DEPARTMENT OF COMMERCE U.S. PATENT AND TRADEMARK OFFICE ALEXANDRIA, VIRGINIA and CHAPTER 245, NATIONAL TREASURY EMPLOYEES UNION
United States of America
BEFORE THE FEDERAL SERVICE IMPASSES PANEL
|In the Matter of
DEPARTMENT OF COMMERCE
CHAPTER 245, NATIONAL
Case Nos. 04 FSIP 116/117
DECISION AND ORDER
Department of Commerce, U.S. Patent and Trademark Office, Arlington, Virginia
(PTO or Employer) and Chapter 245, National Treasury Employees Union (NTEU or
Union), filed separate requests for assistance with the Federal Service Impasses
Panel (Panel) to consider a negotiation impasse under the Federal Service
Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119.
Following an investigation of these consolidated requests, which involve the Employer's decision to implement a new performance appraisal system (PAP) for GS-13 and -14 Trademark Attorneys, the Panel asserted jurisdiction and determined to assist the parties through an informal conference with Panel Member Andrea Fischer Newman at the Panel's office in Washington, D.C. The parties were also informed that, if a complete settlement was not reached during the informal conference, Member Newman would notify the Panel of the status of the dispute, including the parties' final offers and her recommendations for resolving the impasse. After considering this information, the Panel would resolve the dispute by selecting one of the parties' final offers on a section-by-section basis, to the extent they otherwise appear to be lawful.
Pursuant to this procedural determination, Ms. Newman conducted an informal conference with the parties on November 23, 2004. Although progress was made on some issues, at the conclusion of the meeting the parties were given instructions to submit their final offers to the Panel with supporting statements of position. The parties submitted their final offers and supporting statements in accordance with the instructions. Ms. Newman has reported to the Panel and it has now considered the entire record.
The Employer's mission is to issue patents and register trademarks, and to disseminate information to the public with respect to patents and trademarks. Chapter 245 represents approximately 275 employees who work primarily as examining attorneys (GS-11 through -14) reviewing trademark applications and making recommendations on whether trademarks will be registered. The parties' collective bargaining agreement (CBA) was due to expire on January 19, 2005.
ISSUES AT IMPASSE
The parties are at impasse over portions of the following seven sections: (1) Introductory Proposals; (2) Pendency; (3) Docket Management; (4) Quality; (5) Customer Service, Organizational Effectiveness, and E-Commerce; (6) Transition; and (7) Bonus/Performance-Based Award Program.
POSITIONS OF THE PARTIES
1. Introductory Proposals
a. The Union's Position
The Union proposes the following wording:
I.) In determining an examiner's overall rating, management will consider whether an examining attorney's performance at a Fully Successful level, or better, in one or more elements or sub-elements, adversely impacts a rating in another element.
Its proposal would
ameliorate the alleged adverse impact of the new PAP, which "drastically
increases both the quality and production standards, while shortening the length
of time attorneys have to examine cases." Given these changes, there is a
concern that someone working at a Fully Successful level in one element will
struggle to meet the PAP's higher requirements in another element. Under its
proposal, managers would not be required to change an attorney's rating but only
to consider, when determining the overall rating, not penalizing him or her
"for performing well under one element of the PAP if it leads to
underperformance in another element." Finally, none of the other provisions
to which the parties have agreed covers the concept found in its proposal.
b. The Employer's Position
The Employer has no counter-proposal. In its view, the parties have already agreed to provisions in this section that "adequately address all legitimate concerns." For example, they have agreed to wording that ensures that rating officials will assign a performance rating that is fair and reasonable under the circumstances when the application of the rating system leads to an unfair or unreasonable overall performance rating, and allows the rating official to consider making adjustments for special circumstances. Requiring management additionally to consider the interplay of the performance elements when rating every employee "is unnecessary and burdensome." Moreover, the Union's proposal is "too ambiguous to be administered in any meaningful manner," will result in "employee confusion" and, given the "false expectation" it would create, "foreseeably result in numerous grievances."
Having carefully considered the arguments presented by the parties on this issue, we shall order the Union to withdraw its proposal. In our view, the Union's interests in ensuring that employees' performance ratings are fair under the new PAP are adequately addressed by the provisions the parties already have agreed to.
a. The Union's Position
The following wording is proposed by the Union in this section:
F.) In addition to those noted in the Office's proposed PAP, the following count in the balanced disposal total: 1) Final Office actions; 2) Initial review of a file taken over from another examining attorney or from a paralegal; 3) First actions denying SOU; 4) Non-final subsequent Office actions; 5) Appeal Briefs; 6) Oral arguments before the TTAB; 7) If an application is revived or reinstated, the Examining Attorney's abandonment credit.
T.) Management may grant reasonable adjustments if appropriate to production requirements for those with absences from the office due to illness, disability, maternity/paternity.
DD) Management has factored a certain amount of non-production time in determining their production model. Pursuant to NTEU's request, Management has informed NTEU of the amount of time that has been factored into their production model (see Attachment C). Where the actual time spent by an examining attorney exceeds or is not accounted for in Management's model, adjustments shall be made to the BD and FA requirements for the difference in the actual time spent above management's quarterly model for every occurrence of non-production activity within a quarter. A reduction of BD and first actions requirements may be at the rate of 1.3 for GS-14 and 1.2 for GS-13 for each hour of non-examining time above that time provided for in the model:
Leave. "Leave" includes, but is not limited to, annual leave, use or lose leave, administrative leave, sick leave, maternity/paternity leave, FMLA, holiday leave, inclement weather leave, government closure, compensatory time, approved leave without pay
Time for correcting examination, data entry or workflow errors of others
Workflow processing time (such as "TRAM", "TICRS", and "TLTIA" time)
Mandatory training, including legal lectures and electronic training modules
Time for preparing financial disclosure forms
Time for mentoring new attorneys
If Management is going to deny the foregoing adjustment, Management must provide a written explanation to the employee setting forth the reasons for the denial. The employee has the right to appeal any denial of an adjustment to the next level of supervision.
In its attempt to reduce the pendency of trademark applications, the proposed PAP raises production standards in a manner that is "unrealistic and unattainable" by moving from an hourly production system to a quarterly "balanced disposal" (BD) system. The Employer is determined to impose the new standards despite the July 2004 report of the Pendency Task Force, which included both managers and Union representatives, recommending that the Agency rescind the proposed PAP "because it does not contain attainable goals for attorneys." Because the new PAP underestimates the time spent by employees on production and non-production-related activities, the Union's proposals are necessary to ameliorate the adverse impact of the production standards. They would do so primarily by counting more intermediate steps as BDs, and reducing the number of BDs necessary to achieve a Fully Successful rating on the basis of time spent on non-production activities. The Employer's proposals, on the other hand, offer adjustments that are insufficient, and the concept of "borrowing BDs" will cause employees to go into "debt" that they likely will not be able to recover from without working unpaid overtime.
b. The Employer's Position
The Employer offers the following counter-proposals:
1) Balanced Disposal Transfers. a. During the first two weeks of the second quarter of the fiscal year, the attorney advisor may transfer up to 50 BDs from the BD totals of the first quarter to the BD totals of the second quarter or may transfer BDs to be earned in the second quarter into the first quarter. During the first two weeks of the third quarter of the fiscal year, the attorney advisor may transfer up to 50 BDs from the BD totals of the second quarter to the BD totals of the third quarter. During the first two weeks of the fourth quarter of the fiscal year, the attorney advisor may transfer up to 50 BDs from the BD totals of the third quarter to the BD totals of the fourth quarter. b. The request must be made in writing before the end of the two-week period. c. The score for the quarter will be determined once the BD transfer has been given effect. In no case may the total BDs for the year before and following the transfers differ. In the event that BDs are transferred to a previous quarter, the subsequent quarter will have a negative BD balance until such time that the attorney advisor has produced sufficient BDs. d. No BDs may be transferred if the attorney advisor's total number of BDs for the quarter is below Marginal. An attorney advisor may not transfer BDs into any quarter that the attorney advisor is subject to a performance improvement plan. No BDs may be transferred between rating years. e. The transfer of BDs is for the determination of the quarterly score only and will not be considered in connection with the level of award for which the attorney advisor is eligible. The transfer of BDs into any quarter will not be considered for a determination of eligibility for either a within grade increase or a promotion.
2) It is the responsibility of the Office to maintain the computer system in working order. If any electronic application malfunctions or fails to operate properly, it is within management's discretion to make reasonable adjustments to production requirements as appropriate.
3) Management may grant reasonable adjustments if appropriate to production requirements for those with extended absences from the office due to illness, disability, maternity/paternity, or part-time schedules.
4) Management may grant reasonable adjustments if appropriate to production requirements for mentoring, details and work projects, jury duty, and military leave.
5) Management will consider all requests for adjustments and may grant reasonable adjustments as appropriate.
The Employer's proposals, in conjunction with the provisions on which the parties already have agreed, "provide an appropriate means of addressing any adverse impact of the new PAP" regarding what work is counted and adjustments to the production requirements. In setting production standards under the new PAP, the Employer already has taken into account historical levels of non-production time, e.g., sick leave, annual leave, computer down time, training, etc., so permitting supervisors to grant reasonable adjustments to production requirements in unusual circumstances, as it proposes, is an adequate response to the Union's concerns. Moreover, the portion of its final offer that allows employees to shift a limited number of BDs between quarters of a given performance appraisal year would ensure that employees are able to take extended vacations during a quarter and still meet production goals, an interest that was expressed by the Union during bargaining.
By adding seven creditable BDs for intermediate steps in the examination process, some of which are not even counted under the current PAP, the Union's final offer undermines the new PAP's goal of granting credit only at the time of the final disposition of a case. Its adoption would encourage intermediate steps solely for the purpose of generating points, and discourage the timely processing and efficient completion of cases. Doing so also would complicate the administration of the PAP without benefiting employees, as management would simply raise the required number of BDs per quarter. Further, the Union's proposal to grant adjustments for non-production time, such as leave, mentoring, and system down time, "would be duplicative of what is built into the production rate and would have the effect of reducing the amount of work employees would be required to perform." It would also create the unnecessary burden of requiring management routinely to track each increment of time when an employee is not examining trademark applications, and undercut management's effort to move to a quarterly system.
thoroughly reviewing the evidence and arguments with respect to the issues under
this section, we are persuaded that the Employer's final offer provides the more
reasonable basis for resolving the parties' dispute. In this regard,
Management's proposal is preferable to the Union's approach, which appears to
conflict fundamentally with the premises on which the new PAP is based. That
basis is focused primarily on the efficiency of the employee in performing the
substantive work of the Agency. That objective is both a lawful and appropriate
criteria for employee evaluation. The portion of the Employer's final offer
permitting employees to shift a limited number of BDs between quarters may be of
benefit provided the opportunity is used responsibly. For all of these reasons,
we shall order the adoption of the Employer's final offer.
3. Docket Management
a. The Union's Position
The final offer of the Union is as follows:
A.) For attorneys who are handling amended dockets or are mentoring more than one trainee and these duties interfere with the examining attorneys' ability to do phone actions, the managing attorney will make sure that ratings in the docket management portion of the Performance Appraisal are adjusted to be fair, reasonable, and accurate. Similarly, the managing attorney may adjust the amended docket management deadlines from 21 to 30 days when mentoring or handling additional amended cases from the dockets of others prevent examining attorneys from reasonably meeting the 21 day deadline.
F) Notification will be provided whenever an application is removed from an attorney advisor's office or electronic docket. The notification will include the date of removal, the reason for the removal, and the name of the person removing the file. When the application file is returned to the examining attorney, the return date will be used as the date of delivery for determining all docket management deadlines.
"Removed" means, that while an application may technically remain in an examining attorney's electronic docket, it is not ready for examination.
G.) Management will consider the following list of bases and reasons that would excuse the timeliness deadlines. The following list is not all- inclusive:
a. The attorney advisor is absent on approved leave during the time available to take action; or on the day the application is due for action the attorney advisor is on approved leave;
b. The file requires scanning so that its entire contents may be displayed in TICRS and/or the file requires indexing of documents in TICRs;
d. Completion of the action is dependent upon the action of another employee, including those in management, over whom the Examining Attorney has no control (e.g., the application is out for processing by the LIE staff, scanning, etc.);
e. Electronic systems required to complete the action are unavailable.
Its proposals "are necessary to ameliorate the adverse impact of newly-imposed and shortened deadlines" in the proposed PAP. In this regard, allowing managers to adjust deadlines from 21 to 30 days when mentoring or handling additional amended cases from the dockets of others "mirrors" a provision in the "GS-14 Agreement" issued in 2000 that was reached through partnership with NTEU, and also seeks to apply this same provision to GS-13 attorneys. Since employees cannot work on files that are removed from their dockets "an extension of the processing deadlines is necessary." Notification to employees when files are removed is "critical" because the transition to a completely electronic docket means they may not otherwise know this has occurred. Identifying a non-inclusive list of reasons that deadlines may be extended also is "critically important" given the "heightened standards and shortened deadlines in the new PAP," and would ensure that employees have a reasonable opportunity to succeed under the system.
Among other things, the Employer's proposal to permit managers to extend deadlines only on a case-by-case basis when an employee is handling another employee's amended docket "conflicts with the parties' past practice as captured in the GS-14 Agreement," so it "cannot be adopted by the Panel." The Employer's omission of a requirement to notify employees when files are removed "does not fully account for the realities of the electronic docket," and its more limited grounds for granting extensions of deadlines do not adequately address the adverse impact implementation of the new standards will have on employees.
b. The Employer's Position
The Employer's proposed wording on this section is the following:
1) If an attorney advisor is handling any portion of another attorney advisor's amended docket and makes a request in advance of the deadline, the managing attorney may extend the processing times on a case-by-case basis.
4) If a file is removed from the examining attorney's electronic docket and this affects his or her ability to meet the docket management deadlines, the examining attorney should promptly bring this to management's attention. Management has the discretion to extend the processing time for the case in appropriate circumstances.
5) Supervisors may consider the following as potentially valid reasons for extending the processing times for applications:
The attorney advisor is absent on approved leave for a significant period of the time available to take action or on the day the application is due for action the attorney advisor is on approved leave due to illness, incapacity or personal emergency.
The file requires scanning so that its entire contents may be displayed in TICRS.
Completion of the action is dependent upon the action of Office personnel over whom the attorney advisor has no control, and the actions have not occurred as intended to such an extent that the ability to complete the work is hampered.
Electronic systems required to complete the action are unavailable for a significant period of the time available to take action.
In conjunction with provisions to which the parties already have agreed, for example, that all docket management deadlines will be applied in a fair and reasonable manner, its proposals are sufficient to address an employee's ability to meet deadlines when handling another employee's workload, or electronic files are removed from the employee's docket. The Employer's approach rightly puts the onus on employees to identify the specific instances where adverse impact could occur, and permits supervisors to grant extensions on a case-by-case basis. By contrast, the Union's approach creates the expectation that adjustments to deadlines will be made based on a pre-approved list of reasons, and denies management the discretion to determine appropriateness based on individual circumstances. It also would require management to adjust ratings for employees handling amended dockets or mentoring more than one trainee when these duties interfere with the employee's ability to complete telephone actions (referred to in the PAP as "examiner's amendments"). This is unnecessary because the new PAP sets reasonable standards for attaining a Fully Successful rating on this sub-element, and provides credit in advance if an employee is mentoring more than one trainee. It also is "simply not feasible or possible" for management to meet the Union's notification requirements when an electronic file is removed from an employee's docket, and mandating adjustments to processing times, even if the employee is not adversely affected when this occurs, is unwarranted. Overall, the Union's final offer requires "extensions in situations where attorneys should be able to plan their work in a way that facilitates efficient case processing."
Upon careful consideration of the issues presented under this section we are persuaded, once again, that the Union's final offer is fundamentally at odds with the basic premises that underlie the new PAP. In this regard, it attempts to ensure that employees receive extra consideration in areas that already have been accounted for under the system. The Union also has not adequately responded to the Employer's argument that it may not be possible to notify employees every time electronic files are removed from their dockets. In our view, it is more reasonable to give employees the responsibility of notifying their supervisors of specific instances where circumstances beyond their control may adversely affect their ability to meet docket management requirements, and to permit supervisors to make adjustments on a case-by-case basis. Accordingly, we shall order the adoption of the Employer's final offer. This exercise of discretion is a basic managerial right and does not enhance the discretion exercised by Management either as described in the collective bargaining agreement or through past practice.
a. The Union's Position
The Union's proposals read as follows:
B.) When an examining attorney inherits a docket that contains errors, the examining attorney will not be adversely evaluated by the errors that s/he inherited.
I.) All organizations or units involved in reviewing the work of examining attorneys shall use valid statistical methods for determining if the true error rate is within the stated standard. A three standard deviation table shall be employed. The sample size of work reviewed shall be the same for each examining attorney.
Q.) Supervisors will not pull files solely for the purposes of finding errors by the attorney advisor to be counted under the Quality element.
R.) Rating officials have the discretion not to consider errors brought to the attention of management by other examining attorneys for purposes of rating and informally by outside counsel or applicants other than through the proper procedure for protesting an action of an examining attorney with the Assistant Commissioner's Office. Rating officials may require the examining attorney to make corrections or take action for consistency.
Y.) Errors involving judgment on discretionary issues will not be counted against the examining attorney and will be used only for informational purposes. Due consideration will also be given to the discretion of the attorney advisor.
Z.) The determination as to whether an error was committed by an attorney advisor will be made by the attorney advisor's supervisor. When a finding of error is made, the supervisor will provide a written explanation of the rationale for the finding, along with an indication as to how the error came to the supervisor's attention.
HH.) Management has the discretion to consider multiple errors in a single application as no more than one quality error under the PAP.
The new PAP permits "errors discovered through any source and made at any time during the examination process" to be counted against employees, so there is "no limit to the number of cases an attorney can be evaluated on and no consistency to the process to ensure that attorneys are being evaluated on the same proportionate number of cases." At the same time, "the error rate is also much more stringent under the proposed PAP." Given these drastic changes to the current system, the Union's proposals are justified because they would ensure that the manner in which employees are evaluated is "consistent and fair." For example, wording that requires the use of valid statistical methods for determining if the true error rate is within the stated standard, and that supervisors not pull files solely for the purpose of finding errors to be counted under the Quality element, would guarantee that the error rate is accurately determined when only a portion of an employee's full output is selected for review. Similarly, it is reasonable to protect employees from having differences of opinion with supervisors regarding "discretionary judgment" counted as errors where the judgment is legally acceptable, particularly considering the impact that finding even one error could have on an employee's performance rating under the new PAP. The Employer's proposal, pertaining to "inherited errors," and the provisions previously agreed to by the parties, "are inadequate to ameliorate the impact of the increased standard."
b. The Employer's Position
The following is proposed by the Employer:
2) Management will take into consideration errors within a file previously handled by another attorney advisor. If an attorney advisor takes over an application previously assigned to another attorney advisor, managers will consider whether there was an opportunity for the attorney advisor to take corrective action on any errors. Management will further consider whether the attorney advisor, in complying with accepted office procedures and policies in processing the inherited application, should have been expected to discover the errors.
Overall, the Union's proposals unduly limit management's right to make quality assessments. Among other things, the Union would "exonerate" an attorney who takes over the amended docket of another from being adversely evaluated due to errors committed by the original attorney assigned to the case. This ignores the fact that the attorney who inherits the case often can discover the error and be expected to correct it. The Employer's proposal "strikes the appropriate balance" on this point by maintaining the right to charge an error in circumstances where it would be fair to hold the second attorney responsible.
As to the Union's proposal to use "valid statistical methods" to determine if an employee's true error rate is within the stated standard, it has not shown that this change to the status quo is needed "let alone feasible to administer." Its proposed wording also would prevent managers from holding employees accountable for all the applications they handle, regardless of how a manager learned about the error. Other wording could lead to expectations on the part of employees that certain errors they should legitimately be held accountable for may be disregarded for ratings purposes depending on how the supervisor became aware of them. Disallowing the counting of "errors involving judgment on discretionary issues" in a performance appraisal could lead to numerous grievances, and would be difficult to administer. In this regard, errors involving judgment "are still errors and they should be counted when warranted." Union Proposal Z would prohibit anyone but an employee's supervisor from determining whether an error was committed and "dictates which management official must be assigned to perform this task." Finally, the Union's proposal that supervisors should have the discretion to consider multiple errors in a single application as no more than one quality error under the PAP is unnecessary, given management's ability under the parties' CBA to assign a fair rating when the strict application of the PAP standards would result in an unreasonable one. It also may not provide employees with the appropriate incentive to do their best work, and "could hinder management's ability to hold an attorney accountable for actual errors."
Having fully evaluated the merits of the parties' positions with regard to this section, we conclude that, on balance, the Employer's final offer provides the better basis for settling their impasse. While we are sympathetic to the Union's concern about whether supervisors will evaluate employees fairly under this element, the Union has not explained sufficiently how its proposed wording regarding the use of valid statistical methods would operate. In addition, its proposal would undercut the Employer's ability to meet its stated goal of holding employees accountable for errors, regardless of how they come to management's attention. In our view, the appropriate recourse for employees who believe they have been adversely affected by management actions that are arbitrary and capricious is to exercise their rights under the negotiated grievance procedure. The Union's final offer also assumes there is always a bright line between "real" errors and those involving judgment on discretionary issues that appears unrealistic. Finally, unlike the Union's approach on how to handle situations where an employee inherits the errors of another, the Employer's final offer holds employees accountable without penalizing them. For these reasons, we shall order its adoption.
5. Customer Service, Organizational Effectiveness, and E-Commerce
a. The Union's Position
The Union proposes that "applications with substantive refusals  not be counted towards the denominator in calculating the telephone percentage in the PAP."1/ Under the new PAP, attorneys are rated on the percentage of telephone calls that they make relative to the number of cases that they handle each quarter: the higher the percentage, the better the rating. Substantive refusals, which "comprise 10 to 20 percent of the cases examined each quarter," do not require telephone calls. For this reason, an attorney's telephone percentage and, consequently, his or her ability to achieve a Fully Successful rating, would be "diluted by a fairly substantial class of cases where attorneys cannot make telephone calls" if substantive refusals are included in appraisal calculations. The Union's proposal "accounts for this reality by excluding substantive refusals from the denominator." The parties previously agreed to exclude a subset of foreign applications (section 66(a) applications) from the formula the Employer uses to set standards under this element because they too do not require telephone calls to applicants; the Union's proposal merely applies the same rationale for excluding substantive refusal cases.
b. The Employer's Position
The Employer has no counter offer. Essentially, it believes the Panel should order the Union to withdraw its proposal because, when determining the percentage of cases in which employees should contact applicants by email or telephone (known as "examiner's amendments"), management already has taken into account that not all cases are appropriate for such contact. In this connection, the new PAP requires attorneys to complete such amendments in only 15 percent of their cases to receive a Fully Successful rating, and in 35 percent of their cases to be rated Outstanding. Under the current PAP, "there are attorneys who routinely do them in over 50 percent of their cases, proving that this requirement is reasonable and attainable." As the Employer has already accounted for the Union's concern in setting the new standards, adopting its proposal would force management to raise the standard in the PAP by adjusting the percentage to reflect the fact that cases with substantive refusals are "no longer part of the equation," a result which "makes no sense and serves no purpose."
With respect to this issue, we shall order the Union to withdraw its final offer. In our view, the rationale it has provided is insufficient to overcome the fact that, in determining the standards under this element, the Employer already has taken into account that not all applications require examiner's amendments. As the Employer has stated, if the Panel were to adopt the Union's approach, it would merely exercise its right to raise the standards, thereby negating the intent of the proposal.
a. The Union's Position
In this section, the Union proposes the following:
H.) Management will consider reasonable adjustments for attorney advisors for all annual, compensatory, and credit time leave in excess of 40 hours used in any quarter the first 18 months the PAP is in effect.
I.) For the first 18 months following implementation of the PAP, the time limit for taking appropriate action on amended applications will be considered to be 30 calendar days from the date of delivery where the attorney advisor has been assigned more than 50 amended files in his/her amended docket at any one time.
K.) For the first 12 months the new PAP is in full force and effect, if an examining attorney falls below the Fully Successful level in any element that examining attorney will be evaluated under any comparable element of the 1997 PAP. The rating the examining attorney would have received under the 1997 PAP shall be considered in determining the employee's rating under the new PAP.
N.) Management will reduce balanced disposal and first action requirements during the first 12 months after the PAP is in full effect.
Its final offer, which would provide employees a reasonable adjustment period, is necessary because the new PAP "drastically changes the standards and the manner in which work is measured." In this regard, the Union's concerns that many employees will fail under the new PAP "cannot be overstated." Based on the Agency's 2003 data, if the proposed standards had been in place that year 55 percent of GS-14 employees would have been rated Marginal or below for failing to meet the "first action" requirement, and 39 percent would have been rated Marginal or below for failing to meet the BD requirements. An 18-month transition period would allow employees to use annual leave and compensatory and credit time without fear of not meeting production goals, and extending the time limit on amended applications from 21 to 30 days where employees have more than 50 amended files on their docket at any one time is warranted, given that the current PAP has no first action requirement. Requiring supervisors to assess employees under the 1997 PAP during the first 12 months the new PAP is in effect, for any element where the rating falls below the Fully Successful level, also is reasonable. This portion of its final offer is limited in scope, and only requires the 1997 rating to be considered in determining the overall rating. Finally, the Employer's final offer does not provide employees "any meaningful transition" for adjusting to the "major changes in the production and quality standards in the new PAP."
b. The Employer's Position
The following is the Employer's final offer:
1) Management will consider reasonable adjustments for attorney advisors for all annual leave in excess of 40 hours used during the first 90 days following implementation of the PAP.
4) Management will provide a progress review, upon request, between 90 and 120 days following implementation of the PAP.
5) Management will begin providing the modified examiner activity report prior to implementing the PAP.
In conjunction with a variety of other provisions the parties already have agreed upon to ameliorate any adverse impact on employees, its final offer allows them to adjust to the new PAP without unreasonably affecting their ability to take annual leave during the first 3 months after implementation. It adequately addresses any impact on employees in this regard, some of who have started planning for the changes that will occur by taking annual leave in the remaining months under the current PAP so that they do not have excessive amounts to use. The Employer's final offer also provides employees procedures which should permit them "to understand and begin adjusting" to how the new system works both before and after it goes into effect.
The Union's proposal permitting adjustments to be considered for all annual, compensatory, and credit time leave for an 18-month period, on the other hand, "goes too far" by creating an "unreasonable expectation" that management does not intend to fulfill. In addition, the portion of the Union's final offer granting automatic extensions for taking action on amended cases for the first 18 months under the new PAP, whenever employees have more than 50 amended cases in their docket, provides an incentive for attorneys "to postpone taking actions until the number hits 50," rather than "to work diligently at reducing their number of amended cases." Requiring a reduction in BD and first action requirements during the first 12 months after the PAP is in "full effect" unnecessarily delays increases in production that the Employer believes are attainable by every employee "today." Finally, the simultaneous consideration of two different standards for a 12-month period would be "cumbersome and does a disservice to both the attorneys who meet the standards and those who do not." By its terms, the Union's proposal delays the implementation of this part of the new PAP until after the Union's proposed 18-month phase-in, a "transition period that is completely unreasonable."
Having carefully considered the evidence and arguments presented by the parties on this section, we are persuaded that the Employer's final offer should serve as the basis for resolving their impasse. In its attempt to protect employees from being adversely affected by the implementation of the new PAP, it appears that the Union has proposed procedures that are unnecessarily burdensome and effectively would prevent management from realizing the benefits of the new system for an unnecessarily long period of time. In addition to the other provisions the parties have agreed to, the Employer's final offer affords employees sufficient opportunities to adjust to the new system, particularly in circumstances where they already have known about the Employer's plans for well over a year. Accordingly, we shall order the parties to adopt the Employer's final offer.
7. Bonus/Performance-Based Award Program
a. The Union's Position
Essentially, the Union proposes to reduce the amount of production-based performance awards for individual employees and create a new annual "Group Goal Sharing Award." Under its final offer, GS-13 and -14 attorneys could earn individual bonuses of up to $3,500 per quarter at the Outstanding level, and up to $1,750 per quarter at the Commendable level, for producing BDs; up to 3 percent of salary could be earned annually for an Outstanding rating on the Quality element by any attorney, prorated using a formula that requires a minimum level of examining hours per rating year. The "Group Goal Sharing Award" would be triggered by the Agency's achievement of three organizational goals. Employees who are at least Fully Successful could receive bonuses of 2 percent of annual salary under each organizational goal; they would have to work at least 625 examining hours per year to be eligible, and lesser prorated amounts would be given based on a formula using the number of examining hours worked which is less than 1,250 per year. Awards for mentoring other employees without partial signatory authority may also be granted if the employee is rated Outstanding under this element, but there is no specific requirement to be at least Fully Successful under all other critical elements. Employees would be eligible to receive Quality Step Increases (QSI) under the same criteria proposed by the Employer, but employees would have the option to choose an equivalent cash award instead.
The Employer's proposal is "nonnegotiable" because it seeks to replace all of Article 31 ("Performance Based Awards") of the CBA, not just those portions affected by the proposed PAP. Article 31, however, applies to all bargaining unit trademark attorneys at the GS-11 through GS-14 levels, but the parties' negotiations only involved PAP changes affecting GS-13 and -14 attorneys. Therefore, "the Panel cannot adopt the Agency's proposal because it applies to GS-11 and 12 attorneys and the Agency cannot bargain over GS-11 and 12s without providing notice that it intends to change their performance appraisal plans," which it has not done.
To the extent the Panel considers the "the Agency's bonus proposal," the parties' final offers "mirror" one another in many ways. The Union's new "Group Goal Sharing Award," however, would "foster an atmosphere where individuals are working together to meet the Agency's goals and when those goals are met, reward those individuals who are performing at least at the Fully Successful level," while the Employer's would not. This is consistent with the Employer's underlying rationale for changing the PAP, i.e., to align individual and organizational performance goals, missions and strategies. Significantly, "the largest award an employee could receive under either program is exactly the same," $23,000 per year (assuming a salary of $100,000). A less important difference between the final offers concerns the Union's use of examining hours for measuring productivity bonus eligibility, whereas the Employer uses BDs. While both proposals are "a measure of the same concept," the Union's use of examining hours is consistent with the way that quality bonus eligibility currently is measured, and "examining hours are easy to track by an employee's official time and attendance cards."
b. The Employer's Position
The Employer basically proposes to change the performance awards program only insofar as necessary to align it to the new PAP. In this regard, GS-13 and -14 attorneys could earn bonuses of up to $5,000 per quarter at the Outstanding level, and up to $2,500 per quarter at the Commendable level, for producing BDs. Up to 3 percent of salary could be earned annually for an Outstanding rating on the Quality element, prorated differently for GS-13 and -14 employees using a formula that requires a minimum level of BDs per rating year. Awards for mentoring other employees without partial signatory authority may also be granted, but only if the employee is rated Outstanding under this element and is at least Fully Successful under all other critical elements. Employees would be eligible to receive QSIs under the same criteria proposed by the Union, but there would be no option for the employee to choose an equivalent cash award instead.
To clarify the meaning of its final offer on this subject, the Employer "intends that all of the agreed and imposed provisions, including the bonus provisions, will apply only to GS-13 and GS-14 attorneys, since they are the only employees affected by the proposed change" in the PAP. Turning to the merits, its proposed awards system "is structured much like the current system," where employees are eligible to receive up to a total of $23,000 in productivity and quality bonuses. Although these amounts "are extraordinary for the federal government," the bonus award program has motivated many employees to exceed production and quality requirements. In proposing its final offer on this section, management has avoided any changes "which would jeopardize the positive impact" of the current award structure. At the same time, it has "no intention" of decreasing or increasing "the already-generous award amounts."
Unlike its final offer, the Union's increases award amounts and "reward[s] poor performing attorneys." In this regard, its proposed "Group Goal Sharing Award," which the parties never discussed during negotiations or mediation, would entitle every attorney to receive nearly 6 percent of salary if the Agency reaches its goals "regardless of their performance." Given the average salary of trademark attorneys, its adoption could result in total payouts of about the same amount for only one component of the Union's proposed awards plan as the Employer paid out in 2003 for the entire awards program. The Employer also is concerned about how individual employees might perform under a "radically different system" where they earn less based on individual production, more of their bonus is based on the performance of colleagues they do not control, and "everyone shares in monetary awards regardless of their contribution