U.S. Department of Defense, Office of Dependents Schools and Overseas Education Association (Authority decision, September 30, 1992)

Final FLRA decision. The Authority denied exceptions to an arbitral award. Under 5 U.S.C. § 7123(a)(1), an order involving an arbitral award is generally excluded from judicial review unless it involves an unfair labor practice under 5 U.S.C. § 7116. This decision does not address an unfair labor practice.

Plain-English summary

An arbitrator found that a group of overseas school teachers with temporary appointments met the Defense Department's conditions for conversion to continuing appointments. The arbitrator ordered conversions effective from the start of the 1990-91 school year and ordered reinstatement with back pay for affected teachers whose temporary appointments had ended. The agency argued that the grievance concerned appointments and could not be arbitrated, and challenged the arbitrator's reading of the directive and facts. The Authority held that the grievance concerned conversion after initial hiring, so the appointment exclusion did not apply. It rejected the remaining challenges and denied the agency's exceptions.

Decision snapshot

• Authority: Arbitration review under 5 U.S.C. § 7122(a); appointment grievance exclusion under 5 U.S.C. § 7121(c)(4).
• Outcome: Agency exceptions denied; retroactive conversions and make-whole remedy left in place.
• Key point: A dispute over converting already hired teachers was not a dispute over their initial appointments.

Full text (FLRA public release)

[ v45 p1411 ]
45:1411(137)AR

The decision of the Authority follows:

45 FLRA NO. 137

U.S. DEPARTMENT OF DEFENSE
OFFICE OF
DEPENDENTS SCHOOLS
(Agency)

and

OVERSEAS EDUCATION
ASSOCIATION
(Union)

0-AR-2257

DECISION

Before
Chairman McKee and Members Talkin and Armendariz.

I. Statement of the
Case

This matter is before the Authority on exceptions to an award of Arbitrator H. Morton Rosen filed by the Agency under section 7122(a) of the Federal Service Labor - Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Union filed an opposition to the Agency's exceptions.

The Arbitrator determined
that the Agency had violated
Department of Defense (DoD) Directive 1400.13 by failing to convert a group of teachers in temporary positions to permanent positions. We conclude that the Agency fails to establish that the award is deficient. Accordingly, we will deny the

exceptions.

II. Background and Arbitrator's Award

The Union
filed a grievance alleging that the Agency had violated DoD Directive 1400.13, as it pertains to conversions of Agency teachers with temporary appointments to permanent appointments. The Union claimed that a group of teachers in temporary positions was entitled to have been converted to

permanent positions because each teacher had met the conditions of the directive for conversion as of the beginning of the 1990-91 school year. The Union argued that under the directive, conversion was mandatory and that the Agency had violated the directive by failing to convert the teachers. The Agency denied the grievance on the basis that the grievance was not grievable and arbitrable. The Agency claimed that the grievance concerned conversion from temporary to permanent appointments and that, therefore, the grievance was precluded because it concerned appointments. The Agency also denied the grievance on the basis that under the circumstances, the grievants were not entitled to have been converted. The grievance was not resolved and was submitted to arbitration on the issues of whether the grievance was grievable and arbitrable and whether the Agency had violated the directive.

The Arbitrator
determined that the grievance was grievable and arbitrable. The Arbitrator agreed with the Union that the grievance concerned conversion and not appointment.

On the merits, the Arbitrator noted that the applicable provisions of DoD Directive 1400.13, section IV.D.1 provide as follows:

b. ...Upon satisfactory completion of a cumulative period of 8 calendar months during one or more school years in a part or full-time position with the DoD Overseas Dependents' Schools

System,
the educator may be selected for conversion to an

Excepted Appointment -
Conditional at the end of the current school year.

c. A fully
qualified educator appointed in the United States

or who has previously
served at least 8 calendar months in a part or full-time position with the DoD Overseas Dependents' Schools System will, upon appointment to a continuing part or full-time position, be given an Excepted Appointment - Conditional, unless eligible for an Excepted Appointment without condition.

f. Whenever reasonable doubt exists that an educator's

services will be needed or available for a full school year an

educator
appointed to a part or full-time position may

be given a temporary
limited appointment for the period of actual need.

Award at 8
(quoting the directive).

The Arbitrator determined that when a teacher meets the conditions of subsection c, the Agency must convert the teacher. The Arbitrator noted that the Agency conceded that the grievants met the conditions of having served at least 8 months in a

part-time or full-time position with the Agency. The Agency's argument was that the grievants were not entitled to have been converted because they had not been appointed to continuing part-time or full-time positions.

The Arbitrator rejected the Agency's argument. The Arbitrator found that the objective evidence demonstrated that the grievants were appointed to continuing positions. In the Arbitrator's view, the most important evidence was the Agency's use of the standard form (SF) 50 in appointing the grievants for the 1990-91 school year. The Arbitrator found that the use of the end of the school year as the not to exceed (NTE) date of the grievants' appointments indicated that the position appointments

were to last the entire school year. The Arbitrator also noted that the fact that the positions did last the entire school year supported the Union's claim that the positions were needed for the entire year.

The Arbitrator was not persuaded otherwise by the testimony of the Agency's personnel director that "the placing of the NTE date at the end of the school year, instead of at a mid-point of the school year, was done because of laziness and was not intended to convey a notion that the job was meant to be permanent" and that "this lazy use of the SF 50 form was not done

at his direction." Id. at 9. The Arbitrator also rejected the Agency's reliance on subsection f of the directive. He found that in order for subsection f to be consistent with subsection c, subsection f applies only when the teacher has not already been appointed to a continuing part-time or full-time position. In addition, the Arbitrator was not persuaded by the Agency's contention that it had a reasonable doubt as to whether the

grievants' services would be needed for the full school year. The

Arbitrator found that despite the expressed concerns of the Agency, staffing problems did not occur in school year 1990-91. Because of this and situations in school years 1988-89 and 1989-90, in which the Agency failed to convert eligible teachers until grievances were filed, the Arbitrator concluded that "the Agency is over-sensitive in its demand for staffing

flexibility." Id. at 10.

Accordingly, the Arbitrator sustained the grievance and directed that all the grievants be converted effective the first day of the school year 1990-91 and otherwise be made whole. With

respect to grievants who were terminated on the expiration of temporary appointments that should have been converted, the Arbitrator ordered them reinstated retroactively with backpay and benefits pursuant to the Back Pay Act.

III. Preliminary Matter

In its opposition, the Union
contends that the Agency's
exceptions should be dismissed for lack of jurisdiction insofar as the award relates to the grievants who were terminated at the expiration of their temporary appointments. The Union argues that those employees were removed, and that under section 7122(a), the Authority does not have jurisdiction over awards that relate to

removals.

Under section 7122(a) of the Statute, exceptions may not be filed with the Authority to an arbitration award relating to a

matter described in section 7121(f) of the Statute. The matters described in section 7121(f) include adverse actions under 5 U.S.C. 7512, such as removals, that have been taken against employees, as defined in 5 U.S.C. 7511. For example, U.S. Department of the Army, Army Reserve Personnel Center and American Federation of Government Employees, Local 900, 34 FLRA 319, 321 (1990) (Army Reserve Personnel Center). The matters

described in section 7121(f) also include matters similar to those covered under section 7512 that arise in another personnel system, such as the system established by the Defense Department Overseas Teachers Pay and Personnel Practices Act, 20 U.S.C. 901-907 for Agency teachers. For example, U.S. Department of Defense Dependents Schools, Germany Region and Overseas Education Association, 38 FLRA 1432, 1435 (1991).

In Army
Reserve Personnel Center, we found that the grievant was not an employee within the meaning of section 7511 because she was a temporary employee whose appointment was limited to 1 year or less. We concluded that because the grievant was not an employee under section 7511, her termination was not an adverse action covered by section 7512. 34 FLRA at 321 (citing Horner v. Lucas, 832 F.2d 596, 597 (Fed. Cir. 1987); Compton v. Department of the Navy, 31 MSPR 402 (1986)). Accordingly, we asserted

jurisdiction because the award did not relate to a matter covered by section 7121(f) of the Statute.

In this case, because the grievants who were terminated were temporary employees, we similarly find that their terminations were not matters similar to those covered under section 7512. Accordingly, we conclude that the portion of the award pertaining

to these grievants does not relate to a matter described in section 7121(f) and that the Agency's exceptions to the award are properly before us under section 7122(a) of the Statute.

IV. First Exception

A.
Positions of the Parties

1. The Agency

The Agency contends
that the award is deficient because it is contrary to section 7121(c)(4) of the Statute and Federal Personnel Manual (FPM) Supplement 296-33, subchapter S11-2. The Agency argues that section 7121(c)(4) precludes grievances concerning appointments and notes that the section does not limit the preclusion to only initial appointments. The Agency further

argues that the award conflicts with the FPM definition of conversion, which defines a conversion as a change "from one appointment to another appointment...." FPM Supplement 293-33, subchapter S11-2(b). The Agency maintains that because a conversion, in fact, concerns an appointment, a grievance concerning conversion is not grievable or arbitrable under

section 7121(c)(4). The Agency also maintains that, like the award in Internal Revenue Service, Indianapolis District and National Treasury Employees Union, Chapter 49, 29 FLRA 232 (1987) (IRS, Indianapolis), the award in this case impermissibly orders the grievants converted to permanent appointments and is contrary to law.

2. The Union

The Union contends that the grievance is not precluded by section 7121(c)(4). The Union argues that the grievance concerned whether the Agency violated DoD Directive 1400.13 when it refused to convert the grievants and did not concern a matter of appointment. The Union claims that all the grievants have already been appointed and the grievance did not concern the requirements of those appointments.

The Union also
contends that the Agency's reliance on FPM Supplement 296-33 is misplaced. The Union argues that the FPM definition is not a mandatory regulation that provides a basis on which the award can be found deficient. The Union also argues that grievances concerning appointments precluded by section 7121(c)(4) do not encompass grievances concerning

conversions, notwithstanding the FPM definition defining conversion as a change from one appointment to another. The Union asserts that the Authority has not found that grievances concerning appointments after a grievants initial appointment are precluded by section 7121(c)(4). Finally, the Union argues that IRS, Indianapolis does not support the Agency's contention that grievances over conversions are precluded by law.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the award is deficient.

In National Council of
Field Labor Locals of the American Federation of Government Employees, AFL

• CIO and United States
  Department of Labor, 4 FLRA 376 (1980) (DOL), the Authority specifically addressed the meaning of the term "appointment" as used in section 7121(c)(4) of the Statute. The Authority examined

the legislative history of the Statute and relevant laws and regulations. On the basis of its examination, the Authority determined that "general usage of the term 'appointment' refers to the action which takes place at the time an individual is initially hired into the Federal service." 4 FLRA at 381. In DOL, the Authority applied the term "appointment" in section

7121(c)(4) consistent with this common usage in finding that a grievance over the separation of a probationer was not precluded by the Statute. The Authority adhered to this application of section 7121(c)(4) in United States Information Agency and American Federation of Government Employees, Local 1812, 32 FLRA 739, 748 (1988), in concluding that a grievance concerning the temporary assignment of an employee was not precluded by the Statute. We will continue to adhere to this usage of the term

"appointment" in applying section 7121(c)(4) of the Statute. Accordingly, because the grievance in this case did not concern the initial appointments of the grievants, we conclude that no basis is provided for finding that the grievance in this case is precluded by section 7121(c)(4) of the Statute.

Because this exception concerns the Arbitrator's

determination that the grievance was not precluded by section 7121(c)(4) of the Statute, we agree with the Union that the Agency's reliance on the FPM definition of conversion in FPM Supplement 296-33 is misplaced. FPM Supplement 296-33 in no manner specifies that grievances over conversions from temporary appointments to permanent appointments concern appointments within the meaning of section 7121(c)(4) of the Statute. In our view, the Agency is merely disagreeing with the Arbitrator's

reasoning and conclusions in determining that the grievance in this case was not precluded by the Statute. Such disagreement provides no basis for finding the award deficient. See, for example, U.S. Department of the Interior, Bureau of Reclamation, Grand Coulee Project Office and Columbia Basin Trades Council, 42 FLRA 166, 170 (1991).

We also agree with
the Union that the Agency's reliance on IRS, Indianapolis is misplaced. The Authority in IRS, Indianapolis did not find that the award was precluded by section 7121(c)(4) of the Statute. Instead, the Authority found that the award was deficient because the award precluded the agency's

authorized employment of a seasonal employee. 29 FLRA at 234. In this case, the Agency makes no such argument in its exception, and, consequently, we conclude that IRS, Indianapolis provides no basis for finding the award deficient.

Accordingly, we will deny the Agency's exception.

V. Second Exception

A. Positions of the Parties

1. The
   Agency

The Agency contends that the award is contrary to section

7106(b)(1) of the Statute. The Agency maintains that the conversion of teachers from temporary to permanent appointments pertains to the numbers and types of positions within the Agency and that it has not elected to bargain over the matter. The Agency argues that by ordering the retroactive conversion of approximately 200 teachers from temporary appointments to

permanent appointments, the award interferes with its retained right under section 7106(b)(1) to determine the number and types of positions within the Agency and that, consequently, the award is deficient.

2. The
   Union

The Union contends that the Agency is confusing arbitration

with negotiability principles. The Union states that it did not submit bargaining proposals concerning the conversion of teachers from temporary to permanent positions and that it did not bargain with management over conversions. The Union notes that the obligation to convert employees was directly prescribed by the Agency's own regulation. Thus, the Union asserts that the Agency's argument that its right to determine numbers and types of employees or positions is somehow interfered with by

enforcement of its own regulation is without merit.

Alternatively, the
Union contends that the conversion ordered by the Arbitrator does not interfere with management's right to determine the numbers and types of employees. In particular, the Union disputes that the award would require the Agency to increase by approximately 200 its number of permanent

positions. The Union argues that for school year 1990-91, the Agency had over 600 permanent positions that were filled by new teachers. Thus, the Union claims that the award does not interfere with management's right because a sufficient number of permanent positions were available for conversion of the grievants.

B. Analysis and Conclusions

We conclude that the Agency fails to establish that the award is deficient on the ground that it is contrary to the Statute.

This case
involves a grievance over the claimed violation of provisions of DoD Directive 1400.13, pertaining to the conversion of temporary teachers. The Arbitrator found a violation of the directive and enforced the terms of the directive in ordering the grievants to be converted retroactively. The Agency contends that the provisions pertaining to conversion concern matters covered by section 7106(b)(1) of the Statute. We agree.

In
Overseas Education Association and U.S. Department of Defense, Office of Dependents Schools, 45 FLRA No. 118 (1992) (Proposals 6 and 7), we held that determinations as to whether an employee holding a temporary appointment should be converted to a permanent appointment are matters directly related to the numbers and types of employees or positions under section 7106(b)(1) of the Statute. However, because this is not a negotiability case, but an arbitration case in which the Arbitrator has enforced the terms of an agency regulation affecting conditions of employment, we also agree with the Union that negotiability cases involving the right to elect not to bargain are not dispositive of the

outcome of this case.

The U.S. Supreme Court has made clear that some external limitations on management rights under section 7106 are

enforceable in arbitration. In IRS v. FLRA, 494 U.S. 922, 924 (1990) (IRS), the Court recognized that, unlike the framework for grievances and arbitration in the private sector, in the Federal sector a collective bargaining agreement must provide for procedures for the settlement of grievances, which are defined to include any complaint concerning any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment. In IRS, the Court

examined this scheme and concluded that with respect to management rights under section 7106(a)(2) of the Statute, the negotiated grievance procedure is available to unions and employees to enforce certain external limitations contained in "applicable laws." 494 U.S. at 931 (quoting section 7106(a)(2)).

The prefatory language to section 7106(b)(1) is different from the prefatory language to section 7106(a)(2). Where the prefatory language to section 7106(a)(2) states that, subject to

subsection (b) of that section, nothing in the Statute shall affect the authority of management, in accordance with applicable laws, to exercise the enumerated rights, the prefatory language to section 7106(b)(1) merely states that nothing in section 7106 shall preclude the agency and the union, at the election of the agency, from negotiating over the enumerated matters. In U.S. Department of Justice, Immigration and Naturalization Service, United States Border Patrol, San Diego Sector, San Diego,

California, 38 FLRA 701 (1990) enforcement denied as to other matters, Case No. 91-70162 (9th Cir. June 22, 1992), we recognized that the prefatory language to section 7106(a)(2) on which the Court focused in IRS does not, by its own terms, apply to section 7106(b)(1). Accordingly, we held that the Court's analysis, which was based on the language of section 7106(a)(2), was not applicable to matters involving section 7106(b)(1).

Because section 7106(b)(1) does not have the constraining prefatory language of section 7106(a)(2), we find that the external limitations on management's rights under section 7106(b)(1) that are enforceable in arbitration are more extensive than those relating to management's rights under section 7106(a)(2). In particular, in view of the status of agency regulations in arbitration, we conclude that an agency regulation pertaining to a matter enumerated in section 7106(b)(1) may

constitute an external limitation on management's rights that is

enforceable in arbitration.

In U.S. Department of the Army, Fort Campbell District, Third Region, Fort Campbell, Kentucky and American Federation of Government Employees, Local 2022, 37 FLRA 186 (1990) (Ft.

Campbell), we discussed in detail the status of agency regulations in the context of arbitration. We recognized that each Federal agency prescribes rules, regulations, and official declarations of policy to govern and control the resolution of matters to which they apply within the agency. We noted the decision in Local 2855, AFGE v. U.S., 602 F.2d 574, 581 (3d Cir. 1979), in which the court recognized that, under 5 U.S.C. 301,

Congress has invested the heads of every executive and military department with general authority to prescribe regulations for the governing of their departments and the conduct of their employees, and that, under 5 U.S.C. 302, the heads of departments are permitted to delegate to subordinate officials the authority to take final action on matters pertaining to the employment, direction, and general administration of personnel of their

agencies. 37 FLRA at 194. We also noted that the dominance of agency rules and regulations was acknowledged by the U.S. Supreme Court in Fort Stewart Schools v. FLRA, 495 U.S. 641 (1990), when the Court stated that "(i)t is a familiar rule of administrative law that an agency must abide by its own regulations." 495 U.S. at 654 (citing Vitarelli v. Seaton, 359 U.S. 535 (1959) (Vitarelli) and Service v. Dulles, 354 U.S. 363 (1957)).

Consequently, we concluded in Ft. Campbell that an applicable agency regulation governs the disposition of the matter resolved by an arbitration award when there is no applicable collective bargaining provision.

Applying the analysis of Ft. Campbell to the issue in this case, we hold that when an agency regulation pertaining to a matter covered by section7106(b)(1) of the Statute governs the disposition of a grievance, it is consistent with management's rights under section 7106(b)(1) to enforce that regulation in arbitration. In holding that such a regulation is enforceable as an external limitation on management's rights, we emphasize that the focus of section 7106(b)(1) is to permit bargaining while, at

the same time, preserving management's right to elect not to bargain over the enumerated matters. In enforcing agencies' own regulations, arbitrators will not be forcing agencies to assume contractual obligations in the face of an election not to bargain, and agencies will not be committed to the regulatory provision for the term of a collective bargaining agreement.

Instead, arbitrators will be enforcing only existing obligations as currently set forth in the agencies' own regulations. Because these obligations will remain regulatory and not contractual, the agencies retain the right to revise or rescind the regulatory obligation at any time. Compare National Treasury Employees Union Chapter 213 and 228 and United States Department of Energy, Washington, D.C., 32 FLRA 578, 586-87 (1988) (the Authority rejected the union's claim that a proposal was

negotiable because it was consistent with the provision of an agency regulation; the Authority noted that the regulation conflicted with management's rights and that incorporation of those restrictions into the collective bargaining agreement would require management to comply with them for the term of the agreement regardless of whether the agency revised or rescinded the regulation).

In our view, this approach
harmonizes IRS, Ft. Campbell, and
the Statute. A grievance over the claimed violation, misinterpretation, or misapplication of an agency regulation

affecting conditions of employment may be submitted for resolution by an arbitrator, as contemplated by Congress in defining "grievance" in section 7103(a)(9) and in providing for binding arbitration in section 7121, while an agency's right under section 7106(b)(1) to elect not to bargain over the matters enumerated in that section is preserved and remains unaffected.

Because these provisions are unique to the Federal sector, such an issue would never arise in the private sector.

Applying this approach in
this case, we conclude that no
basis is provided for finding the
award contrary to section
7106(b)(1) of the Statute. We find that DoD Directive 1400.13 governs the conversion of teachers from temporary appointments to permanent appointments and that, consequently, the regulation was enforceable by the Arbitrator consistent with section 7106(b)(1) of the Statute. As we advised in U.S. Department of Defense, Army and Air Force Exchange Service and American Federation of

Government Employees, 45 FLRA 674 (1992), an agency "must be rigorously held to the standards by which it professes its actions to be judged." 45 FLRA at 690 (quoting Vitarelli, 359 U.S. at 546 (Frankfurter, J., concurring in part and dissenting in part)). Accordingly, we will deny the Agency's exception.

VI. Third Exception

A. Positions of the
Parties

1. The Agency

The Agency contends that the award is based on a nonfact. The Agency notes that the Arbitrator's conclusion that the grievants were appointed to continuing positions was based on

his determination that there was a need for the grievants' services for the full school year, as evidenced by the Agency's use of the end of the school year as the NTE date on the SF 50. The Agency asserts that such a finding is inconsistent with the clear meaning of the term "not to exceed." The Agency claims that the Arbitrator's determination that the term "not to exceed" is synonymous with "must last until" is clearly erroneous. The

Agency maintains that because the award is based on this erroneous conclusion, the award is deficient.

2. The Union

The Union
contends that the Agency's exception constitutes nothing more than disagreement with the Arbitrator's factual findings and his reasoning and conclusions and that, consequently, the exception provides no basis for finding the award deficient. The Union asserts that the award is supported by the facts presented to the Arbitrator and that the basis for the

Arbitrator's determination was more extensive than simply the NTE date on the SF 50.

B. Analysis and Conclusions

We conclude that the
Agency fails to establish that the award is deficient.

We will
find an arbitration award deficient because it is based on a nonfact when the central fact underlying the award is clearly erroneous, but for which a different result would have been reached by the arbitrator. For example, U.S. Department of the Air Force, San Antonio Air Logistics Center, Kelly Air Force Base, Texas and American Federation of Government Employees,

Local 1617, 45 FLRA 797, 800 (1992). The Arbitrator concluded that "(t)he objective evidence, however, demonstrates that the educators were appointed to continuing positions." Award at 8-9. Moreover, the Arbitrator relied on evidence in addition to the NTE date in concluding that the grievants had been appointed to a continuing position. He found that the fact that the positions did last the entire school year supported the Union's argument that the Agency needed the positions for the entire school year. In our view, the Agency fails to establish that the central fact

underlying the award is clearly erroneous. We find that the Agency is merely disagreeing with the Arbitrator's factual finding that the grievants were appointed to continuing positions and with the Arbitrator's evaluation of the evidence and testimony. Such disagreement provides no basis for finding an award deficient. See id. Accordingly, we will deny the

Agency's exception.

VII. Decision

The Agency's exceptions are
denied.