---

29 FLRA NO. 19

NATIONAL TREASURY EMPLOYEES UNION

     Union

     and

NUCLEAR REGULATORY COMMISSION

     Agency

Case No. 0-NG-1250

DECISION AND ORDER 1

I. Statement of the Case

This case is before the Authority because of a negotiability appeal filed under section 7105(a)(2)(E) of the Federal Service Labor - Management Relations Statute (the Statute) and concerns the negotiability of a single proposal. For the reasons which follow, we find that the proposal is within the duty to bargain under the Statute.

II. Proposal

Section 52.1

The salary structure, that is the grade and steps of the pay schedule, being used by the NRC will be maintained. Hereafter, all employees will have their current salaries adjusted for the cost of living/comparability factor. The adjustment will be equal to the statistical adjustment recommended to the President by the Pay Advisory Council. This adjustment will become effective at the beginning of the first pay period following the announcement of it by the Council or other appropriate sources. It will be unaffected by Presidential or Congressional actions.

Section 52.2

NTEU agrees to establish with the employer a productivity committee that will monitor the impact of the new salary adjustment system and seek reasonable ways to increase the productivity of the employer, e.g., decrease employee turnover, remove work obstacles, improve upon available machines and procedures, and raise employee morale.

III. Positions of the Parties 2

The Agency argues, as a threshold matter, that the Union's petition for review was untimely filed under section 7117(c)(2) of the Statute since it was filed more than 15 days after the Agency first made its allegation of non-negotiability. The Agency disagrees with the position taken by the Authority in American Federation of Government Employees, AFL - CIO, Local 3477 and Commodity Futures Trading Commission, 21 FLRA No. 18 (1986) and American Federation of Government Employees, AFL - CIO, Local 3385 and Federal Home Loan Bank Board, District 7, Chicago, Illinois, 7 FLRA 398 (1981), that an unsolicited allegation of nonnegotiability does not serve to start the time period running for the filing of a petition for review under section 7117. The Agency urges reconsideration of this policy.

As to the merits, the Agency claims that the proposal is inconsistent with section 161(d) of the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2201, as well as management's right to determine its budget under section 7106(a)(1) of the Statute.

In response, the Union claims that the Agency has failed to substantiate its assertions that the petition for review was untimely filed and that the proposal is outside the duty to bargain. As to the former, the Union argues that in accordance with section 2424.3 of the Authority's Rules and Regulations and Authority precedent, the Agency's unsolicited allegations of nonnegotiability did not serve to trigger the time period for the filing of the petition for review. Rather, it was the Union's request for the allegation which started the time period running.

As to the Agency's arguments on the merits of the proposal, the Union claims that the Atomic Energy Act gives the Agency the discretion to negotiate. The Union states that the proposal is intended to be interpreted consistent with laws that impose limitations on pay. By way of example, the Union cites to pay limitations that are applicable to scientific and technical personnel. Finally, the Union argues that the proposal is not inconsistent with management's right to determine its budget.

IV. Analysis and Conclusion

The Agency has not advanced any persuasive reasons to warrant reconsideration of long-standing Authority policy that an unsolicited allegation of nonnegotiability does not commence the time period for filing a petition for review. We therefore reject the Agency's arguments that the Union's petition for review be dismissed on the basis that it was untimely filed.

We also find, for the reasons set forth below, that the Agency has failed to demonstrate that the proposal is either inconsistent with the cited provision of the Atomic Energy Act or section 7106(a)(1) of the Statute.

A. Alleged inconsistency with law

First, we will address the arguments made in connection with the Atomic Energy Act. The Agency cites to the following provision of that Act in support of its arguments:

General Provisions.--In the performance of its functions the Commission is authorized to--

d. appoint and fix the compensation of such officers and employees as may be necessary to carry out the functions of the Commission. Such officers and employees shall be appointed in accordance with the civil-service laws and their compensation fixed in accordance with the Classification Act of 1949, as amended, except that, to the extent the Commission deems such action necessary to the discharge of its responsibilities, personnel may be employed and their compensation fixed without regard to such laws: Provided, however, That no officer or employee (except such officers and employees whose compensation is fixed by law, and scientific and technical personnel up to a limit of the highest rate of grade 18 of the General Schedule of the Classification Act of 1949, as amended) whose position would be subject to the Classification Act of 1949, as amended, if such Act were applicable to such position, shall be paid a salary at a rate in excess of the rate payable under such Act for positions of equivalent difficulty or responsibility. Such rates  of compensation may be adopted by the commission as may be authorized by the Classification Act of 1949, as amended, as of the same date such rates are authorized for positions subject to such act. The commission shall make adequate provision for administrative review of any determination to dismiss any employee.

The Agency states that it has continued the practice of its predecessor, the Atomic Energy Commission, in exempting all positions within the Agency from coverage under civil service laws and the Classification Act of 1949, as amended. The Agency has adopted a pay system which in many respects parallels general schedule pay rates. The Agency further states that there are three restrictions placed on its pay setting authority that would preclude negotiations over the proposal.

The first restriction concerns the authority of the Agency to deviate from pay schedules to the extent such action is "necessary to the discharge of its responsibilities." The Agency argues that since the authority to make this determination rests with the Agency, it is not subject to negotiation.

The Authority has consistently held that where an agency has discretion over a matter affecting conditions of employment, the agency is obliged under the Statute to exercise that discretion by means of bargaining, unless the discretion is specifically limited by law or regulation. National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 748, 759-60 (1980). We recently have stated with regard to proposals concerning employee compensation that nothing in the Statute or its legislative history bars negotiations over such proposals where (1) the matters proposed are not specifically provided for by law and are within the discretion of the agency and (2) the proposals are not otherwise inconsistent with law, Government-wide rule or regulation or an agency regulation for which a compelling need exists. American Federation of Government Employees, AFL - CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986). 3  

We do not view the language of section 161(d) of the Atomic Energy Act which allows the Agency to deviate from pay schedules to the extent such action is "necessary to the discharge of its responsibilities" as placing a specific limitation on the Agency's discretion to bargain in this matter. In fact, the Agency has already indicated that it exempted positions from coverage under the Classification Act. Since the Agency has not identified any other specific limitation on its discretion, we find that the Agency's argument cannot be sustained.

The Agency has cited two other restrictions in the Atomic Energy Act which allegedly serve to bar negotiations on the Union's proposal. The Agency claims that there is a pay limitation applicable to scientific and technical personnel and that adoption of a 20 percent salary increase which is the effect of the proposal would cause that limit to be exceeded. In addition, for positions which are not scientific or technical, the Agency claims that a 20 percent increase would exceed the statutory maximum payable rate which is the step 10 rate for the corresponding grade under the general schedule.

The Union states that the Agency's argument that a 20 percent increase would exceed certain pay limitations and its argument concerning the amount of the increase itself are merely speculative. The Union concedes, however, that the proposal "must be interpreted consistent with law and that law does limit pay in certain ways." Union Reply Brief at 7. Accordingly, based upon the Union's stated intent, we conclude that the Agency's claim that the proposal would require that employees' pay exceed certain pay limitations cannot be sustained.

B. Alleged inconsistency with section 7106(a)(1) right to determine budget

In our view, the Agency has not demonstrated that implementation of the proposal would directly interfere with management's right to determine its budget under the test set forth in American Federation of Government Employees, AFL - CIO and Air Force Logistics Command, Wright - Patterson Air Force Base, Ohio, 2 FLRA 604 (1980), enforced as to other matters sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied sub nom. AFGE v. FLRA, 455 U.S. 995 (1982). That is, the proposal does not prescribe a particular program or operation which must be included in the Agency's budget, nor does it prescribe a particular allocation  that must be made. Rather, the proposal concerns employee salaries, an already existing item in the Agency's budget, and merely establishes a formula for adjusting such salaries. See also the decision and order on remand in National Treasury Employees Union, Chapter 207 and Federal Deposit Insurance Corporation, Washington, D.C., 28 FLRA No. 80 (1987), in which a majority of the Authority found that a proposal almost identical to the one presented here was negotiable. In that case the majority held that there was no compelling need for the agency regulation and the proposal did not conflict with the agency's right to determine its budget.

We further find that the Agency has not made a substantial demonstration that implementation of the proposal will result in a significant, unavoidable increase in costs which is not outweighed by compensating benefits. The Agency argues that in determining the costs of the proposal, the percentage pay increase recommended by the President's Pay Agent rather than the Advisory Committee on Federal Pay (two entities established by the Federal Pay Comparability Act of 1970, 5 U.S.C. 5301), should be considered. According to the Agency, a percentage increase, averaging about 20 percent over the past few years, would necessitate one of the following actions: (1) congressional approval of an increase in the Agency's budget; (2) elimination of various safety-related research programs; or (3) a reduction-in-force. The Agency also argues that even assuming a 5 percent pay increase, the figure that more closely approximates the recommendation made by the Advisory Committee on Federal Pay, the proposal would have a substantial, unavoidable impact on the Agency's ability to determine its budget.

We must reject the Agency's arguments with respect to the possible outcomes resulting from a 20 percent pay increase. The Union indicated in its submission to the Authority that the intent of the proposal is to use the figure of the Advisory Committee on Federal Pay, traditionally a much lower figure, rather than the 20 percent figure recommended by the President's Pay Agent. The Agency's sole argument with respect to the effect of the lower figure, that is, the Advisory Committee recommendation, is that adopting such an increase would have a substantial, unavoidable impact on the ability to determine its budget and result in a certain dollar cost. Such an argument does not satisfy the requirement of a substantial showing that the proposal would result in substantial and unavoidable cost increases that are not offset by compensating benefits. See Fort Stewart (Georgia) Association of Educators and Fort Stewart Schools, 28 FLRA No. 67 (1987). 

Additionally, as we noted in Fort Stewart, and previously in Fort Bragg Unit of North Carolina Association of Educators, National Education Association and Fort Bragg Dependents Schools, Fort Bragg, North Carolina, 12 FLRA 519 (1983), where a cost concern prevents parties from reaching agreement during the collective bargaining process, such concerns may be presented to the Federal Service Impasses Panel in a proceeding brought under section 7119 of the Statute to resolve a negotiation impasse.

V. Order

The Agency must upon request, or as otherwise agreed to by the parties, negotiate over the proposal. 4

Issued, Washington, D.C., September 29, 1987.

Henry B. Frazier III, Member

Jean McKee, Member

FEDERAL LABOR RELATIONS AUTHORITY 

Separate Opinion of Chairman Calhoun

I agree with my colleagues that the issues in this case are essentially the same as those in American Federation of Government Employees, AFL - CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986); and National Treasury Employees Union, Chapter 207 and Federal Deposit Insurance Corporation, Washington, D.C., 28 FLRA No. 80 (1987). In my separate opinions in those cases, I stated that in the absence of a clear expression of congressional intent to the contrary, I find that wages and monetary fringe benefits of Federal employees are not a proper subject of collective bargaining under the Statute. I found no such statements of intent in those cases, and I find none here. Accordingly, I dissent.

Issued, Washington, D.C., September 29, 1987.

Jerry L. Calhoun, Chairman 

 

FOOTNOTES

Footnote 1 Chairman Calhoun's dissent follows this opinion.

Footnote 2 The parties' arguments with respect to the negotiability of the proposal go only to Section 52.1. Section 52.2 does not appear to be in dispute and, therefore, is not specifically addressed in this decision.

Footnote 3 Eglin was initially appealed to the U.S. Court of Appeals for the Eleventh Circuit. Subsequently, the appeal was withdrawn; however, appeals of other cases which rely on Eglin are still pending before various courts.

Footnote 4 In finding the proposal negotiable we make no judgment as to its merits.

---