[ v62 p411 ]
62 FLRA No. 78
UNITED STATES
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
(Agency)
and
NATIONAL TREASURY
EMPLOYEES UNION, CHAPTER 19
(Union)
0-AR-4154
_____
DECISION
May 9, 2008
_____
Before the Authority: Dale Cabaniss, Chairman and
Carol Waller Pope, Member
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator Richard G. Higgins filed by the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions.
The Arbitrator found that the Agency violated the parties' agreement by unilaterally ending an established past practice of granting employees four hours of administrative leave to attend Employee Appreciation Day each year. As a remedy, the Arbitrator ordered the Agency to continue the practice until it satisfies its bargaining obligations with the Union.
For the following reasons, we deny the Agency's exceptions.
II. Background and Arbitrator's Award
Since the mid-1990s, the Agency had granted employees up to four hours of administrative leave annually to attend Agency-sponsored awards ceremonies and Employee Appreciation Day events. Such events previously included a lake cruise, a picnic, a movie day, and a scavenger hunt, and employees were allowed to invite their family members and friends to participate. See Award at 8. In 2005, the Agency unilaterally ended its practice of granting administrative leave for employees to attend these events without giving the Union notice or an opportunity to bargain. As relevant here, the Union filed a grievance alleging that the Agency unilaterally changed a condition of employment without fulfilling its bargaining obligation by changing an established past practice of granting administrative leave for Employee Appreciation Day. See id. at 2-3. The unresolved grievance was submitted to arbitration. As the parties could not agree on the issue to be resolved, the Arbitrator framed the issue as: "What shall be the disposition of the grievance?" Id. at 2.
As an initial matter, the Arbitrator rejected the Agency's argument that the awards ceremonies and the Employee Appreciation Day events were "separate and distinct[.]" Id. at 38. According to the Arbitrator, the two were "part and parcel of a single event." Id. The Arbitrator also found that the Agency had granted administrative leave to attend Employee Appreciation Day events "since the mid-1990s with the full knowledge of both parties on a consistent and regular basis." Id. at 41. As such, the Arbitrator found that "the granting of four hours of administrative time for attendance at Employee Appreciation Day events is an established condition of employment which cannot be unilaterally terminated." Id.
Relying on AFGE, Local 2761 v. FLRA, 866 F.2d 1443 (D.C. Cir. 1989), the Arbitrator rejected the Agency's claim that granting administrative leave for Employee Appreciation Day was not a condition of employment. Specifically, the Arbitrator cited the court's holding that the agency's practice of permitting employees to attend an agency-sponsored picnic during work hours was a condition of employment. The Arbitrator found that this case was "on point" with the case before him because "in each case[,] government employees, during their normal work day, were being paid while engaged in other-than-work activities in remarkably similar circumstances . . . ." Id. at 40. According to the Arbitrator, both the picnic at issue in AFGE, Local 2761 v. FLRA and the Employee Appreciation Day at issue here were designed to "foster a productive work relationship between employees and management[,]" which increased employee "morale" by giving employees "a sense of teamwork." Id. at 41 (citation omitted), 40. As such, the Arbitrator found the requisite "nexus" between Employee Appreciation Day and bargaining unit employees' employment to conclude that granting administrative leave for Employee Appreciation Day was a condition of employment. Id. at 41.
The Arbitrator rejected the Agency's claim that it could unilaterally end the practice of granting administrative leave for Employee Appreciation Day without bargaining with the Union because it was exercising its [ v62 p412 ] management rights under § 7106(a) of the Statute. In this connection, the Arbitrator cited several provisions of the parties' collective bargaining agreement in which the Agency had agreed to grant administrative leave for other purposes, such as time-off awards, self evaluations, and blood donations, without claiming that bargaining over such matters violated its management rights. See id. at 39.
Based on the foregoing, the Arbitrator concluded that the Agency violated the parties' agreement by unilaterally changing a condition of employment, established through past practice, when it stopped granting employees four hours of administrative leave to attend Employee Appreciation Day. As a remedy, the Arbitrator ordered the Agency to reinstate the established practice "until such time as the Agency has satisfied its bargaining obligation with the Union." Id. at 42.
III. Positions of the Parties
A. Agency's Exceptions
The Agency does not dispute the Arbitrator's finding that the parties had an established past practice of granting employees four hours of administrative leave to attend Employee Appreciation Day events. Exceptions at 2-3. The Agency also does not dispute that it unilaterally ended that practice without bargaining with the Union. See id. at 3. However, the Agency claims that the award is contrary to law for three reasons.
First, the Agency disputes the Arbitrator's finding that it was required to give the Union notice or an opportunity to bargain before ending the established past practice of granting employees four hours of administrative leave to attend Employee Appreciation Day events. In this connection, the Agency asserts that it was not required to meet any bargaining obligations before ending the past practice because the practice did not concern a condition of employment. According to the Agency, the Arbitrator's contrary finding is based on his misreading of the court's decision in AFGE, Local 2761 v. FLRA. In this regard, the Agency asserts that the court found that the agency's practice of allowing employees to attend an annual picnic during work hours was a condition of employment because it was held on the employer's premises during work hours, was paid for by the employer, and awards were distributed. See Exceptions at 9 (citing AFGE, Local 2761 v. FLRA, 866 F.2d at 1445). The Agency claims that AFGE, Local 2761 v. FLRA is factually distinguishable because here, the Agency neither paid for, nor distributed awards during, the Employee Appreciation Day events.
Second, the Agency argues that it was not required to give the Union notice or an opportunity to bargain over its decision to end the practice because it was exercising its rights to direct employees and to assign work under § 7106(a)(2) of the Statute. In this connection, the Agency asserts that Authority precedent requires it "to engage in impact bargaining over management's rights only when working conditions of bargaining unit employees are impacted." Id. at 8. The Agency asserts that working conditions are not affected because Employee Appreciation Day "events have, at most, a de minimis connection with working conditions[,]" in that such events are "always held offsite, the employees were responsible for paying for them, awards were not distributed[,] and there was no business activity performed at them." Id. at 9.
Finally, the Agency claims that the award is contrary to law because it conflicts with Federal laws governing time-off awards. According to the Agency, the Arbitrator found that granting administrative leave to attend Employee Appreciation Day events was "analogous" to granting a time-off award. Id. at 4. Thus, the Agency claims that the Arbitrator effectively ordered the Agency to give employees a time-off award. According to the Agency, time-off awards are authorized by 5 U.S.C. § 4502(e) and 5 C.F.R. § 451.104 only for "a superior accomplishment or a personal effort that contributes to the efficiency, economy, or other improvement of Government operations." Id. According to the Agency, the award requires it "to grant [employees] four hours of administrative time . . . regardless of their job performance" and, thus, the award violates these provisions. Id. at 6.
B. Union's Opposition
The Union asserts that the award does not excessively interfere with the Agency's right to assign work because the burden of continuing Employee Appreciation Day until the Agency completes its bargaining obligation is "rather minimal" when "balanced by the improved morale and positive attitudes that the program engendered." Opposition at 7. According to the Union, the award resolves the grievance consistent with Authority precedent concerning unilateral changes to established past practices. In this connection, the Union asserts that the Arbitrator correctly found that the Agency was required to give the Union notice and an opportunity to bargain because the Employee Appreciation Day "events were related to working conditions." Id. at 8. The Union acknowledges that the Arbitrator "did not determine whether such bargaining would be substance or only impact and implementation." Id. However, the Union asserts that the Agency would be [ v62 p413 ] required to bargain over both substance and impact and implementation.
The Union further claims that the Agency has misinterpreted the award as ordering it to grant time-off awards. In this regard, the Union asserts that the Agency's observation that the Arbitrator "simply made an analogy" to time-off awards undercuts its own argument. Id. at 5. The Union contends that the Arbitrator referenced time-off awards and other uses of administrative leave only to reject the Agency's management rights argument. In any event, the Union asserts that the Arbitrator never found that administrative leave granted to attend Employee Appreciation Day events was, in fact, a time-off award.
IV. Analysis and Conclusions
The Agency does not dispute the Arbitrator's finding that the Agency had an established past practice of granting employees four hours of administrative leave to attend Employee Appreciation Day events, which the Agency unilaterally ended. However, the Agency argues that it was not required to bargain with the Union before ending the practice because granting administrative leave for Employee Appreciation Day is not a condition of employment and because ending the practice was an exercise of management rights. The Agency also argues that the Arbitrator awarded time-off awards in violation of Federal statutes and regulations governing such awards. Thus, the Agency challenges the award as a matter of law.
When an exception involves an award's consistency with law, the Authority reviews any question of law raised by the exception and the award de novo. See NTEU, Chapter 24, 50 FLRA 330, 332 (1995) (citing United States Customs Serv. v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)). In applying the standard of de novo review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law. See United States Dep't of Def., Dep'ts of the Army & the Air Force, Ala. Nat'l Guard, Northport, Ala., 55 FLRA 37, 40 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. See id.
A. The Arbitrator did not err in finding that the Agency changed a condition of employment when it stopped granting administrative leave for Employee Appreciation Day.
Under longstanding Authority precedent, an agency may not change conditions of employment established through past practice without fulfilling its bargaining obligations. See Dep't of the Treasury, IRS (Wash., D.C.); and IRS Hartford Dist. (Hartford, Conn.), 27 FLRA 322, 324 (1987). However, a matter that is not otherwise a condition of employment does not become a condition of employment through past practice. See id. Therefore, when determining whether an agency is required to bargain over a change to an established past practice, the Authority first determines whether the change concerns a condition of employment within the meaning of § 7103(a)(14) of the Statute. See id. If the change concerns a condition of employment, then the Authority will determine the scope of the agency's bargaining obligation. See id.
The Authority has long held that "employees' use of duty time, without loss of pay, for certain activities" involves a condition of employment. AFGE, Local 12, 60 FLRA 533, 540 (2004) (Member Armendariz concurring) (proposal allowing employees to use administrative leave to attend union-sponsored labor recognition programs concerned a condition of employment) (citing AFGE, Local 2077, 43 FLRA 344, 355 (1991) (proposal allowing employees to use administrative leave to engage in exercise concerned a condition of employment)). In this regard, the Authority has explained that, "administrative leave allows employees to be absent from duty with pay" and, therefore, it affects conditions of employment. Id. (citing AFGE, Local 2022, 40 FLRA 371, 380 (1991) (proposal allowing employees to use administrative leave to attend Boy/Girl Scout functions concerned a condition of employment)). The Authority has applied this precedent to conclude that granting administrative leave concerned conditions of employment even where the administrative leave at issue was "for participation in a non-work related activity[.]" Id.
Here, the Arbitrator found that the Agency had an established past practice of granting four hours of administrative leave to employees for Employee Appreciation Day. Because the established past practice allowed employees to be absent from duty with pay, the foregoing precedent supports a conclusion that the past practice concerned a condition of employment. Nevertheless, the Agency argues that Employee Appreciation Day has "a de minimis connection with working conditions" and, therefore, does not concern a condition of employment because it is held offsite, paid for by employees, and not used to conduct agency business. Exceptions at 9. In this regard, the Agency asserts that the Arbitrator erred in relying on AFGE, Local 2761 v. FLRA because the annual picnic found to be a condition of employment in that case was held on the agency's premises, paid for by the agency, and used to present employees with awards.
[ v62 p414 ] For the following reasons, we reject the Agency's arguments. In this regard, subsequent to the court's decision in AFGE, Local 2761 v. FLRA, the Authority has consistently, and without exception, held that "the granting of administrative leave concerns personnel policies, practices, and matters affecting working conditions[,]" within the meaning of § 7103(a)(14) of the Statute. Fed. Employees Metal Trades Council of Charleston, 36 FLRA 401, 405 (1990) (internal citation omitted). This precedent has been applied without regard to the purpose for which the leave was granted. In particular, the Authority has found that granting administrative leave concerns conditions of employment even when granted for purposes that do not involve the agency's business. See, e.g., AFGE, Local 2022, 40 FLRA at 380 (granting administrative leave to attend Boy/Girl Scout functions concerned a condition of employment).
Moreover, the Agency provides no legal or factual basis for finding that the Arbitrator misconstrued AFGE, Local 2761 v. FLRA. As relevant here, the court noted that, in determining whether a past practice constitutes a condition of employment, the Authority makes an inquiry into the extent and nature of the effect of the practice on working conditions. 866 F.2d. at 1445 (citing Antilles Consol Educ. Ass'n, 22 FLRA 235, 236-37 (1986)). In making this inquiry, such factors as when an activity occurs (i.e., during work hours or during non-work hours), who is invited to participate, the extent of employees' participation, and whether the activity is sponsored or sanctioned by an agency, may impact whether a past practice constitutes a condition of employment or whether a change thereto is more than de minimis. See id. at 1448-49 (granting administrative leave to attend agency picnic concerns a condition of employment where the picnic is held on the agency's premises, paid for by the agency, and used to conduct agency business). However, the Authority has not construed the court's decision in AFGE, Local 2761 v. FLRA as holding that granting administrative leave concerns a condition of employment only if the leave is granted for an activity that is held on the agency's premises, paid for by the agency, and used to conduct agency business. See United States Customs Serv., Customs Mgmt. Ctr., Miami, Fla., 56 FLRA 809, 823 (2000) (denying exceptions to administrative law judge's decision finding violation of Statute where agency unilaterally changed past practice of granting administrative leave to attend Florida Police Olympics). Accordingly, the Agency has not established that the Arbitrator misconstrued AFGE, Local 2761 v. FLRA.
Finally, the Agency's claim that no awards were given to employees during Employee Appreciation Day is factually incorrect. The Arbitrator found that the Agency's awards ceremony and Employee Appreciation Day events were "part and parcel of a single event" and the Agency has not excepted to this finding. Award at 38.
Based on the foregoing, we find that the Arbitrator did not err in finding that the Agency changed a condition of employment when it stopped granting administrative leave for Employee Appreciation Day.
B. The Arbitrator did not err in finding that the Agency was required to give the Union notice and an opportunity to bargain over the change.
The Agency argues that it was not required to give the Union notice or an opportunity to bargain over the change because it was exercising its management rights to assign work and to direct employees. Under Authority precedent, the right to assign work under § 7106(a)(2)(B) of the Statute includes the right to grant requests for administrative leave. See, e.g., NAGE, Local R14-52, 44 FLRA 738, 752 (1992). Nevertheless, when an agency exercises a management right under § 7106 of the Statute, it is obligated to notify the exclusive representative and negotiate over the impact and implementation of any change in conditions of employment that has more than a de minimis effect on bargaining unit employees' conditions of employment. See United States Dep't of Justice, INS, Wash., D.C., 56 FLRA 351, 365 (2000). In assessing whether the effect of a change is more than de minimis, the Authority looks to the nature and extent of either the effect, or the reasonably foreseeable effect, on unit employees' conditions of employment. See United States Dep't of the Treasury, IRS, 56 FLRA 906, 913 (2000).
As discussed supra, the Agency argues that because Employee Appreciation Day has a "de minimis connection with working conditions[,]" it is not a condition of employment. Exceptions at 9. However, the Authority's de minimis test does not determine whether a matter concerns a condition of employment. Rather, the de minimis test determines the degree to which a change in conditions of employment requires bargaining. As already shown, the practice of granting administrative leave for Employee Appreciation Day does concern a condition of employment within the meaning of the Statute.
The Arbitrator found that the Agency's practice of granting administrative leave for Employee Appreciation Day fostered "a productive work relationship [ v62 p415 ] between employees and management[,]" which benefited employees in terms of "morale" and gave them "a sense of teamwork." Award at 41 (citation omitted), 40. The Agency does not challenge these findings, which support a conclusion that ending the practice had more than a de minimis effect on bargaining unit employees' conditions of employment. See, e.g., IRS, Wash., D.C., and Fresno Serv. Ctr., Fresno, Cal., 16 FLRA 98, 127 (1984) (adopting judge's decision finding change was more than de minimis where effect on employees was "largely a matter of morale").
Consequently, we deny the Agency's exception that the Arbitrator erred in concluding that it was required to give the Union notice and an opportunity to bargain over the change.
C. The Arbitrator did not award time-off awards in violation of 5 U.S.C. § 4502(e) and 5 C.F.R. § 451.104.
Under 5 U.S.C. § 4502(e), agencies are authorized, consistent with Office of Personnel Management (OPM) regulations, to grant employees, as an incentive award, time off from duty "in recognition of superior accomplishment or other personal effort that contributes to the quality, efficiency, or economy of Government operations." OPM regulations provide that agencies may grant time-off awards on the basis of, as relevant here, "[a] suggestion, invention, superior accomplishment, productivity gain, or other personal effort that contributes to the efficiency, economy, or other improvement of Government operations or achieves a significant reduction in paperwork[.]" 5 C.F.R. § 451.104(a)(1).
Although the Agency acknowledges that the Arbitrator did not expressly award time-off awards, the Agency claims that the Arbitrator effectively granted time-off awards when he found that "a reasonable person . . . could view [Employee Appreciation Day] events as a form of time off award . . . ." Exceptions at 4 (quoting Award at 39). Therefore, the Agency claims that the award is contrary to the foregoing laws that govern such awards.
The Arbitrator explained that he was "attempting to categorize" Employee Appreciation Day events in terms of time-off awards because "the Agency ha[d] asserted that 5 U.S.C. § 7106(a) makes any allocation of administrative time an exclusive managerial right . . . ." Award at 39. In particular, the Arbitrator referred to the time-off awards provision of the parties' agreement to show that the Agency had previously bargained over circumstances in which it would grant time off with pay. Consistent with the Union's arguments before the Arbitrator, the Arbitrator referred not only to time-off awards but also to other provisions in the parties' agreement where the Agency had agreed to grant time off with pay for other purposes, such as preparing self evaluations and donating blood. See id. at 30, 39. The Agency has not demonstrated that, read in proper context, the award requires the Agency to grant time-off awards under 5 U.S.C. § 4502(e) and 5 C.F.R. § 451.104. Consequently, the Agency's claim that the award is deficient because it is contrary to these provisions is without merit.
Based on the foregoing, we deny the Agency's exception.
V. Decision
The Agency's exceptions are denied.