailored to the specific needs of the TYAD workplace.

ORDER

    Pursuant to the authority vested in it by the Federal Employees Flexible and Compressed Work Schedules Act, 5 U.S.C. § 6131(c), the Federal Service Impasses Panel under § 2472.11(b) of its regulations hereby orders the parties to negotiate over the Union’s proposal for an alternative work schedule program.

[4]/   5 U.S.C. § 6131(b) defines adverse agency impact as:

(1) a reduction in the productivity of the agency;

(2) a diminished level of the services furnished to the public by the agency; or

 (3) an increase in the cost of operations (other than a reasonable administrative cost relating to the process of establishing a flexible or compressed work schedule).

The burden of demonstrating that the implementation of a proposed CWS is likely to cause an adverse agency impact falls on the employer under the Act.  See 128 CONG. REC. H3999 (daily ed. July 12, 1982) (statement of Rep. Ferraro); and 128 CONG. REC. S7641 (daily ed. June 30, 1982) (statement of Sen. Stevens).

[5]/   TYAD is the most productive of the five Army depots and, as a consequence, charges its customers the most reasonable rates of any depot.  As an example, with material costs excluded, in FY 2003, TYAD’s hourly labor rate was $70.09.  For the same year, rates at the other depots were $89.50, $116.20, $107.70, and $122.50, respectively.

[6]/ The MEO contracts were established with the 5/8 schedule as a baseline.  The Employer predicts that costs in this area could rise by $369,260 annually as a result of changing from a set 5/8 schedule.

[7]/   The two employee surveys discussed by the parties are:  (1) the FY 2001 Army Civilian Attitude Survey and (2) the Hay Group Employee Satisfaction Survey, conducted in May 2004 with results issued in June 2004.

[8]/   The Union describes those schedules as follows:  (1) Letterkenny permits a mix of 5-4/9, 4/10 and 5/8 schedules with staggered off days; (2) Corpus Christi dropped its CWS, but retains a staggered work schedule; (3) since 1994, Anniston has allowed a 5-4/9 and closes every other Friday; and (4) Red River has a 4/10 schedule and is closed every Friday (Red River temporarily suspended the schedule after 9/11, but has now restored the 4/10).  The Depot’s parent organization, U.S. Army Communications-Electronics Command (CE-COM) permits AWS at two locations.  In addition, at Redstone Arsenal, an AWS program allows 5/8, 5-4/9 and 4/10 schedules, and a flexitour.  Finally, both the U.S. Army TACOM Detroit Arsenal and Fort Bragg permit a mix of schedules.

[9]/    If an employer fails to meet the burden of proof:

the Panel will direct the parties to return to the bargaining table and to continue negotiations on an alternative work schedule (128 Cong. Rec. H3999, daily ed. July 12, 1982) (statement of Rep. Ferraro).  See also S. Rep. No. 97-365, 97^th Cong., 2d Sess. 15-16 (1982).