United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

In the Matter of FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C.	Case No. 97 FSIP 1
and NATIONAL TREASURY EMPLOYEES UNION

DECISION AND ORDER

     The Federal Deposit Insurance Corporation, Washington, D.C. (FDIC, Employer or Agency) filed a request 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, between it and the National Treasury Employees Union (NTEU or Union).

     Following an investigation of the request for assistance, the Panel determined that the impasse, arising from bargaining over the Employer’s Career Transition Assistance Program (CTAP),⁽¹⁾ should be resolved on the basis of a single written submission from each party, with the Panel to take whatever action it deems appropriate to resolve the impasse.⁽²⁾ Written submissions were made pursuant to this procedure, and the Panel has now considered the entire record.⁽³⁾

BACKGROUND

     The FDIC’s mission is to: (1) insure deposits in national banks, State banks that are members of the Federal Reserve System (FRS), and savings and loans institutions that are members of the Savings Association Insurance Fund; and (2) examine periodically insured State banks that are not members of FRS. The Union represents three separate bargaining units (Headquarters, Field, and Division of Supervision); employees in all three units are affected by the dispute. The Headquarters unit consists of approximately 1,000 General Grade (GG) and Wage Grade (WG) employees in various professional and nonprofessional positions (e.g., attorney, economist, and data processing clerk) at FDIC Headquarters in Washington, D.C. They are covered by a collective-bargaining agreement (CBA) which was due to expire in 1990, but remains in effect until a successor is implemented. The Field unit is the largest, with approximately 3,000 GG and Liquidation Grade employees working for the Division of Depositor and Asset Services, the Division of Finance, the Office of Corporate Services, and the Legal Division at numerous offices nationwide. These employees hold such positions as attorney, liquidator, and paralegal, among others. The CBA covering these employees was due to expire in April 1996, but also remains in effect until a successor is implemented. The Division of Supervision unit is made up of approximately 1,000 bank examiners and assistant bank examiners in FDIC’s Boston, Chicago, and New York Regions. Each region has its own CBA; all have expired, but their terms and conditions will continue to be adhered to until successors are implemented.

ISSUE AT IMPASSE

    The parties disagree over the procedure for the selection of employees for vacant positions under the Employer’s CTAP.

POSITIONS OF THE PARTIES

1. The Employer's Position

    The Employer proposes the following:⁽⁴⁾

Displaced Agency employees will be selected prior to surplus Agency employees. If two or more eligible employees apply for a vacancy and are determined to be well qualified, any of these eligible employees may be selected. Candidates from within or outside the Agency cannot be selected if eligible [and] well-qualified displaced or surplus Agency employees are available.⁽⁵⁾

This proposal is consistent with OPM CTAP regulations which clearly "vest [management] with [the] discretion to distinguish among viable candidates" for vacant positions.⁽⁶⁾ Such discretion would allow management to select the "best qualified" employees for vacant positions, which has a greater importance in this era of downsizing when "mission requirements must be closely matched with personal skills and abilities in order to maintain efficient operations." Moreover, this proposed selection process is "reasonable and even-handed" because it bases selection on employees’ qualifications, rather than their bargaining-unit status or seniority.

    The Union’s proposal, on the other hand, is contrary to OPM CTAP regulations which make management responsible for "deciding the order of selection."⁽⁷⁾ Also, it "discounts the value of performance appraisals, employee interviews, and reference checks" in the selection process, thereby "stripping" management of its "unfettered right" to select the employees who are "best" qualified for the positions. Requiring management to give bargaining-unit employees "first consideration" when filling positions and using seniority as a basis for selection would have a "disparate impact" on non-unit employees who make up nearly one-half of the FDIC workforce. Such impact would be "magnified" in areas where there are large groups of both unit and non-unit employees, e.g., Atlanta, because competition for positions under CTAP is limited to local commuting areas. It is unacceptable to management to "discount the qualifications and special attributes" of the "thousands" of non-unit employees until it "examine[s] the bona fides of unit employees." As for selection based on employees’ seniority, it only would allow for an evaluation of employees’ "paper qualifications;" in this regard, it would preclude management from using factors considered in a "conventional selection process," such as job interviews and performance appraisals, to distinguish between employees. Even if the proposal were interpreted to allow management to use such things to distinguish between employees, however, selection based on seniority would be unacceptable because employees’ qualifications, not their length of service, is what determines their ability to perform in a particular job. Moreover, competition for jobs under CTAP is not the same as competing for "one’s current job" under RIF procedures. Rather, it is competition for jobs which employees may never have performed before, and it is not a practice in the Federal Government to use seniority as the basis for selecting employees for such jobs.

    Contrary to the Union’s arguments, its proposal is not consistent with earlier Panel decisions on the use of "first consideration" and "seniority" as bases for selection. In this regard, the Panel has never adopted proposals granting unit employees "first consideration" in circumstances similar to those in this case where "employees are struggling to remain on the Agency’s payroll." Rather, the earlier Panel cases "applied the first consideration scheme[] almost exclusively to either merit promotion or work detail situations."⁽⁸⁾ Moreover, in "virtually" all of those Panel cases, the unit employees were "internal to the organization," while the other employees vying for positions were "either organizationally or geographically ‘external’."⁽⁹⁾ By comparison, under CTAP, FDIC employees, whether or not they are organized, would compete for vacant positions within "discrete" local commuting areas. Finally, an "informal survey" did not reveal any other Federal agencies involved in financial management or regulation which are covered by negotiated agreements providing unit employees with "first consideration" in the CTAP selection process, with the exception of the Internal Revenue Service (IRS).

2. The Union’s Position

    The Union’s proposal is as follows:⁽¹⁰⁾

Displaced Agency employees will be selected prior to surplus Agency employees. If two or more eligible employees apply for a vacant bargaining-unit position, first consideration will be given to bargaining-unit employees. If a bargaining-unit employee is to be selected, it shall be the employee with the greatest seniority if the candidates are essentially equally qualified. Candidates from within or outside the Agency cannot be selected if eligible [and] well-qualified displaced or surplus Agency employees are available.⁽¹¹⁾

The CTAP regulations limit eligibility for a position to well-qualified employees (i.e., employees who meet the basic qualifications, selection placement factors, and quality ranking factors above the minimum level, all of which are determined "solely" by the Employer), and the Employer determines if the employees are well qualified. The Employer’s interest in selecting the "best" qualified candidate for the position, therefore, would be met under the Union’s proposal. In fact, the "well qualified" requirement is so "stringent" that few employees are likely to be deemed well qualified for vacant bargaining-unit positions at their same or lower grade in their local commuting areas. Thus, its proposal also would have a "narrow application."

    The principle of "first consideration," a "long-established and well-accepted principle" in Federal labor relations, "reflect[s] a balance between the Union’s interest in protecting the integrity of the bargaining unit and management’s statutory right to make selections from ‘any appropriate source’." "First consideration" provisions are "common" in negotiated CTAP agreements, e.g., such agreements exist at the IRS and the Financial Management Service. Also, "first consideration" provisions in selection procedures have frequently been ordered by the Panel in the past.⁽¹²⁾ Contrary to the Employer’s argument, the application of this principle allows management to select non-unit employees as long as its choices meet CTAP requirements. If management determines to select a bargaining-unit employee for a vacant unit position, however, it should be required to select the most senior of the competing employees if they are "essentially equally qualified." This would allow management to distinguish between unit employees if it "can justify a determination that one’s qualifications are superior to the others;" if, however, the employees are determined to be "essentially equally qualified," management’s interest in choosing the "best" qualified employee would be served by the selection of either, while satisfying employees’ interests in having their length of service with the Agency recognized. Further, in previous cases, the Panel has ordered that seniority be established as a basis for selecting between equally-qualified candidates for, e.g., reassignments and details.⁽¹³⁾ Moreover, "first consideration" is analogous to the FDIC RIF "bumping process" where unit and non-unit employees compete for retention separately because they are in different competitive levels,⁽¹⁴⁾ and the consideration of performance (in the determination of whether an employee is well qualified) and seniority is analogous to a determination of RIF retention standing. Accordingly, it "makes sense to utilize a CTAP process which recognizes the principles of first consideration and seniority in a matter consistent with RIF regulations" given that CTAP is used in the context of a pending RIF, and likely provides employees with their last chance for job placement before being separated. Overall, while the Union’s proposal recognizes the legitimate interests of all concerned, the Employer’s recognizes only management interests.

CONCLUSIONS

    After carefully considering the evidence and arguments presented, we conclude that the parties should adopt a compromise solution to resolve their dispute. Preliminarily, we note that the parties agree that displaced employees receive hiring priority over surplus employees. Thus, the selection procedure would only apply in those situations where two or more displaced employees or surplus employees are competing for a vacant position. Under our compromise, the Employer will be required to select the eligible and well-qualified employee with the highest adjusted creditable service, if it determines that the competing employees are otherwise equally qualified for the position.⁽¹⁵⁾ In our view, since CTAP arises in the context of a RIF (real or potential), and employees not selected for positions are likely to be separated, it is fair to use the same criterion as the basis for selection as would otherwise be applied during a RIF. Consistent with RIF regulations, the use of employees’ adjusted creditable service does not distinguish between employees based on their bargaining-unit status. It also takes into consideration both the employees’ performance ratings and length of service with the Federal Government. Therefore, it should satisfy the Employer’s interest in considering employees’ performance appraisals and the Union’s interest in using seniority as a basis for selection. Given that employees are limited to competing for positions only in their commuting areas, consideration of employees’ adjusted creditable service (which already should be available for displaced employees and should be easily calculable for surplus employees) should not appreciably lengthen the selection process. Moreover, the compromise should assuage the Employer’s concern that anything short of unfettered discretion would prevent the selection of the most qualified employees for positions. In this regard, management would not be precluded from considering employees’ greater skills and knowledge, or unique job-related qualifications and/or experience, among other distinguishing factors, in determining whether competing employees are equally qualified. Nor does the compromise prevent the Employer from interviewing employees or checking their references as part of the selection process. Overall, we believe that the compromise provides a better balance than do the parties’ approaches between the employees’ interest in remaining at FDIC and the Employer’s in placing only the most qualified employees in vacant positions. Accordingly, for the reasons presented herein, we shall order its adoption.

ORDER

    Pursuant to the authority vested in it by the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their dispute during the course of proceedings instituted under the Panel’s regulations, 5 C.F.R. § 2471.6(a)(2), the Federal Service Impasses Panel under § 2471.11(a) of its regulations hereby orders the following compromise wording:

Displaced Agency employees will be selected prior to surplus Agency employees. If two or more eligible and well-qualified employees apply for a vacancy and management determines that they are equally qualified, the employee with the highest adjusted creditable service will be selected. Candidates from within or outside the Agency cannot be selected if eligible and well-qualified displaced or surplus Agency employees are available.

 

By direction of the Panel.

H. Joseph Schimansky

Executive Director

May 2, 1997

Washington, D.C.

1.CTAPs were mandated under President Clinton’s memorandum of September 12, 1995. Specifically, the President instructed Federal agencies to develop such programs to assist employees affected by downsizing to obtain other employment in the same agency. Pursuant to the President’s memorandum, the Office of Personnel Management (OPM) issued interim implementing regulations in late December 1995. 5 C.F.R. Part 330, Subpart F (1995). The regulations set forth minimum standards for CTAPs, which may be supplemented at the agencies’ discretion. 5 C.F.R. § 330.601. Agencies are required to give hiring priority to surplus and displaced employees who are “well qualified” for agency vacancies within their local commuting areas for which they apply. 5 C.F.R. § 330.602(a)(2). Such priority, however, is given only when the applied-for vacant positions are in the same or lower grade and do not have a greater promotion potential than the positions from which employees are being or may be separated. 5 C.F.R. § 330.605(a). While agencies had until February 29, 1996, to have their CTAPs in place, FDIC and NTEU did not start bargaining over the matter until early summer in 1996; consequently, OPM gave FDIC an extension to an unspecified date.

2.The Panel also declined to assert jurisdiction over various issues concerning the establishment of competitive areas because of duty-to-bargain questions raised by the Employer.

3.The parties mutually agreed to extend the filing date of their written submissions from January 6 to January 17, 1997, which delayed the Panel’s consideration of this case. On March 27, a Panel representative held a joint telephone conference with the parties essentially to explore any settlement possibilities, but to no avail.

4.Only the underscored wording is in dispute.

5.A displaced employee is one who has received a specific reduction in force (RIF) separation notice; a surplus employee is one who, e.g., has received an informational RIF notice or occupies a position within a Division or Office where the FDIC has announced it intends to reduce staffing. FDIC/NTEU CTAP MOU, paragraphs C.2.a. and b.; see also 5 C.F.R. § 330.604(b) and (f).

6.Under the regulations, “[a]n agency may decide the specific order of selection of its eligible employees within the provisions set forth in § 330.606(a) (e.g., the agency may decide to select displaced employees from within a particular component of the agency before selecting surplus and/or displaced employees from another component of the agency)." 5 C.F.R. § 330.608(b). Also, the regulations provide that "[i]f two or more eligible employees apply for a vacancy and are determined to be well qualified, any of these eligible employees may be selected.” 5 C.F.R. § 330.608(d).

7.We note that the Employer does not argue that it has no duty to bargain over the matter. In this regard, under Authority case law, the Employer has the duty to bargain on negotiable matters to the extent of its discretion; in this case, the regulations do not appear to provide the Employer absolute discretion to select from among eligible and well-qualified employees for vacant positions. See, for example, American Federation of Government Employees, National Border Patrol Council, Local 2544 and U.S. Department of Justice, Immigration and Naturalization Service, Border Patrol, Tucson, Arizona, 46 FLRA 930, 948 (1992); National Treasury Employees Union and U.S. Department of the Treasury, Bureau of Alcohol, and Tobacco and Firearms, Washington, D.C., 43 FLRA 1442, 1450 (1992), remanded as to other matters, 30 F.3d 1510 (D.C. Cir. 1994); Overseas Education Association, Inc. and Department of Defense, Office of Dependents Schools, 22 FLRA 351, 361 (1986); and American Federation of State, County and Municipal Employees, AFL-CIO, Local 2477 and Library of Congress, Washington, D.C., 7 FLRA 578, 585-86, enf’d, 699 F.2d 1280 (D.C. Cir. 1983).

8.Department of Defense, National Guard Bureau, New York Army and Air National Guard, Latham, New York and New York Council, Association of Civilian Technicians, Case No. 94 FSIP 27 (April 20, 1994), Panel Release No. 358 (National Guard Bureau); and Department of Defense, Department of Defense Dependents Schools, Mediterranean Region and Overseas Federation of Teachers, AFT, AFL-CIO, Case No. 93 FSIP 22 (July 1, 1993), Panel Release No. 346

9.Department of the Air Force, Headquarters 66th Support Group, Hanscom Air Force Base, Massachusetts and Local R1-8, National Association of Government Employees, SEIU, AFL-CIO, Case Nos. 96 FSIP 6 and 96 FSIP 7 (March 14, 1996), Panel Release No. 384 (Hanscom Air Force Base); and National Guard Bureau.

10.Only the underscored wording is in dispute.

11.The Union’s proposal speaks only to employee selection for vacant bargaining-unit positions. As noted by the Union, “management retains the unlimited discretion in making selection for nonbargaining-unit vacancies from among CTAP-eligible employees.”

12.Hanscom Air Force Base; National Guard Bureau; Department of Defense, National Guard Bureau, New Hampshire Air National Guard, Headquarters, 157th Air Refueling Group, Pease Air National Guard Base, Newington, New Hampshire and Granite State Chapter, Association of Civilian Technicians, Case No. 92 FSIP 112 (October 2, 1992), Panel Release No. 336; and Department of Health and Human Services, Public Health Service, Centers for Disease Control, Atlanta, Georgia and Local 2883, American Federation of Government Employees, AFL-CIO, Case No. 91 FSIP 91 (July 24, 1991), Panel Release No. 314.

13.Department of the Interior, National Park Service, Golden Gate National Recreation Area, San Francisco, California and Local 1276, Laborers International Union of North America, AFL-CIO, Case No. 94 FSIP 121 (January 11, 1995), Panel Release No. 370; Department of Health and Human Services, Social Security Administration, Field Office Component, Baltimore, Maryland and Council 220, American Federation of Government Employees, AFL-CIO, Case No. 91 FSIP 196 (June 1, 1992)(Arb. Panel Member Susan S. Robfogel), Panel Release No. 331; Department of the Navy, Naval Underwater Systems Center, Newport, Rhode Island and Local R1-144, Federal Union of Scientists and Engineers, National Association of Government Employees, Case No. 90 FSIP 147 (December 19, 1990), Panel Release No. 303; Department of the Navy, Naval Underwater Systems Center, Newport, Rhode Island and Local R1-144, Federal Union of Scientists and Engineers, National Association of Government Employees, Case Nos. 89 FSIP 234 and 89 FSIP 243 (January 23, 1990), Panel Release No. 289; and Department of Health and Human Services, Social Security Administration, Visalia and Bakersfield District Offices, Visalia and Bakersfield, California and Local 3172, American Federation of Government Employees, AFL-CIO, Case Nos. 89 FSIP 140, 89 FSIP 225, and 89 FSIP 230 (November 14, 1989), Panel Release No. 287.

14.A “competitive level” consists of “all positions in a competitive area which are in the same grade (or occupational level) and classification series, and which are similar enough in duties, qualification requirements, pay schedules, and working conditions so that an agency may reassign the incumbent of one position to any of the other positions in the level without undue interruption.” 5 C.F.R. § 351.403(a).

15.In determining an employee’s adjusted creditable service (also referred to as adjusted service computation date), an employer considers an employee’s length of service and any additional service credit for performance. Current regulations, which OPM has recently proposed to change, require consideration of an employee’s three most recent performance evaluations over the previous 4-year period. 5 C.F.R. § 351.504(b)(1).