National Air Traffic Controllers Association and U.S. Department of Transportation, Federal Aviation Administration, Washington, D.C. (Authority decision, October 21, 1999)

Final FLRA decision. This is a final order of the Federal Labor Relations Authority involving an arbitral award under 5 U.S.C. § 7122. Judicial review under 5 U.S.C. § 7123(a) generally does not extend to such an order unless the order involves an unfair labor practice under 5 U.S.C. § 7116. This decision resolves exceptions to an arbitration award and does not state that it involves an unfair labor practice.

Plain-English summary

NATCA challenged the pay of former PATCO controllers rehired after the presidential employment ban was rescinded. An arbitrator found that the contract did not require FAA to rehire them at their highest former grades and that paying them at GS-9 step ten met his interpretation of the pay clause. The Authority denied the union's exceptions because the cited guidance permitted, but did not require, appointment at a former grade and step. The arbitrator's contract interpretation was plausible even though the union's competing interpretation was plausible too. Different treatment of controllers returning from Defense Department jobs did not necessarily violate the agreement's fairness clause. Member Wasserman dissented and would have remanded because he viewed the arbitrator's classification reasoning as legally mistaken.

Decision snapshot

• Authority: 5 U.S.C. § 7122(a); pay-setting regulations and Articles 37 and 84 of the agreement.
• Outcome: Union exceptions denied; pay grievance denial upheld.
• Key point: Authority review defers to a plausible arbitral interpretation even when a competing interpretation is also plausible.

Full text (FLRA public release)

[ v55 p1025 ]

55 FLRA No. 167

NATIONAL AIR TRAFFIC CONTROLLERS

ASSOCIATION

(Union)

and

U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

(Agency)

0-AR-3104

_____

DECISION

_____

Before the Authority: Phyllis N. Segal, Chair; Donald S. Wasserman and Dale Cabaniss, Members. [n1]

I. Statement of the Case

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

The Arbitrator found that in setting pay for certain employees, the Agency did not violate the parties' collective bargaining agreement. For the following reasons, we conclude that the Union has failed to establish that the award is deficient under section 7122(a) of the Statute. Accordingly, we deny the Union's exceptions.

II. Background and Arbitrator's Award

The Union filed a grievance in response to the Agency's decision to pay at the GS-9, Step 10 level, certain air traffic controllers rehired as a result of President Clinton's directive rescinding the ban on their employment. When the grievance was not resolved, it was submitted to arbitration, where the parties jointly stipulated the following issues:

Did the Agency violate Article 37, Section 1, of the Parties' collective bargaining agreement in setting pay for controllers returning to the Agency as a result of the Memorandum issued by President Clinton on August 12, 1993? If so, what shall be the remedy?

Is the Union's grievance timely filed? If so, is the Union's grievance arbitrable?

Award at 2-3. [n2]

The Arbitrator concluded that the grievance was timely filed because the practices disputed by the Union were continuing. Additionally, the Arbitrator found the grievance substantively arbitrable because the parties' joint stipulation of the issue concerned whether the Agency had violated the parties' agreement, rather than whether the Agency had properly classified the positions of the returning controllers.

In response to the Union's assertion that the Agency had violated the parties' agreement "by failing to pay returning PATCO controllers the maximum rate of pay allowable by law," the Arbitrator stated that:

In order to prevail, the Union must show . . . that the Agency either took an action [that] it was barred from taking by the terms of the Agreement, or (more likely in this case) failed to take some required action.

Award at 14. The Arbitrator concluded that the Union "failed to make this showing." Id.

According to the Arbitrator, the Union argued that Article 37, Section 1, required the Agency to exercise "the flexibility authorized" by the Office of Personnel Management to hire the controllers at the grades they held when they were fired. Id. at 14-15. The Arbitrator rejected this argument. In doing so, he stated that interpreting the parties' agreement as requiring the Agency to hire controllers at particular grades would necessarily involve Agency decisions about the classification of positions and the assignment of work and, as such, would be unenforceable. Id. at 15.

Having determined that the parties' agreement did not require the Agency to hire controllers at a particular grade, the Arbitrator stated that the only remaining "pay-setting" issue involved the "'highest previous rate' rule established by OPM . . . and the Agency's proce- [ v55 p1026 ] dures for implementing this rule[.]" Id. at 15 (citing 5 C.F.R. §§ 531.202 and 531.203(c) and FAA Order 3550.14). [n3] The Arbitrator concluded that the Union had not demonstrated that the Agency failed to set pay at the highest rate possible because of "the fact that the Agency has chosen to pay returning controllers at the top step of GS-9[.]" Id. at 15-16.

The Arbitrator also found that the Agency did not violate Article 84, Section 3 of the parties' agreement, which requires the Agency to "apply its rules, regulations, and directives and orders in a fair and equitable manner." The Arbitrator stated that, although the Agency hired some air traffic controllers at a higher grade than others, this did not constitute unfair or inequitable treatment. In this respect, the Arbitrator stated that Article 84 "does not require identical treatment of bargaining unit members," and concluded that the Agency had a reasonable basis for distinguishing between air traffic controllers re-hired from the Department of Defense and air traffic controllers re-hired from other non-governmental employment. Id. at 16.

Based on the foregoing, the Arbitrator denied the grievance.

III. Positions of the Parties

A. Union's Exceptions

The Union asserts that the award:

is inherently contradictory and thereby does not draw its essence from the contract. Furthermore, the decision fails to conform to law, rule, or regulation.

Exceptions at 3.

The Union maintains that "after finding in the Union's favor on the issues of arbitrability, the Arbitrator then found the merits essentially non-arbitrable." Id. The Union asserts that because the Arbitrator found the grievance arbitrable, he should have resolved the merits of the dispute in the Union's favor by relying on the wording of the parties' agreement. In this respect, the Union contends that Article 37, Section 1 required the Agency to pay the rehired controllers the "maximum compensation allowable by law," and that, according to FPM Letter 335-16 and FAA Order 3550.14, the highest compensation allowable was that for the highest grade previously held. [n4] Id. at 4. The Union argues further that the Arbitrator also should have found that the Agency's practice of hiring controllers transferring from the Department of Defense at higher grades than those allowed for other re-hired controllers was inconsistent with Article 84's requirement of equitable treatment.

With respect to whether the award is contrary to law, the Union asserts that:

Whether the Authority views this matter in terms of the employer's failure to follow the labor agreement, OPM guidance and Agency regulations, or in the lack of uniformity with respect to its application of its pay setting practices, it is clear that the FAA did not provide for the maximum compensation allowable by law. In failing to reach this conclusion, [the arbitrator's] decision is contrary to law, and rule, and fails to draw its essence from the parties' collective bargaining agreement.

Id. at 9.

B. Agency's Opposition

The Agency asserts that the Union has not demonstrated that the Arbitrator contradicted himself by finding both that the award was arbitrable, and that the Agency did not violate the contract. In this respect, the Agency argues that the arbitrator's conclusion that the grievance is arbitrable did not guarantee that the Arbitrator would find for the Union on the merits. The Agency also argues that the Union has not cited "any specific law or regulation allegedly violated," and that, as a result, the Union has failed to support its argument that the award is contrary to law. Opposition at 5. [ v55 p1027 ]

IV. Analysis and Conclusions

A. The Award Is Not Contrary to Law

The Union has not demonstrated that the Arbitrator's award is contrary to law, rule, or regulation. Both the FPM letter and the Agency regulation, cited by the Union, permit the Agency to pay a rehired employee at his/her former grade and step. However, neither the letter nor the regulation require the Agency to pay a rehired employee at the highest grade and step. [n5] Accordingly, we find that the Union has not demonstrated that the award is contrary to law. [n6] See Professional Airways Systems Specialists, District No. 1, MEBA/NMU (AFL-CIO) and U.S. Department of Transportation, Federal Aviation Administration, Office of Aviation Systems Standards, Battle Creek Flight Inspection Field Office, Battle Creek, Michigan, 48 FLRA 764, 768-69 (1993).

B. The Award Is Not Contradictory

An award that is incomplete, ambiguous, or contradictory so as to make implementation impossible is deficient. See American Federation of Government Employees, Local 1843 and U.S. Department of Veterans Affairs, Medical Center, Northport, New York, 51 FLRA 444, 448 (1995). In order for an award to be found deficient on this ground, the appealing party must show that implementation of the award is impossible because the meaning and effect of the award is too unclear or uncertain. See, e.g., Veterans Administration Hospital, Newington, Connecticut and National Association of Government Employees, Local R1-109, 5 FLRA 64, 66 (1981) (emphasis added).

The Arbitrator's finding that the grievance was arbitrable is not contradicted by his conclusion that the Agency did not violate the contract. Even if such findings were inconsistent, the Union has failed to show that implementation of the award is impossible.

Accordingly, we deny this exception.

C. The Award Draws Its Essence from the Collective Bargaining Agreement

The Authority will find an arbitration award deficient as failing to draw its essence from the parties' agreement when the appealing party establishes that the award: (1) is so unfounded in reason and fact and so unconnected with the wording and purpose of the agreement as to "manifest an infidelity to the obligation of the arbitrator"; or (2) does not represent a plausible interpretation of the agreement; or (3) cannot in any rational way be derived from the agreement or evidences a manifest disregard of the agreement. See United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 575 (1990) (DOL).

The Arbitrator concluded that Article 37 does not require the Agency to rehire air traffic controllers at the highest grade they previously held. The Arbitrator interpreted the contract provision as governing the step --not the grade -- at which controllers were rehired, and he concluded that the Union presented no evidence that the Agency was authorized to rehire controllers at higher than step 10, the step (of a GS-9 position) at which all three controllers who testified at the hearing were rehired.

The Union asserts that the Arbitrator erred in interpreting the parties' agreement because the "maximum compensation allowable by law" referenced in Article 37 requires that the controllers be paid at higher grades, not just higher steps.

The Union's interpretation of Article 37, Section 1 is plausible. However, the Arbitrator's interpretation of the agreement is plausible also. The Union has not established that the Arbitrator's interpretation of the agreement provision is implausible, irrational, or unconnected to the wording of the agreement.

The Union also asserts the Arbitrator erred in finding that the Agency's hiring of some controllers at higher grades than others does not violate Article 84. The Union bases this assertion solely on its claim that the Agency did not treat all controllers identically. The Arbitrator's interpretation of Article 84 as not requiring such identity of treatment is plausible. As such, the Union has failed to establish that the Arbitrator's interpretation of Article 84 fails to draw its essence from the agreement.

The Authority's long-established standard in reviewing an arbitrator's interpretation of contract provisions is deferential because it was the arbitrator's interpretation for which the parties bargained. See Department of Health and Human Services, Social [ v55 p1028 ] Security Administration and American Federation of Government Employees, AFL-CIO, 32 FLRA 79, 88 (1988). See also United Paperworkers International v. Misco, Inc., 484 U.S. 29, 37-38 (1987) (Supreme Court advised that when parties have agreed to have their dispute settled by an arbitrator, it is the arbitrator's view of the meaning of the agreement they have agreed to accept). Based on application of this standard, we deny this exception. [n7]

V. Decision

The Union's exceptions are denied.

File 1: Authority's Decision in 55 FLRA No.
167

File 2: Opinion of Member Wasserman

Footnote # 1 for
55 FLRA No. 167

• Authority's Decision

Member Wasserman's dissenting opinion appears at the end of this decision.

Footnote # 2 for
55 FLRA No. 167

• Authority's Decision

Article 37, Section 1 provides that:

Employees shall be paid in accordance with applicable laws, so as to receive the maximum compensation allowable by law except as otherwise provided for in this agreement.

Award at 4.

Footnote # 3 for
55 FLRA No. 167

• Authority's Decision

5 C.F.R. § 531.202 defines "highest previous rate" as follows:

(1) The highest actual rate of basic pay previously received by an individual while employed in a position in a branch of the Federal Government . . . .

(2) The actual rate of basic pay for the highest grade and step previously held by an individual while employed in a position subject to the General Schedule.

The Union quotes FAA Order 3550.14 as follows:

As a general rule, a person who is reemployed after a break in service is paid a salary based as closely as possible on the currently authorized rate for the grade and step last held prior to separation.

Exceptions at 5.

Footnote # 4 for
55 FLRA No. 167

• Authority's Decision

The Union describes FPM Letter 335-16 as follows:

Agencies may "noncompetitively reinstate transfer, or promote an employee up to the highest grade previously held on a permanent basis . . . provided the employee was not demoted or separated . . . 'for cause' reasons."

Exceptions at 4 (emphasis and ellipses added by Union).

Footnote # 5 for
55 FLRA No. 167

• Authority's Decision

Although the FPM was abolished effective December 31, 1994, we consider its applicability here because the Recruitment Notice, under which the PATCO controllers were re-hired, was open from September 1 to October 15, 1993.

Footnote # 6 for
55 FLRA No. 167

• Authority's Decision

Contrary to our dissenting colleague, we find no basis in the Union's exceptions for concluding that the Union is claiming that the award is deficient as contrary to sections 7103(a)(14)(B) and 7121(c)(5) of the Statute. In fact, the Union makes no claims at all regarding these sections of the Statute.

Footnote # 7 for
55 FLRA No. 167

• Authority's Decision

In denying the exception, we do not necessarily endorse the Arbitrator's reasoning in arriving at his interpretation of the agreement. We also do not endorse his statements regarding whether the agreement would be enforceable if it meant something other than how he interpreted it. It is long and well established that the Authority does not review arbitral reasoning in interpreting contract provisions. See, e.g., U.S. Department of Justice, Immigration and Naturalization Service, Honolulu District Office, Honolulu, Hawaii and American Federation of Government Employees, Local 2886, National Immigration and Naturalization Council, 41 FLRA 207 (1991) (the Authority relied on the Supreme Court's reasoning in Steelworkers v. Enterprise Wheel, 363 U.S. 593, 598 (1960), holding that in order to encourage arbitrator's to continue to give their reasons for awards, an arbitrator's reasoning is not a basis for finding an award deficient); American Federation of Government Employees, Local 1923, AFL-CIO and Social Security Administration, Headquarters Bureaus and Offices, 4 FLRA 112, 114 (1980) (Authority stated it would not review an award based on disputed reasoning by the arbitrator). No basis to depart from this sound approach to reviewing arbitration awards is asserted in this case.

[ v55 p1028 ]

Dissenting opinion of Member Wasserman:

I think that the Arbitrator's award is deficient and that the case should be remanded. The majority opinion fails to acknowledge the interrelationship of the arguments presented by the Union, and thus fails to address an aspect of the claim that the award is contrary to law.

The Arbitrator stated that the Union's argument that the collective bargaining agreement requires the agency to hire employees at a certain grade "necessarily involves decisions made by the Agency about the classification of positions." Award at 14-15. In its exceptions, the Union contests that conclusion, and notes that its arguments regarding the Arbitrator's determination that the "merits [were] essentially non-arbitrable" and its arguments regarding essence were "intertwined." Exceptions at 3. The Union further states that the Arbitrator's determination that its grievance concerns "classification of positions and management's right to assign work, which are non-negotiable subjects and therefore....could not have been incorporated into any collective bargaining agreement" is incorrect and that he should have applied Article 37 to the merits. Id. at 3-4.

Article 37, Sect. 1 provides that

Employees shall be paid in accordance with applicable laws, so as to receive the maximum compensation allowable by law except as otherwise provided for in this agreement.

Award at 4.

This contract language incorporates "applicable laws" that would govern maximum compensation. The Union notes that the FPM letter and the FAA Order 3550.14 (applicable laws) provide the Agency with the flexibility to hire employees at their previous grade levels. The Arbitrator implicitly relied upon incorporation [ v55 p1029 ] of the federal labor statute when he referred to classification, 5 U.S.C. §7103(a)(14) and management rights, 5 U.S.C. §7106. [n1] See Award at 10 and 15.

In light of the interplay of the law with the disputed contract language, I construe the Union's exception, based on a reading of the record as a whole, as a claim that the Arbitrator was mistaken as a matter of law when he made two determinations: 1) that placement in a grade involves "classification," and 2) that the collective bargaining agreement could not be interpreted so as to "require[] the Agency to make maximum use of the flexibility authorized by OPM" to hire PATCO controllers at their previously held grades. Exceptions at 3 and Award at 14-15. See also American Federation of Government Employees, Local 1546 and U.S. Department of Defense, Defense Logistics Agency, Defense Distribution Region West, 52 FLRA 94, 99 (1996) (Authority construed union's exception as a claim that the award is contrary to law (i.e., the Rehabilitation Act), based on a reading of the record as a whole, specifically, testimony of a union witness that referred to the Act and the arbitrator's discussion of reasonable accommodations). While I will defer to an arbitrator's interpretation of contract language, deference is not warranted when the interpretation is contrary to law. Cf. U.S. Department of the Air Force, HQ Air Force Materiel Command and American Federation of Government Employees, Council 214, 49 FLRA 1111, 1118-21 (1994) (Authority held that an arbitrator may consider and make a negotiability determination that is collateral to resolution of a dispute between the parties concerning the meaning and application of a specific provision of the parties agreement, provided that the negotiability determination is consistent with the Statute and Authority precedent).

The Authority has stated that

where exceptions to an arbitration award are filed with the Authority, section 7122 authorizes the Authority to take such action as it considers necessary with respect to an arbitration award which it finds deficient because the award is contrary to any law, rule or regulation. To avoid such findings of deficiency by the Authority, an arbitrator must perforce consider any relevant law, rule or regulation when fashioning a grievance arbitration award in the Federal sector.

Louis A. Johnson Veterans Administration Medical Center, Clarksburg, West Virginia and American Federation of Government Employees, Local 2384, 15 FLRA 347, 350 (1984). When federal sector arbitrators deem it important to apply the law, they must do so correctly, in order for the award to withstand review upon the filing of exceptions.

The Authority has construed the term "classification" in sections 7103(a)(14)(B) and 7121(c)(5) to have the same meaning as in 5 C.F.R. § 511.101(c), which defines the term as "the analysis and identification of a position and placing it in a class under the position-classification plan established by OPM under chapter 51 of title 5 ..." American Federation of Government Employees, Local 2025 and U.S. Department of the Air Force, Ninth Reconnaissance Wing, Beale Air Force Base, California, 50 FLRA 39, 42 (1994) (quoting 5 C.F.R. § 511.101(c)); U.S. Department of the Army, Fort Polk, Louisiana and National Association of Government Employees, Local R5-168, 44 FLRA 1548, 1552 (1992); International Federation of Professional Technical Engineers, Local 49 and U.S. Department of the Army, Army Corps of Engineers, South Pacific Division, San Francisco, California, 52 FLRA 665, 667 (1996); March Air Force Base, Riverside, California and American Federation of Government Employees, AFL-CIO, Local 1953, 13 FLRA 255, 257 (1983).

In light of what "classification" means in the Statute, the Arbitrator erred as a matter of law when he found that Article 37, Section 1 would require an unenforceable classification determination. Accordingly, I would find the award contrary to law. I would remand the case to the Arbitrator to interpret and apply the contract language in a manner that is consistent with the definition of "classification" under the Statute.

File 1: Authority's Decision in 55 FLRA No. 167

File 2: Opinion of Member Wasserman

Footnote # 1 for
55 FLRA No. 167

• Opinion of Member Wasserman

According to the Arbitrator, the Agency argued "that the Union's grievance is really over the Agency's classification decision to establish the positions to which returning PATCO controllers would be appointed at GS-9." Id. at 10. In this regard, the Arbitrator noted that "[u]nder section 7103(a)(14) . . . matters . . . relating to the classification of any position' are excluded from the definition ofconditions of employment' [sic] and therefore could not be the subject of negotiations between the parties." Id.