74 FLRA No. 12

                                                                                     

AMERICAN FEDERATION

OF GOVERNMENT EMPLOYEES
NATIONAL VETERANS AFFAIRS COUNCIL #53

(Union)

 

and

 

UNITED STATES

DEPARTMENT OF VETERANS AFFAIRS

(Agency)

 

0-AR-5956

 

_____

 

DECISION

 

October 15, 2024

 

_____

 

Before the Authority:  Susan Tsui Grundmann, Chairman, and Colleen Duffy Kiko and Anne Wagner, Members

 

I.               Statement of the Case

 

Arbitrator Joyce M. Klein issued an award finding the Agency violated §§ 7116(a)(1) and (5) of the Federal Service Labor‑Management Relations Statute (the Statute)[1] by failing to bargain with the Union over changes to employee awards resulting from the Agency’s reorganization.  As remedies, the Arbitrator directed prospective bargaining and issued a cease‑and‑desist order.  The Union filed an exception arguing the award is contrary to law because the Arbitrator failed to award additional remedies.  Because the Union does not establish that the award is deficient, we deny the exception.

 

II.             Background and Arbitrator’s Award

 

The Agency operates clinical contact centers that assist veterans in obtaining healthcare services.  In 2021, the Agency initiated a reorganization that, in pertinent part, consolidated three clinical contact centers operating within the Black Hills, Minneapolis, and Nebraska‑Western Iowa Health Care Systems, respectively.  In conducting the reorganization, the Agency transferred employees to the consolidated clinical contact center (consolidated center), but did not change the location of affected employees’ official duty stations.

 

The Agency provided notice of the reorganization to the Union before implementation and, following negotiations, the parties executed a memorandum of understanding.  Neither the Agency’s notice nor the memorandum referenced employee awards.  Thereafter, the parties participated in unit‑clarification proceedings before the Authority to determine which labor organization would represent employees at the consolidated center.  As part of these proceedings, the parties stipulated that the consolidated center was “assigned to Minneapolis . . . for personnel[-]costing purposes,” and, therefore, employees would “fall under a single budget regardless of their physical location.”[2]

 

For the 2022 fiscal year, the Minneapolis Health Care System paid performance awards to bargaining‑unit employees assigned to the consolidated center, regardless of their duty station.  Article 27 of the parties’ collective‑bargaining agreement provides that “an employee who receives ‘[a]n annual rating of fully successful’ or higher is eligible for ‘award consideration,’” with each facility director determining the amount to be awarded, if any.[3]  Under the Minneapolis Health Care System’s award structure, qualifying employees at the consolidated center received performance awards equaling one to two percent of their base pay.  As a result, some employees received smaller awards than they previously received from the Black Hills and Nebraska‑Western Iowa Health Care Systems.  Rather than using a percentage-based system, the Black Hills and Nebraska‑Western Iowa Health Care Systems awarded flat sums based on the employee’s annual rating, irrespective of salary.

 

The Union filed a grievance alleging the Agency committed an unfair labor practice by changing performance awards without providing notice and an opportunity to bargain.  The grievance proceeded to arbitration, where the parties stipulated to the following issue:  “Whether the [Agency] unilaterally implemented changes to the . . . Performance Awards Program . . . in violation of the [m]aster [a]greement and/or 5 U.S.C. [§§] 7116(a)(1) and (5)[, and i]f so, what shall the remedy be?”[4]

 

Addressing the Agency’s duty to bargain, the Arbitrator observed that the Statute required the Agency to:  (1) provide “sufficiently specific” notice of a contemplated change to conditions of employment;[5] and (2) “bargain over the impact and implementation of a management decision” where the “reasonably foreseeable effects of that decision . . . were substantial and . . . evident.”[6]  Applying these principles, the Arbitrator found the Agency provided the Union with only “generalized notice” that the Minneapolis Health Care System would fulfill budgetary functions for the consolidated center due to the reorganization.[7]  The Arbitrator determined that it “was not only foreseeable, but likely” that the reorganization would result in smaller performance awards for employees who, prior to the reorganization, received awards from the Black Hills and Nebraska‑Western Iowa Health Care Systems.[8]  The Arbitrator also determined the Agency’s notice – which “did not explain that the re[organization] would result in . . . employees . . . receiving different bonuses”[9] – was “not sufficiently specific to provide the Union with a ‘reasonable opportunity to request bargaining’” regarding the reorganization’s impact on awards.[10] 

 

At arbitration, the Agency argued that the parties’ agreement did not require the Agency to administer awards based on an employee’s duty-station location.  In response, the Arbitrator explained that the Agency’s argument, even if meritorious, would “not affect whether the Union [was] entitled to bargain over the impact of the . . . re[organization] . . . on” performance awards.[11]

 

Based on these findings, the Arbitrator concluded that the Agency violated §§ 7116(a)(1) and (5) of the Statute when it failed to bargain performance awards “as part of the re[organization] of” clinical contact centers.[12]  In determining a remedy, the Arbitrator found retroactive relief inappropriate because it would “require all . . . employees affected by the re[organization]” to receive adjusted awards, to some employees’ detriment.[13]  Specifically, the Arbitrator noted that, if she were to direct status‑quo‑ante relief, some employees would receive increased performance awards, but other employees would “receiv[e] a smaller [performance awards] for fiscal year 2022.”[14] Consequently, instead of directing retroactive relief, the Arbitrator issued a cease‑and‑desist order and directed the Agency to bargain over performance awards “going forward.”[15]

The Union filed an exception to the award on March 20, 2024, and the Agency filed an opposition to the exception on April 24, 2024.

 

III.           Analysis and Conclusion:  The award is not contrary to law.

 

The Union argues the award is contrary to law because the Arbitrator failed to award several remedies the Union requested in its grievance.[16]  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.[17]  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.[18]

 

Where an arbitrator finds that a party has committed an unfair labor practice, the Authority defers to the arbitrator’s judgment and discretion in the determination of the remedy.[19]  Thus, the Authority upholds the arbitrator’s remedial determination unless a party establishes either that the Statute compels a different, particular remedy, or that the arbitrator’s remedial determination is “a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the [Statute].”[20]  The Authority has emphasized that making such a showing is a heavy burden.[21]

 

A.     The Arbitrator did not err by denying the Union’s request for a status‑quo‑ante remedy.

 

The Authority has held that, where management changes a condition of employment without fulfilling its obligation to bargain over the substance of the decision to make the change, a status‑quo‑ante remedy is appropriate in the absence of special circumstances.[22]  Citing this principle, the Union argues the Arbitrator was required to award status‑quo‑ante relief, because the Agency did not bargain the change to performance awards and “failed to present any evidence of special circumstances.”[23] 

          

As noted, the Arbitrator determined that the reorganization was the operative change to employees’ conditions of employment,[24] and that the Agency’s duty to bargain consequently extended only to the reorganization’s impact and implementation, including the “impact of the . . . re[organization] . . . on” performance awards.[25]  The Arbitrator did not conclude the Agency failed to fulfill an obligation to bargain over the substance of any decision. 

 

In support of its argument, the Union generally asserts that the “provision of awards does not involve the exercise of a reserved management right.”[26]  However, it fails to argue that the Arbitrator erred by not finding the Agency’s bargaining failure related to a matter for which substantive bargaining was required.[27]  Because the Agency’s failure‑to‑bargain unfair labor practice, as found by the Arbitrator, did not concern a substantive bargaining obligation, the Union does not demonstrate that the Arbitrator was required to apply the Authority’s special‑circumstances test. 

 

Additionally, the Union does not challenge the Arbitrator’s finding that status‑quo‑ante relief was inappropriate because it would require retroactively increasing certain employees’ awards while retroactively decreasing other employees’ awards.[28]  Deferring to the Arbitrator’s finding, there is no basis for concluding that the Arbitrator’s denial of status‑quo‑ante relief was a patent attempt to achieve ends other than those to effectuate the policies of the Statute.[29]

 

Accordingly, the Union does not establish that the Arbitrator’s denial of its request for status‑quo‑ante relief is contrary to law.[30]

 

B.   The Arbitrator did not err by declining to direct additional remedies.

 

The Union also asserts that the Arbitrator erred by not awarding a notice posting, a retroactive bargaining order, or make‑whole relief.[31]  Although the Union cites several Authority and federal court decisions finding that such relief was appropriately awarded under the circumstances presented by those cases, none of the cited decisions establishes that the Union is entitled to the identified remedies, as a matter of law, in this case.[32]  Further, the Union does not argue, or provide a basis for finding, that the Arbitrator’s denial of the Union’s requested remedies was a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Statute.

 

Accordingly, we deny the Union’s exception.[33]

 

IV.            Decision

 

We deny the Union’s exception.

             

 

 

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