General Services Administration, Northeast and Caribbean Region, New York, New York (Agency) and American Federation of Government Employees, Council 236 (Union) (Authority decision, November 30, 2004)

Final FLRA decision. The Authority sets aside an arbitrator's conditional ruling that a defamation grievance could proceed. 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

A GSA manager circulated a memorandum about union negotiations that an employee later made available to the agency's staff. The union filed a grievance alleging libel and slander. An arbitrator ordered a hearing to determine whether the manager acted within the scope of his employment, because her ruling made the grievance arbitrable only if he acted outside that scope. A federal district court later held that he acted within the scope of his employment when preparing the memorandum. The Authority concluded that the court's final ruling made the arbitrator's factfinding order moot and set it aside. Chairman Cabaniss agreed with the result but questioned whether the defamation grievance had ever been within the arbitrator's or the Authority's jurisdiction.

Decision snapshot

• Authority: 5 U.S.C. §§ 7103(a)(9) and 7122(a); 28 U.S.C. § 2680(h).
• Outcome: Arbitrator's conditional arbitrability award set aside as moot.
• Key point: The final court ruling resolved the employment-scope question on which the arbitrator had made arbitrability depend.

Full text (FLRA public release)

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60 FLRA No. 89

GENERAL SERVICES ADMINISTRATION

NORTHEAST AND CARIBBEAN REGION

NEW YORK, NEW YORK

(Agency)

and

AMERICAN FEDERATION

OF GOVERNMENT EMPLOYEES

COUNCIL 236

(Union)

0-AR-3779

_____

DECISION

November 30, 2004

_____

Before the Authority: Dale Cabaniss, Chairman, and

Carol Waller Pope and Tony Armendariz, Members [n1]

I. Statement of the Case

This matter is before the Authority on exceptions to an award of Arbitrator Joan Ilivicky 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.

For the reasons that follow, we find that the Arbitrator's award is moot, and we set it aside.

II. Background and Arbitrator's Award

During negotiations with the Union over incentive awards, the Agency's New York assistant regional administrator prepared and distributed a memorandum to public building service division directors and service center directors advising them of the status of the negotiations and commenting on the conduct of the Union during the negotiations. A notation on the memorandum noted that it contained sensitive labor relations information and that it was for managers, supervisors and leaders only. Notwithstanding the notation, an agency employee posted a copy of the memorandum on the Agency's e-mail for viewing by all agency employees.

The Union filed a grievance charging the assistant regional administrator with libel and slander. The Agency claimed that the grievance was not arbitrable. In accordance with the parties' collective bargaining agreement, the Agency asked for a separate hearing to decide the arbitrability issue before a hearing on the merits of the grievance. Consequently, the grievance was submitted to arbitration on the sole issue of whether the grievance was arbitrable.

Before the Arbitrator, the Agency contended that the grievance was not arbitrable under 28 U.S.C. § 2680(h). [n2] The Agency maintained that the assistant administrator was acting within the scope of his employment when he wrote and distributed the memorandum and that consequently, this matter is subject to the exclusive jurisdiction of the federal courts.

The Arbitrator agreed with the Agency that this matter would not be arbitrable because of the exclusive jurisdiction of the federal courts if the assistant administrator were acting within the scope of his employment. See Award at 16, 18. However, on the facts presented, she ruled that whether the assistant administrator had acted within the scope of his employment was an unresolved issue of fact that required an arbitration hearing. She found that the Agency's arguments and evidence were insufficient to resolve that question. She concluded that libelous and slanderous statements made by federal employees that are not within the scope of their employment are arbitrable, but that such statements made within the scope of employment are not. Accordingly, she ruled that the grievance was arbitrable to this extent and ordered a hearing on the issue of whether the assistant administrator was acting within the scope of his employment. She found that this result was also supported by the parties' agreement because the assistant administrator's statements may have constituted a violation of the right of unit employees to be treated fairly and without fear of reprisal. [ v60 p453 ]

III. Positions of the Parties

A. Agency's Exceptions

The Agency contends that the award is contrary to law and fails to draw its essence from the parties' agreement.

Initially, the Agency states that its exceptions are interlocutory and acknowledges that ordinarily the Authority will not consider interlocutory appeals. However, the Agency asserts that its exceptions should be resolved by the Authority because they raise a plausible jurisdictional defect, the resolution of which would advance the ultimate disposition of this case.

On the merits, the Agency asserts that there is overwhelming support for its position that a claim of libel is not arbitrable. The Agency also argues that the parties' agreement does not support the award.

B. Union's Opposition

The Union contends that the Agency's exceptions provide no basis for finding the award deficient.

IV. Supplemental Order

In a supplemental filing, the Agency asserted that this matter is moot. The Agency stated that after it filed exceptions to the award, the Union president filed a lawsuit in state court against the assistant administrator claiming that the assistant administrator libeled him in the memorandum. The Agency further stated that the United States removed the case to the United States District Court for the Southern District of New York and filed a motion to substitute the United States as the defendant for the assistant administrator and that the matter is pending before that court. The motion to substitute the United States as defendant was based on the certification by the United States Attorney for the Southern District of New York pursuant to authority of the United States Attorney General that the assistant administrator was acting within the scope of his employment with respect to the memorandum.

The Authority directed the Union to reply to the Agency's supplemental submission. The Union filed a reply.

In its reply, the Union maintains that it has two causes of action. One is for monetary relief in court. The other is its grievance. The Union asserts that only the grievance procedure can provide the remedy of ordering the Agency to retract the memorandum that is still accessible on the internet. Thus, the Union suggests that the court action is not relevant to the grievance and the Arbitrator's award and that it has a legal interest in proceeding in both forums.

V. Decision of the United States District Court

On August 25, 2004, the U.S. district court granted the motion to substitute the United States as the defendant for the assistant administrator and granted the defendant United States' motion to dismiss. See Tomscha v. Greenberg, 2004 WL 1878749 (S.D.N.Y.). The court noted that a scope-of-employment certification is subject to de novo review, but that to trigger this review "a plaintiff must `allege with particularity facts relevant to the scope-of-employment issue.'" Id. (quoting McHugh v. Univ. of Vermont, 966 F.2d 67, 74 (2d Cir. 1991)). In granting the motion to substitute, the court held that no judicial review of the scope-of-employment certification was required because the plaintiff did not allege with particularity facts relevant to the certification. The court added that even if such review were necessary, the evidence demonstrated that the administrator was acting within the scope of his employment. Accordingly, the court ruled that the United States Attorney General correctly certified that the administrator was acting within the scope of his employment. Once the court granted the motion to substitute, the court granted the defendant United States' motion to dismiss for lack of subject matter jurisdiction because the express language of the Federal Tort Claims Act bars a suit for money damages against the United States based on a claim of libel. See id.

VI. Analysis and Conclusions

A. Threshold Issue

Although the exceptions are interlocutory, we find, for the reasons stated below, that the Agency has presented a plausible jurisdictional defect, the resolution of which will advance the ultimate disposition of this case. Accordingly, we will consider the exceptions. See United States Dep't of the Air Force, Air Force Materiel Command, Wright-Patterson Air Force Base, Ohio, 59 FLRA 64, 66-67 (2003).

B. Mootness

An arbitration matter becomes moot when the parties no longer have a legally cognizable interest in the dispute. See, e.g., United States Dep't of Justice, Fed. Bureau of Prisons, Metro. Det. Ctr., Guaynabo, Puerto Rico, 59 FLRA 787, 790 (2004). Under the express terms of the Arbitrator's award, the Union no longer has a legally cognizable interest in the arbitration dispute in view of the court's decision in Tomscha v. Greenberg that the assistant administrator was acting within the [ v60 p454 ] scope of his employment with respect to the memorandum. [n3]

The Arbitrator found, and the Union does not dispute, that this matter is not arbitrable if the assistant administrator was acting within the scope of his employment. [n4] The court's decision, which is final, has resolved this issue by finding that the assistant administrator was acting within the scope of his employment. Consequently, by the express terms of the Arbitrator's award, this dispute is not arbitrable. Accordingly, the Arbitrator's award directing factfinding on the scope-of-employment issue is moot, and we set it aside. [n5] See United States Dep't of the Air Force, San Antonio Air Logistics Ctr., Kelly Air Force Base, Tex., 58 FLRA 71, 72 (2002); United States Dep't of the Army Headquarters, III Corps and Fort Hood, Fort Hood, Tex., 56 FLRA 1121, 1122 n.2 (2001).

VII. Decision

The award is set aside.

File 1: Authority's Decision in 60
FLRA No.
89

File 2: Opinion of Chairman Cabaniss

Footnote # 1 for
60
FLRA No. 89

• Authority's Decision

Chairman Cabaniss' separate opinion is set forth at the end of this decision.

Footnote # 2 for
60
FLRA No. 89

• Authority's Decision

Section 2680(h) provides that the Federal Tort Claims Act and the Federal Employees Liability Reform and Tort Compensation Act do not apply to "[a]ny claim arising out of . . . libel [or] slander[.]" The Federal Employees Liability Reform and Tort Compensation Act amended 28 U.S.C. § 2679 and established absolute immunity for federal employees for torts committed in the scope of their employment by making a Federal Tort Claims Act lawsuit against the Federal Government the exclusive remedy for such torts. See 28 U.S.C. § 2679; United States v. Smith, 499 U.S. 160, 163 (1991); NFFE Local 1655, 39 FLRA 1087, 1100-01 (1991).

Footnote # 3 for
60
FLRA No. 89

• Authority's Decision

We take administrative notice that no appeal was taken of the court's decision and, as a result, it is final. See Fed. R. App. P. 4(a)(1)(B) (when the United States is a party, notice of appeal must be filed within 60 days after the judgment is entered).

Footnote # 4 for
60
FLRA No. 89

• Authority's Decision

The Arbitrator conceivably could have found that the grievance was arbitrable on broader terms, but did not. Similarly, the Union could have filed exceptions claiming that the grievance was arbitrable on broader terms, but did not. Accordingly, we resolve the Union's legally cognizable interest in this dispute on the basis of the Arbitrator's finding that the grievance was arbitrable to only a limited extent.

Footnote # 5 for
60
FLRA No. 89

• Authority's Decision

Member Pope notes that the premise of the separate opinion -- that the remedies sought in the grievance are based on alleged violations of state defamation law -- is incorrect. The grievance does not claim any violation of state law; the grievance asserts, as relevant here, that the manager's conduct violated the "GSA Standards of Conduct" and the "GSA Penalty Guide Paragraph 23." Att. to Union Opp. at 1.

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Separate Opinion of Chairman Cabaniss:

I write separately, not to express disagreement with the dismissal of this case, but with the analysis underlying the belief that this case is even properly before the Authority for resolution.

Consistent with the court's holding in United States Dep't of the Treasury, United States Customs Serv. v. FLRA, 43 F.3d 682 (D.C. Cir. 1994), I question whether a defamation claim amounts to a grievance under our Statute (§ 7103(a)(9)) because the law of defamation does not appear "to have been issued for the very purpose of affecting the working conditions of employees-not one that merely incidentally does so." Id. at 689. The court also noted that "[t]he term `affecting working conditions,' [found in § 7103(a)(9)(C)(ii)] in turn, must have been thought to impose a real limitation on an arbitrator's authority." Id. If the grievance does not involve a law, rule, or regulation issued for the very purpose of affecting the working conditions of employees, then the grievance is "outside both the arbitrator's and the FLRA's jurisdiction." Id. And, regarding that jurisdictional question, "the Authority may question, sua sponte, whether it has subject matter jurisdiction to consider the merits of a dispute." United States Small Bus. Admin., Washington, D.C., 51 FLRA 413, 423 n.9 (1995) (citing to United States Dep't of the Army, Army Reserve Pers. Ctr., 34 FLRA 319 (1990)).

I also have concerns about the pursuit of what appears to be a violation of state law through the negotiated grievance procedure/arbitration process. [*] I am not aware of the defamation claim here being based on anything other than state law, and the initial defamation lawsuit was filed in state court. The relation between Federal and state law is governed by the Supremacy Clause of the United States Constitution, Article VI, clause 2, which provides that the laws of the United States "shall be the supreme law of the Land; . . . any Thing in the Constitution of or Laws of any State to the Contrary notwithstanding." Additionally, "[a] corollary to [the Supremacy Clause] is that the activities of the Federal Government are free from regulation by any state." Mayo v. United States, 319 U.S. 441, 445 (1943). Further, it is "well settled" that the activities of Federal instrumentalities are "shielded by the Supremacy Clause from direct state regulation unless Congress provides `clear and unambiguous' authorization for such regulation." Goodyear Atomic Corporation v. Miller, 486 U.S. 174, 180 (1988); see also McFalls v. OPM, 72 MSPR 252, 261 (1996) (the Merit Systems Protection Board "is a Federal administrative tribunal established to adjudicate claims arising under applicable Federal statutes and regulations. . . . Therefore, it generally must follow Federal law, rather than state law.").

Finally, because the underlying defamation lawsuit was filed against the individual agency manager rather than his agency, the conclusion I draw from the mootness analysis is that the arbitration proceeding also was against that individual rather than the agency. As such, I question whether a defamation claim seeking redress against an individual employee addresses the "law, rule, or regulation affecting conditions of employment" requirement set out in § 7103(a)(9)(C)(ii) of our Statute. Consequently, I find no basis for this arbitration proceeding to have ever properly been before the Authority for adjudication, mootness or not.

File 1: Authority's Decision in 60 FLRA No. 89

File 2: Opinion of Chairman Cabaniss

Footnote * for
60
FLRA No. 89

• Opinion of Chairman Cabaniss

Regarding footnote 5, the majority's decision relies on the disposition of a state court defamation lawsuit (which was ultimately removed to the United States District Court for the substitution of the United States as the defendant) as the basis for the case now becoming moot. If the legal issue in the initial grievance and the subsequent lawsuit were not the same matter, there would then seem to be no basis for the majority's finding that the Union no longer has a legally cognizable interest in the arbitration dispute.